Cheque Printing Standards According to the Canadian Payments Association (CPA)

July 28, 2010 by · Leave a Comment 

The Canadian Payments Association (CPA) is a not-for-profit association created in 1980 by an Act of Parliament.

There are changes to cheques. Do your cheques meet the new CPA standards? Here are the facts you need to know.

In 2005 the CPA announced new specifications for personal and business cheques. The CPA extended the transition period until September 2, 2008.If you ordered cheques after 2005 they already meet the new standard but here is how it affects you:

  • Financial Institutions will recognize that some “old format” business cheques still exist and they will accept them until further notice to avoid potential disruption.
  • Clients with the “old format” cheques can continue to use them until their supply is gone.

The easiest way for you to make sure your cheques meet the new standard is the date format. If the format is MMDDYYYY or DDMMYYYY or YYYYMMDD, your cheques meet the new standard.

These new standards are intended to ensure that cheques can leverage all new image technologies. The new specifications as outlined in CPA Standard 006, Part A, are necessary to ensure that high-quality cheque images can be captured, both for clearing purposes and for delivery to clients, and to enhance processing efficiency.

Here are 7 things to check for issued on the new standard cheques

  • As mentioned above check that the dates are MMDDYYY or DDMMYYY. If so, your cheques meet the new standard.
  • The serial number should be encoded in the MICR line.
  • The minimum length of cheque increases.
  • Security features do not interfere with image capture.
  • Standardized positions for key fields on the cheque (i.e. field amount).
  • New requirements for the reverse of the cheque.
  • No elements that could hinder image capture on the cheque (i.e. inverse printing, italics, slanted fonts, black carbon on the reverse of cheques, a bottom border, and complex or colorful backgrounds.

In addition to the things to look for, the main things that have changed on Cheques are:

  • An increase in the minimum length of cheques to 6 ¼”, or 15.88 cm, from 6”, to ensure there is enough space for the mandatory serial number in the MICR line.
  • A mandatory serial number in the MICR line encoded at the bottom of the cheque.
  • Specified positions for key fields on the cheque, including the date field and the amount in figures.
  • New printing requirements on the reverse of the cheque so that image capture can be verified.
  • Disallowance of elements that may hinder the capture of images or data from the cheque.
  • A provision to ensure that security features do not interfere with key data, or “areas of interest,” as defined in Standard 006, Part A, and either prior to imaging or post imaging. In particular, if a VOID pantograph or other hidden pantograph is used, the pantograph must not be visible on images captured from original cheques.
  • Some revisions to technical specifications (e.g. Print Contrast Signal) to ensure high-quality images can be captured. For example, some colourful or detailed backgrounds that have been used on cheques to date may interfere with image quality and may need to be changed.

If you would like more information about Cheque Standards visit the CPA standards for cheques webpage.

Secure Your Cheques: The Age-Old Business of Cheque Fraud

June 24, 2010 by · Leave a Comment 

When it comes to cheque fraud, one of the age-old problems is detecting the fakes from the legitimate cheques.

Cheque fraud has a long and colourful history in Canada, and it is one of the fastest growing segments of financial crime tied to organized crime. Commercial cheque fraud is estimated to cost North American banks $20 billion CAD each year. Two years ago, the RCMP broke a Montreal-based counterfeit cheque scheme worth $195 million.

Cheque scams often start with a lottery prize that comes in the form of a letter or email that comes from a bank or institution claiming to be associated with a legitimate business. In order to collect the lottery prize, the victim is asked to deposit a fake cheque and then wire the money back to cover an administration fee.

The scammer is hoping you will deposit the cheque and then withdraw the funds before the cheque is verified. The bad news is that you are liable for whatever you deposit into your account.

If you have withdrawn funds under the assumption that the cheque was good, you are on the hook up to six years later. Legally, you as the depositor are on the hook even if initially the bank cleared the cheque.

Although some financial institutions have cheque verification devices in their branches, in many cases, cheques have to travel between your branch, the bank, and its processing center before they are cleared. In the meantime, the bank which deposits the cheque credits you with funds until it bounces.

Cheque fraud takes three guides: counterfeit cheques that were never authorized or signed by the account holder, cheques with altered amounts, and cheques stolen from you.

Avoiding Cheque Fraud – Tips For Consumers and Businesses

  • To protect yourself from cheque theft and fraud, reduce the amount of paper in favour of electronic payments and pre-authorized payments.
  • Keep your cheques under lock and key.
  • Reduce the number of cheques you keep.
  • Only order one set at a time.
  • Don’t trash your cheques without shredding them first. Thieves pick through recycling and garbage bins.
  • Destroy unused cheques from accounts that are no longer active. Safeguard your cheques. And check your bank statements as soon as they appear. Use a cheque numbering system that is continuous when you re-order cheques to help you keep track of numbers.
  • If you receive a cheque, make sure that the payee name printed on the cheque is correct. Be on the lookout for unusual-looking signatures. Business cheques typically contain watermarks, holograms and have perforated edges.

Take these tips into account and you can protect yourself and your business from cheque fraud in Canada or anywhere else.