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Validity of Check Images

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Question: 
Some consumers believe that the images of checks are not as good as the checks themselves. What are the rules on this for proof of payment or prosecution of forgery?
Answer: 

First, let's start with proof of payment situations. In today's environment, and for years, businesses and agencies as "up tight" about proof of payment as the IRS have accepted images or copies of checks, ranging from copies of microfilm and fiche records to images on bank statements as acceptable proof of payment. They normally don't care about the level of proof that a court might require. We see no reason for this environment to change after banks start dealing with the occasional substitute check (or image of same).

As for forgery claims, the introduction of substitute checks and image exchange will obviously change the landscape. Some claims will continue to be documented with images showing obvious forgeries. To the extent that original checks are not available, courts will have to accept as evidence substitute checks that may not provide the same degree of proof as the originals would have. For customers who have been receiving imaged statements for some time, this doesn't really change matters, since most banks providing these statements have destroyed the originals by the time a court would seek them for evidence.

There will, of course, be some instances where a forgery won't be successfully prosecuted because an original check cannot be presented. Many observers have suggested that fraud will be mitigated in some ways because checks can be processed more quickly and fraud schemes identified before the "trail" gets cold.

Finally, the advent of image exchange is also prompting some vigorous work in the realm of enhanced security devices on checks that can survive the imaging process and, potentially, flag fraudulent signatures and alterations.

First published on BankersOnline.com 07/04/05

First published on 07/04/2005

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