A Safe Haven Security features don't guarantee sanctuary from fraud, but distributors who offer secure documents and consulting can help clients find refuge from its onslaught. BY SUSAN KEEN FLYNN "The banks aren't out there on the evening news saying, 'Hey, we got ripped off today.' If it hasn't happened to a company, they may not be aware of the magnitude of fraud." Wayne Miller Sales Representative Progressive Business Solutions Inc. Hickory, N.C Many people are said to have book smarts, but lack street savvy. There's one New Jersey college student who's deficient in both. The student received his transcript, printed on white paper with black ink. Unhappy with a low grade, he used Wite-OutŪ correction fluid to alter the document. However, he forgot to change his cumulative grade point average at the end of the transcript to reflect the "new" grade, and the school discovered the forgery. The registrar's office approached Joe Timpanaro to help it reduce the college's risk of such fraud. Timpanaro, president of Jet Business Services, a distributorship in Manalapan, N.J., now provides the college 1-part 12 1/2 x 8 1/2-inch continuous transcripts with several security features. The transcripts are produced on chemical reactive paper. If someone tries to alter the document with acetone, the ink runs. The transcripts also include purple screens (the college's color) over areas where they are personalized with grades. If a student alters a grade with correction fluid, it will stand out. In addition, the transcripts feature a warning band and an embossed school seal on the right side. Timpanaro supplies the college between 30,000 and 50,000 transcripts a year. So far, the college has had no problems with its new transcripts. But Timpanaro advised the school not to become complacent. "We told [the college] in time they may need to add other security features," he says. "The criminal mind is always working to beat the system, so clients should change features." Staying a Step Ahead of the Criminal Mind Once the exclusive domain of criminal masterminds, forgery is becoming easier for the Average Joe to commit-disgruntled employees alter checks, scalpers duplicate tickets for sports venues, and shoppers change the value of gift certificates. "You don't have to have a printing press in your garage to commit fraud," says Fred Wittenmeier, owner of Service Forms and Graphics, a distributorship in Darien, Ill. "Laser printers and color copiers make it easy for anyone to do." Distributors can help customers prevent fraud by staying one step ahead of criminals. "To stop a criminal, you have to think like a criminal," says Wayne Miller, a sales representative with Progressive Business Solutions Inc. in Hickory, N.C. He keeps attuned to potential fraud situations. For instance, Miller, who coaches Little League baseball, received a gift certificate for a restaurant at the end of last year's season from his players. The certificate was printed on white bond with red and black ink and crash numbering. "It would have been so easy to duplicate," says Miller, who gets ideas for customers from such scenarios. Miller educates customers about criminal intent, often on seemingly obvious issues. For example, one client told Miller his checks are protected because they're stored in boxes in a safe place. However, Miller pointed out that if even one check is left lying around the office, the customer is at risk. Dick Gray, CFC, takes security issues very seriously-80 percent of his business derives from sales of MICR check printing systems. Gray, president of Xtension Technologies Inc., a distributorship in Laguna Hills, Calif., says it's essential to understand the criminal element and technologies that facilitate fraud. "I became a student of check forgers-how they operate, what they look for, what equipment they use," he says. Ten years ago, Gray worked in the Technology Transfer Division of NASA. While employed with NASA, he took an FBI training course on check forgery. "It helped me immensely," says Gray. "I learned the criminal mentality." But Gray doesn't rely solely on information he learned a decade ago in that course. He continually researches fraud. One way Gray keeps informed is by studying international fraud on the Internet. "If it works abroad, it can work here," he says. Providing More than Paper Gray's research has taught him one important thing: Protecting customers' documents means more than simply providing paper with a few security features. "You need to make security a team effort," he says. "The end user, the distributor, the manufacturer and the financial institution are working on a common goal-to reduce the chance of fraud." Gray sells MICR check printing systems to companies ranging from Fortune 50 firms to mom-and-pop shops. Clients use the systems to output data from their accounting software and print documents such as accounts payable checks, payroll checks and direct deposit notices. The systems personalize blank check stock with check information (including the MICR number), company logos and automatic signatures. MICR check printing systems entail four components, which Gray provides. First, he supplies customers with a dedicated MICR software program. He handles the systems integration and training for local customers and contracts with a company for those services for many out-of-town clients. Next, Gray installs dedicated MICR-enabled laser printers from TROY Systems Inc. Finally, he supplies MICR toner cartridges and check stock with multiple layers of security features, including a true watermark, toner coating, a void pantograph and backprinting. Gray cites several benefits of MICR check printing systems. They eliminate obsolescence because companies can change data, such as bank account numbers, on demand. Companies also print checks on demand, so they're not storing negotiable documents. This reduces the risk of fraud. "The check stock itself has limited value until after it's printed," says Gray. In addition, companies only need to purchase one check stock rather than numerous different checks for separate functions, such as payroll and accounts payable. Along with MICR check printing systems, Gray offers value-added services to boost security. He provides clients a draft of a letter to send to their banks on their company letterhead. The letter informs banks of what security features the checks include. Aside from assisting banks in identifying fraudulent checks, it also provides companies some legal protection should fraud occur. Xtension Technologies also ensures that negotiable documents aren't shipped in boxes that mark them as valuable. The distributorship's shipping labels and documents don't mention that the delivery contains checks. Instead, a box of payroll checks may have a label indicating that "personnel action forms" are enclosed. This practice of camouflaging boxes of checks recently helped one of Gray's customers. The company was burglarized, and robbers stole computers with