This would involve imaging valid checks that are being deposited. Our banking manager has significant concern that we would be liable for any fraudulent activity that may arise from unauthorized access to these checks, and feels it would be necessary to stamp them void before imaging them.
Are there any "best practices" out there for safely storing these types of documents electronically to avoid the possibility of fraudulent activity? If the checks are signed and have the MICR coding, it is thought they could be reprinted on generic check stock and passed through a bank. Any suggestions would be appreciated.
A: Your banking manager is correct to be concerned about security. Here are a few recommendations regarding imaging checks for storage:
- The MICR information should be eliminated from the image – this information is a fraudster’s ticket to steal
- Mark the check “void”
- Deface the signature area
- Make sure your electronic document storage system incorporates controls and limits access to the image files. Put control procedures in place around your imaging process and record access.
- Consider cyber liability insurance in a form that would protect you from employee or third party fraud if they broke through your security system to the area where this information is stored
You might want to contact the Association for Information and Image Management (AIIM) for ideas regarding electronic record storage solutions.