Print Solutions Magazine, February 2005 -- Case Study: Security Documents

For Michael Baucom, president of Proforma Print Source, Durham, N.C., it all started with a seminar by Frank Abagnale Jr., the fraud artist turned FBI consultant portrayed by Leonardo DiCaprio in the 2002 movie “Catch Me If You Can.” “Abagnale stressed how warning bands should require some action from the bank teller, not just list the security features on the check,” Baucom says. Abagnale’s point was that a request for action helps to shift liability away from your customer to the bank, Baucom remembers.

So when a customer hit by check fraud called Baucom in a panic recently, the Proforma franchisee took Abagnale’s advice and convinced the customer to include a warning band on new checks stating: “To verify authenticity, rub or breathe on oval—color will disappear and reappear.” The oval is a spot of pink thermochromic ink that stands out from the blue and green backgrounds of the new checks. Baucom presented the thermo spot to the customer as one of dozens of possible additional security features. “They considered foil stamping, bleed-through numbering, and Toner Grip™, but they kept coming back to the thermo spot as the best value that would address the issues they had just experienced,” Baucom says. (Toner Grip is a surface treatment that yields greater toner adhesion to thwart forgery attempts).

The customer, a commercial janitorial service, had suffered a rash of fake checks and incurred approximately $5,000 in losses. Starting with a security paper supplied by manufacturer Printegra, based in Peachtree City, Ga., Baucom supplied new checks in just five days. Printegra sent additional samples overnight that Baucom showed his customer.

The janitorial service company had been keeping its checks in secure storage, but had failed to implement the daily positive pay check-matching service it knew its bank offered. On Baucom’s advice, the customer adopted the service and decided to keep fewer checks on hand. (Firms using positive pay send electronic files to their banks, listing checks issued and their amounts. As checks are cleared through item-processing areas, banks match the checks and their amounts to the files.)

Proforma Print Source’s customer also chose a feature to make its checks more scan-resistant. The fraud artist had scanned the company name, bank information, account number, and signature from the old checks and used them to produce a batch of completely different but passable-looking fake checks. Optical Deterrent Technology (ODT) was deployed so that the word “Void” appears on the output when the legitimate checks are photocopied or scanned. The customer also chose a true watermark, visible and florescent fibers, and full chemical reactivity to increase the security of its checks.

How did Baucom convince the janitorial service to pay for additional document security? He didn’t have to. “It’s like buying an alarm system for your house after a break-in,” he says. “Your priorities shift from price to overall value.” The cost of the new security features was minimal compared to the losses the customer had suffered. “The president and the head of accounting spent three or four solid days in a frenzy talking to the bank, the police and me,” Baucom says. He says an old saying is true: An ounce of prevention is worth a pound of cure.

Because no security feature is foolproof, Baucom says distributors should tell clients that the aims of better security include minimizing document manipulation, shifting liability away from the company, and convincing criminals to move to an easier target. “Fraud artists won’t take the time to drill down through multiple security features when they can easily duplicate somebody else’s less secure check to a ‘T’,” Baucom says.

—Chris Wright