In simple terms, a Holder in Due Course (HIDC) is anyone who accepts a check for payment, such as a grocery store or a check cashing company. On the face of the check there cannot be any evidence of fraud, nor can the person accepting the check know about any fraud related to the check.

Under the Uniform Commercial Code (UCC), the recipient of the check is a Holder In Due Course and is entitled to be paid for the check. An HIDC can assign, sell, give, or transfer its rights to another party, who becomes the new HIDC with the same legal rights as the original Holder.

The statute of limitations for an Holder In Due Course to sue the check’s maker for its face value is 10 years from the issue date, or three years from the date the check was deposited and returned unpaid, whichever comes first. That's a long time.

Past court cases have established legal precedent that you should be aware of.

If someone accepts a fraudulent check that looks just like yours, even if it is not yours, they can claim Holder in Due Course status and you may be held responsible for the face value of the check, or more, even if you did not issue the check. You can read the court cases that have established this precedent by clicking here.

Court rulings show that the best method for preventing some Holder In Due Course claims is by using controlled, high security checks, like the Abagnale SuperBusinessCheck or SAFEChecks. These checks have never been replicated, and have never been used in a check fraud scam.

You may be liable for check fraud on your account if someone claims “Holder in Due Course” status. Past court cases indicate that even companies who followed common banking procedures were still held liable for payment on checks that had a stop payment placed on them, or were several years old.

However, legal precedence has also been established which indicates that companies who protected themselves with High Security checks like those provided by SAFEChecks were insulated from some types of Holder in Due Course claims. Read the details of the court cases here on our website.

Uncontrolled check stock refers to checks that are sold entirely blank and are readily available to anyone across the country, including forgers, counterfeiters, and other criminals involved in check fraud. All they need is your printed check, blank check stock that looks like yours, a computer, a scanner, and a graphics software program. They can recreate checks that look exactly like yours.

When check stock is uncontrolled, it does not matter how many security features it has. For example, a criminal won’t need to bother copying, chemical washing, or lifting printing off a check if he can easily get an original, new blank check. So, even advanced features like a copy void pantograph, chemical reactivity, or toner anchorage become irrelevant. If multiple companies have access to the same original check stock, entirely blank, a company is left with no legal defense if their bank pays a counterfeit check that looks exactly like their own checks.

Uncontrolled check stock is the most significant security flaw in the check printing industry. SAFEChecks uses controlled check stock on all check orders. SAFEChecks never sells check stock that is completely and totally blank. Every order is customized specifically for each organization, ensuring that no one else - including check fraud criminals - will be able to get your checks. This, along with our Secure Ordering Procedures, provides the maximum level of fraud protection for our customers that is completely unmatched in the check printing industry. In fact, the Abagnale SuperBusinessCheck and SAFEChecks have never been successfully replicated or used in a check fraud scam. Learn the details of our advanced check features by clicking on the link below this video.

While it is true that personal check usage has declined significantly, business check usage has only declined slightly. However, check fraud has increased significantly. In fact, the percentage of companies experiencing check fraud attempts has gone from 55% in 2005 to 85% in 2012. Check Fraud actually produces more losses each year than all other forms of payment fraud COMBINED, including CREDIT CARD fraud, WIRE fraud, and ACH fraud. You can download the statistics by clicking on the link below this video.

The best form of insurance against check fraud continues to be a high security check from SAFEChecks, and POSITIVE PAY from your bank. The Frank Abagnale SuperBusinessCheck and SAFEChecks have never been used in a check fraud scam.

Before you make your next purchase of business or personal checks, please be aware of the following problems that customers commonly experience when buying checks:

First, poor service from check vendors. When you call SAFEChecks, a real person answers the phone. We will walk you through a straight-forward, uncomplicated process for ordering high security checks. Turnaround on standard orders is very fast, usually within 7 business days, and in some instances you can get checks the next day. Buying high security checks is a simple process.

Second, the vendor does not use "controlled" check stock. Nearly all checks today are printed on “uncontrolled check stock.” This means that the checks are often sold entirely blank to multiple companies, and are readily available to forgers, counterfeiters, and other criminals involved in check fraud. SAFEChecks is the only company that sells only controlled check stock, offering our customers the highest level of protection in the industry.

Third, security features on the check are either incorrectly applied or are not identified for the recipient. Many check manufacturers claim to have security features on their checks, but because they do not understand how criminals commit check fraud, their features are often incorrectly designed and thus become useless in preventing the fraud for which they are intended. Because of SAFEChecks' background as bankers fighting check fraud, we understand how criminals work, and our features are correctly designed to actually thwart fraud.

Businesses and purchasing agents that try to save a few dollars by buying cheap checks always regret it after experiencing only one incident of check fraud.

Check fraud continues to be the most dominant form of payment fraud. Check fraud produces the greatest losses for businesses, more than all other forms of payment fraud combined including, CREDIT CARD fraud, WIRE fraud, and ACH fraud. It is also one of America’s least prosecuted financial crimes.

When purchasing checks, clients typically think, “how much do they cost per thousand?” However, a criminal does not take a block of 1000 checks and try to commit fraud on all of those checks simultaneously. Fraud occurs one check at a time! So it is more appropriate to think in terms of “how much per check.”

A high security check is only a few pennies more than a cheap check! Given that each check presents an individual opportunity to commit fraud, spending a few pennies more to protect the money in your bank account is a wise choice.

Remember, the legal environment has changed, placing more responsibility for preventing check fraud on customers instead of banks. PRUDENT companies view using high security checks as one of the most effective, easiest, and least expensive steps they can take to protect themselves from unnecessary losses.

If you think about it—you’re making an incredibly important purchase. Your checks give fraudsters direct access to all of the money in your bank account.