Some of the traditional paper-based security features will not be visible on cheque images; however, they may still serve to protect against counterfeiting or alteration of cheques. Any security features used on cheques must not interfere, either before or after imaging, with the MICR line or other areas of interest. In particular, if a VOID pantograph or other hidden pantograph is used, it must not be visible on images captured from the original cheques.

Online Cheque Images

An industry-wide security standard has been developed to ensure images are captured, transmitted and stored in a secure environment and that an audit trail is maintained. This standard establishes security requirements in nine areas, including physical security of the location where any images are captured or stored, restricting access to images to authorized personnel and encryption of images during transmission. These provisions are designed to ensure the image is not modified or duplicated.

For example, images must be encrypted when they are transmitted, and there are security requirements for the related systems, including secure routing protocols and formal access control mechanisms. Recognizing that phishing attempts targeting consumers are an ongoing concern, it will continue to be important for consumers to protect their online IDs and passwords.

Access to online images will be subject to the same level of protection as other online banking information is today. Online images will be more secure than cheques that are left in an unlocked mailbox, for example, because access will require a user ID and a password at a minimum, and they will be accessed only through the Scotiabank’s secure web sites.

Reducing Cheque Fraud

There are indications that the transition to cheque imaging actually represents a positive step in the fight against fraud. Cheque fraud artists generally exploit the time between depositing a cheque and the time that the financial institution receives a fraudulent cheque back through the clearing system.

In the image environment, this period will be shortened, as files will be transmitted electronically and the opportunity for cheque fraud is reduced.

Imaging also provides new approaches to preventing and detecting fraud such as:

• data can be encrypted on the cheque (hidden in a bar code or seal, for example) and then decrypted (decoded) and read from the image to confirm that the cheque has not been altered
  
  
• automated signature verification software can be employed
  
  
• automated Payee Match and Positive Pay to verify cheques

Security features on cheques may still be useful to make them more difficult to alter or counterfeit. If they are used to check for fraud at the point where the cheque is cashed, they will still be useful in the image environment.

We Can Help

If you'd like to verify whether specific security features can be accommodated on your cheques, you may have your cheques tested by taking ten samples into your Scotiabank branch.