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Tips, tricks, and best practices to help hotel owners reduce the risk of fraud


Mail-related check fraud has been rising since August 2021, according to the Evidence-Based Cybersecurity Research Group at Georgia State University, which has been tracking the trend. It warns that criminals have a pretty easy time when it comes to getting their hands on your checks. In KPMG’s survey of senior risk executives, 67% say their companies have experienced external fraud in the past 12 months, and 38% expect the risk of fraud committed by external perpetrators to somewhat increase in the next year.

“Some of them simply go to your home mailbox and take the mail you left for the post office to pick up,” said David Maimon, an associate professor of criminal justice and criminology at Georgia State University and director of the Evidence-Based Cybersecurity Research Group.

“Others simply go to the blue boxes with the keys that they were able to steal from some of the mailmen out there, empty the boxes, and get the checks that some of us send. That’s how easy it is.”

The cybersecurity group found an average of 1,325 stolen checks up for sale every week during October 2021. This was more than double what it saw in September when the average was 634 a week and triple the 409 average in August 2021. More recent numbers indicate an even greater rate of incidents.

Similarly, M3, a provider of hospitality-sector reporting and accounting software, is hearing from increasing numbers of customers who are experiencing check fraud, ranging from checks being replicated or physically altered somewhere between when the check is issued, mailed, received, or redirected.

With the goal of minimizing the potential of hospitality companies becoming victims of check fraud, M3 recommends that hotel owners take the following three steps below to mitigate the risk of check fraud.

Implement positive pay with name verification

Positive Pay is a banking feature designed to help business owners protect themselves against fraudulent checks being written on their account. Once you give your bank details for each check you write, the bank verifies that your information matches the information on checks presented to the bank before it processes the payment. If any items don’t match up, your bank flags them and sends them to you for review. You can then decide if you want to accept or decline the payment.

Implement an ePay system, which incorporates ACH and virtual credit card (VCC) technology

Systems such as ePay provide added security against fraudulent activities; especially when checks are eliminated and is easy to set-up and easy to use. It also adds efficiencies to your reconciliation process. In addition, ePay improves overall employee accountability.

Complete your bank reconciliations DAILY

Merely checking for similar numbers on the general ledger and bank statements isn’t good enough and doesn’t offer the most protection against fraud. If you are only reconciling weekly or monthly, the horse may be out of the barn by the time irregularities or fraud is identified. Daily bank reconciliation allows you to nip bank errors in the bud as early as possible, leads to fewer issues and fewer errors, avoids working with outdated information, and helps track daily cash flow providing you the insight you need into the cash flow and spending habits of the property or corporate entity. If you are not reconciling daily, your books may not always equal reality.

Unfortunately, we live in a world where fraud is common and increasing at an alarming rate. Be sure you protect yourself and your company. If you currently are lacking the tools to keep your accounts safe, please contact a reputable security company ASAP.

M3 Chief Sales & Marketing Officer Scott Wilson has built a direct sales, sales management, and sales and marketing career that has spanned three decades focused specifically in the financial software and technology industries. He finds tremendous value in matching the needs of hoteliers to the solutions and resources provided by M3. This approach allows M3 to help its customers succeed by driving financial performance, visibility, and transparency. Scott leads M3’s sales and marketing teams in an effort to achieve short-term objectives and increase awareness of the M3 brand while working as a member of the executive team to help develop long-term strategies that will ensure M3’s continued growth and expansion as a global company. For more information on any of the steps outlined in this article, contact [email protected].


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