MICR and check fraud

[Judd]

I am discussing a MICR solution with a client and the vendor offers two solutions, a remanufactured cartridge, and a new HP cartridge dumped and refilled with MICR. The OEM version offers advanced check fraud features such as color changing toner.

My thought is if anyone wants to write a fake check, they are just going to get check stock (which you can get easily) and print a new check on any laser printer. It probably doesnt have to be MICR either as I believe the local bank is not processing the check.


So what are the advantages to advanced check fraud prevention in a MICR cartridge? We believe a normal reman MICR cartridge would be just fine, as long as the bank can read the numbers.

[blackcat4866]

Re: MICR and check fraud

Magnetic Ink Character Recognition Code (MICR Code) is a character-recognition technology used mainly by the banking industry to ease the processing and clearance of cheques and other documents. The MICR encoding, called the MICR line, is at the bottom of cheques and other vouchers and typically includes the document-type indicator, bank code, bank account number, cheque number, cheque amount, and a control indicator.

MICR reader

MICR characters are printed on a document in either of the MICR fonts. The ink used in the printing is a magnetic ink or toner, usually containing iron oxide. The MICR text is passed before a MICR reader. The ink in the plane of the paper is first magnetized. Then the characters are passed over a MICR read head, a device similar to the playback head of a tape recorder. As each character passes over the head it produces a unique waveform that can be easily identified by the system.
The use of MICR allows the characters to be read reliably even if they have been overprinted or obscured by other marks, such as cancellation stamps and signature^{[citation needed]}. The error rate for the magnetic scanning of a typical cheque is smaller than with optical character recognition systems^{[citation needed]}. For well printed MICR documents, the "can't read" rate is usually less than 1%^{[citation needed]} while the substitution rate (misread rate) is in the order of 1 per 100,000 characters^{[citation needed]}.

I don't see how OEM would produce a significantly different affect than Aftermarket. It's either magnetizable or it's not. =^..^=

[atwageman]

Re: MICR and check fraud

99.99% of people who print checks at home on check stock, do not use MICR toner. Businesses can go either way. As long as the bank can get a optical OCR read on the MICR line, things will be good with the bank.

Some scanners have the ability to read MICR both optically and magnetically-----tape type head in the scanner is used to read MICR magnetically. Software will do a "read" comparison between what was read optically and magnetically. If they don't match, then the check can be rejected to have the MICR line info manually entered.

Thanks to Check 21 / ARC laws only images are needed by the banks/fed to process checks. Gone are the days of banks having to send each other the actual checks.......hence is why your grandparents no longer actually get their cancelled checks back with their monthly statements.

Also the laws allow for checks to be processed just like credit or debit cards. No money in your bank account and your screwed with a bounced check or overdraft fees. I've seen folks mail a credit payment regular first class mail on Friday from NC going to CA and wake up Monday morning to find their bank account negative.

That's not all the details of modern day check processing and is probably more than you wanted to know.

Fraud is always gonna be around in some fashion btw.

[atwageman]

Re: MICR and check fraud

Your reply was faster than mine. Lol. But spot on.

Magnetic Ink Character Recognition Code (MICR Code) is a character-recognition technology used mainly by the banking industry to ease the processing and clearance of cheques and other documents. The MICR encoding, called the MICR line, is at the bottom of cheques and other vouchers and typically includes the document-type indicator, bank code, bank account number, cheque number, cheque amount, and a control indicator.

MICR reader

MICR characters are printed on a document in either of the MICR fonts. The ink used in the printing is a magnetic ink or toner, usually containing iron oxide. The MICR text is passed before a MICR reader. The ink in the plane of the paper is first magnetized. Then the characters are passed over a MICR read head, a device similar to the playback head of a tape recorder. As each character passes over the head it produces a unique waveform that can be easily identified by the system.
The use of MICR allows the characters to be read reliably even if they have been overprinted or obscured by other marks, such as cancellation stamps and signature^{[citation needed]}. The error rate for the magnetic scanning of a typical cheque is smaller than with optical character recognition systems^{[citation needed]}. For well printed MICR documents, the "can't read" rate is usually less than 1%^{[citation needed]} while the substitution rate (misread rate) is in the order of 1 per 100,000 characters^{[citation needed]}.

I don't see how OEM would produce a significantly different affect than Aftermarket. It's either magnetizable or it's not. =^..^=

[blackcat4866]

Re: MICR and check fraud

Thank you Wikipedia. =^..^=

[Judd]

Re: MICR and check fraud

Thanks for the replies. I should mention that I am already familiar with MICR, I have been doing this since 96.

I had the same thoughts, if the bank can read it, great.

My primary concern is if the advanced check fraud features are necessary?

[atwageman]

Re: MICR and check fraud

Thanks for the replies. I should mention that I am already familiar with MICR, I have been doing this since 96.

I had the same thoughts, if the bank can read it, great.

My primary concern is if the advanced check fraud features are necessary?

Yes it's still needed, even if most criminals have moved on from check fraud. Let your guard down and you make it attractive again.