Losses from check fraud exceed $16 billion a year and affect businesses of all sizes. Despite the staggering dollar volume involved these days, passing bad checks is not a new phenomenon. Yet modern technology has made it easier to be successful at it.

A personal computer with special fonts can easily produce high-quality checks. Add a scanner and a high-resolution laser printer or color copier, and a forger is in business.

In addition to new and improved equipment for producing bogus checks, counterfeiters have increased access to original check stock to complement their new technology.

But check fraud does not stop with simple counterfeiting. Original documents such as paid checks may be altered with chemicals that dissolve the original ink. One chemical takes the process one step farther, completely dissolving the check paper over a period of days destroying all evidence of the fraud in the process.

The probability of a business being a victim of check fraud is growing—and not just the liability associated with accepting a bad check from a customer.

Changes to the Uniform Commercial Code require businesses to take steps to prevent fraud. When they are in a position to prevent loss but don’t take action, businesses face increased liability.

Advances in check fraud technology can be mitigated by safe business practices and getting bank technology on your side. Here are some steps to help you minimize the risk your pocket is going to be picked from the inside:

Examine and reconcile your bank statement quickly after its arrival. If your statement has not arrived within one or two days of normal delivery, call your bank immediately.

Report losses promptly. As soon as you are aware of an unauthorized check report it to your bank.

Maintain tight security over your checks. Store company checks safely and securely. Restrict access to only those persons responsible for issuing checks.

To strengthen security, change combination locks annually and lock up signature equipment, invoices and critical account information as well.

Examine new checks when they arrive, and inventory your check supply quarterly. Keep check boxes sealed until needed, continually check for evidence of tampering. Keep your check reorder form under lock and key. Store canceled checks in a secure environment.

Separate financial responsibilities for checks—don’t have the same people who are responsible for custody and preparation of checks reconcile your monthly bank statements. Reconcilers should not be signers on accounts.

Take advantage of automated check matching and direct deposit. Automated check-matching service identifies any check that was not legitimately issued or has an altered dollar amount so a business can provide information on them to the banks. Fraudulent checks are identified when the bank compares in-clearing checks with this file. When an item is presented that does not match the valid issue file, it is flagged by the bank as a suspected fraudulent transaction, then is reviewed by the business, which decides whether to honor it.

Take advantage of electronic payments. Make payments electronically whenever possible, including direct deposit to pay employees. Electronic payments are more secure and reduce external access to your account numbers.

Use secure check stock. Although there are no fool-proof checks, highly secure checks resist alterations and complicate the criminal’s task.

By being aware and implementing security procedures, you can stop check fraud before it starts.

Author David Gasca is vice president and leader of U.S. Bank’s South Sound business banking teams.