• Fraud and counterfeiting are projected to grow at a 10% annual rate through 2001.
  

• 5% of world trade is lost each year through counterfeiting secure documents, videotapes, CD’s, software, luxury apparel goods, pharmaceuticals et al.
  

• In 1994 the ABA reported that financial institution fraud has been estimated at $12.6 billion and growing 12% annually.
  

What can value document printers do to thwart this increasing criminal activity?

Integrated Approach
With the appearance of low cost, high-definition laser color scanners, printers, and copiers, the attention previously paid to forgery has been refocused towards counterfeiting, which is the illicit reproduction of a document.

It is realistic to accept that given time, resources, and inclination, the integrity of any document can be compromised. A secure design advocates collective defensive elements as part of a coordinated, integrated approach to document protection, involving design, printing technique, security ink and security paper to properly discourage fraudulent activity. In this manner, the various components can be made to reinforce each other’s effects to provide enhanced security on any document.

Deterrents to Counterfeiting
When included at the design stage, security devices, whatever their function, offer mutually protective elements that tend to resist counterfeit or forgery more effectively than by simply adding a security feature to an already existing document. However, not all such designs are aesthetically pleasing.

The appearance of the word "VOID" on the copy of a document is a good example of a deterrent design device. Experience shows that some colors reproduce stronger than ideal above a certain density, but rather weaker below it. This observation has generated ideas for designs that tend to photocopy with an exaggerated contrast. The more distinguished cause "VOID" to emerge from its cleverly camouflaged background when the document is photocopied.

Because color copies and scans are composed from lines of colored dots arranged in directional patterns, some designs are intended to provoke an unwanted moiré pattern. On an attempted copy, the obtrusive moiré patterns will appear as patches of distorted colors.

By contrast, the concepts offered by paper and ink manufacturers involve the appearance or disappearance of a key feature rather than a copied image. Some are authenticity devices that are present on the genuine document, but the effect is absent from a photocopy. Paper-based examples are watermarks, security threads, luminescent fibers or planchettes. Ink-based examples are heat-sensitive thermochromic ink and optically variable ink, whose perceived color changes according to the viewing angle.

Ink manufacturers also offer visible and invisible luminescent materials, sometimes with a dual wavelength feature; penetrating watermark ink, UV activated photochromic inks, infrared pairs, metameric pairs and so on. Some ink, like watermark and optically variable inks, are overt in the sense that the eye alone readily identifies their presence or absence. Heat-sensitive thermochromic inks change from color to colorless or color to color, then revert to their original state, usually within seconds. These overt effects can not be photocopied. Others, like luminescent and infrared inks, need special authentication equipment to detect their presence so they may be described as covert.

In all cases, a knowledgeable inspection is necessary because both overt and covert features may themselves be counterfeited. The inappropriate choice of a readily available security device may lead to a very dangerous potential for deception by a fake document. Counterfeit examples like these without doubt encourage the use of more than one feature to provide the greater protection.

Deterrents to Forgery
Only a coordinated approach involving a combination of good design, fugitive inks and sensitized paper will offer adequate protection against forgery. Forgers have adapted a whole range of chemicals for the fraudulent removal and alteration of signatures, endorsements and variable information. Household bleaches, disinfectants, dry cleaning fluids, hair spray and a host of others…in the hands of skilled criminals have some potential to remove ballpoint pen ink, marker pen ink, ink jet inks, laser toner, stamp pad inks and so on. Obvious targets are all kinds of documents: checks, vital records, gift certificates, passports and the like.

Chemically sensitive papers usually respond to falsifying chemicals by the appearance of a color stain, and fugitive inks will bleed, stain and dissolve on the printed document. Fugitive inks also have the versatility to protect an entire document or only that portion that needs protection. Both sets of responses are designed to deter the forger, or betray an attempt. Superficially, the devices are similar, and in an economic or competitive environment where price is the prime consideration, a choice between paper and ink will inevitably be proposed. A proper marriage of security ink and security paper affords mutual protection, and allows a far surer defense than is possible separately.

Client/Printer/Supplier Partnerships Pay Off
Today’s successful security document printers have been providing their clients with an approach to document security that offer multiple levels of protection, including overt and covert measures. These printers understand their customers’ documents of value and their life cycle. They know how the documents should be designed, focusing on the vulnerable areas of attack. They work with the customer to understand the verification environment and propose the best authentication feature available for their surroundings. The successful printers have used their common sense approach of being proactive, not reactive in offering their clients the latest technology in document fraud protection.

Like all business situations, the decision to use security defenses to protect a customer’s document facing counterfeit or fraud is not a simple one. This decision depends upon a fine balance between economics and performance, the printers’ capability and the clients needs. It entails the involvement of various industry technologies from a vast array of suppliers that can include software companies, paper manufacturers, ink suppliers and others. The printer and customer should understand how each vendor’s involvement might influence the ultimate effectiveness of a document’s defense and consult each supplier candidly. The confidential nature of this undertaking requires working with such suppliers to ensure maximum effectiveness of the document’s security. Once a decision is made to integrate security defenses into the product mix, it is important for the printer to illustrate for the customer how the additional marginal costs of building an effective, secure document are offset through the improved, secure document.

Security Documents Tomorrow
With the rapid growth of document fraud, there is an increasing need for machine-readable documents to accelerate their authentication. Machine-readable inks and paper can facilitate these requirements and can incorporate safeguards better than the security devices that were outlined earlier. Good machine-readable document design will deter attempts at counterfeiting and forgery, and improve the probability that a compromised document will be detected.

Until a few years ago, because of high equipment costs, machine-readability was limited to documents like passports and checks. Now, low cost and hand-held machine-readable devices have made adding this feature to documents like gift certificates and driver’s licenses, to name a few, more affordable and accessible to the end-user.

The craftiness of today’s criminals and the increasing sophistication of technologies that are commonly available at low cost should provide sufficient motivation for protective measures. However, the compatibility of integrated defenses must be considered in relation to a number of variables, including risk, printing application, ease of detection method, durability and cost.

Tom Jay is vice president of sales and marketing for SICPA Securink Corp. He can be reached by email at: tomjay@sicpa.com

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Changes to the 2001 W-2

Attention Tax Forms Sellers: The IRS has Made significant changes to the 2001 W-2 Form

The 2001 W-2 has been resized and reformatted to enable more accurate scanning of data. In addition, boxes were deleted which were no longer needed. Users need to make certain that their paper W-2 forms reflect these changes:

• Increased form width to 8.5 inches.
  
• Reformatted employee's name in box "e."
  
• Enlarged boxes for money amounts, adding shading and dollar signs.
  
• Deleted former box 12, "Benefits included in box 1" to new Box 14 —Other, for reporting the lease value of a vehicle provided to your employee.
  
• Reformatted former box 13 (to new box 12) for four entries.
  
• Deleted "Deceased," "Legal rep.," and "Deferred compensation" checkboxes in new box 13 (formerly box 15).
  
• Relabeled "Pension plan" checkbox in new box 13 as "Retirement plan."
  
• Added a checkbox for "Third-party sick pay" in new box 13.
  
• Relocated "Locality name," "Local wages, tips, etc.," and "Local income tax" boxes (formerly boxes 19-21).
  

Users should have the new form on-hand now for terminated employees that want their 2001 W-2 forms before the year’s end.

The new form is shown here:

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