MICR software, MICR-enabled printers and crystal gifts off the president's desk. However, the robbers left behind boxes of blank check stock next to the equipment. The boxes were marked with generic labels designating checks used by the company's three divisions: The labels read "blue stock," "green stock" and "burgundy stock." Gray also provides consulting. For instance, he advises clients on post-processing activities, such as mailing. Gray says a lot of fraud occurs when companies place trays of mail by a drop box or mailbox for pickup. Criminals steal envelopes and later steam open ones they think may contain checks. They duplicate and alter checks, place the original checks back in the envelopes, and return the envelopes to the drop box. According to Gray, by returning the envelopes to the drop box, criminals reduce the chance that Postal inspectors will discover thievery occurring at that location. Protecting All Valuables Adding security features to checks has become commonplace. "Today, we won't sell any checks without security features," says Miller. "Our job is to keep customers out of trouble...so distributors don't have the option to sell security features or not." But distributors need to broaden their sights when it comes to security. Any document of value should be protected, and a variety of technologies are available to meet clients' needs. Timpanaro is quoting an order for 10,000 pieces of letterhead with security features. The client sells screws and fasteners that must be tested by a lab to ensure the materials meet certain requirements. The company, which presents the results to a federal testing bureau, must document that the results are authentic. Timpanaro plans to provide letterhead with a cotton fiber, an artificial watermark and a void feature. "Everything that the company tests must be documented on this security letterhead," says Timpanaro. Another hot area in the security field is event tickets and passes. Wittenmeier supplies tickets for four festivals each year. The tickets include two main features: RUB and REVEAL and UV security inks. RUB and REVEAL ink from Nocopi Technologies Inc. changes color when someone rubs or scratches it with a fingernail. Festival staff who collect tickets at the gate ensure the tickets are genuine by scratching a word or logo printed with Nocopi's ink. "If there's a problem, they know immediately," says Wittenmeier. The back of the tickets are printed with UV fluorescent ink, which shows up under a black light. Festival staff rely on this feature when tickets are reconciled at the end of each day. They count all the tickets and check for phony ones. Gray also sells event passes. When he sold a MICR check printing system to a professional sports team, he was issued a visitor's pass to enter the stadium's offices and install the system. While there, he asked the head of security what would happen if he didn't return the pass at the end of the day. The head of security admitted to Gray that he could get in to every home game illegally. He added that the team budgeted $100,000 a year for losses in abused passes. "Basically, they end up with season ticket holders that don't pay a dime," says Gray. Gray offered a solution. He now supplies the team 10,000 time-released badge/label combinations for passes. When the passes are disseminated, they are activated by rubbing a fingernail across a certain spot. Twenty-four hours later, red stripes appear across the badge. If gatekeepers see a badge with those stripes, they know it's invalid. While festival and sports passes have a high value, even documents worth less often need protection. One of Gray's friends sells movie passes to a theater chain in southern California. The passes include true watermarks, holographic foil and bleedthrough and Arabic numbering. At first, Gray thought that seemed like a lot of features for movie passes. But then his friend told him the extent to which the theater was hit by fraud. "The theater chain lost $4,000 a month to forged movie passes," says Gray. "That's a lot of popcorn!" He says the theater hasn't received any fraudulent passes since adding the security features. "They don't care what the movie passes cost because they sure aren't costing them $4,000 a month," says Gray. Tipping the Scales Gray, who teaches a course on security documents at DMIA's School for Forms Specialists, advises distributors to learn as much as they can about fraud prevention. "Be a 'SME'-a subject matter expert," he says. "You add more value to yourself and your clients if you are an authority and can solve problems." Here is more advice to help you tip the security scales in favor of your customers: Get educated on equipment. Printers, scanners and copiers are the tools of criminals. If you understand how they work-and their limitations-you can help clients fight fraud. For instance, when Gray includes pantographs in customers' documents, he makes sure they're printed at 1,200 d.p.i. He says most copiers image documents at 600 d.p.i., so pantographs with more dots per inch appear grainy when copied. To learn about equipment capabilities, Gray suggests distributors take samples of security documents to retail installers of copiers and scanners. Run them on various types and brands of equipment to see which security features perform best. Offer alternative constructions. Consider all the options before you settle on a format for a security document. Most security features can be printed on a variety of products. One of Miller's clients is a hosiery that previously used cut sheet payroll checks. The checks were inserted into envelopes, and company supervisors handed them out. Miller offered a more secure option. He now supplies 3-part insert mailers. Part 1, the front of the mailer, includes a blockout with spot carbon behind it. Part 2 (the insert) is the check, and Part 3 is the back of the mailer. When the mailer is personalized, only the employee's name appears on the front, while the spot carbon transfers the check information onto the insert. The check is printed on Boise Cascade's CheckProtect paper and includes a microprinted signature line and a warning border. Plant the seed with samples. Progressive Business Solutions exhibits at trade shows for government purchasing agents. Miller displays side-by-side samples of a typical check printed in black ink used by a government agency, and one with multiple layers of security that he provides agencies. "We plant the seed about security, asking people if they're aware of the potential for fraud," says Miller. "Most people know about the technologies that make fraud possible-they have laser printers in their homes. But most people don't put one and one together." Attempt forgery. Test the security documents you supply a customer to make sure they thwart fraud. Joe Wysor, an account manager with Dominion Paper Products, a distributorship in Alexandria, Va., serves a large law firm in Washington. The firm used MICR printing software and equipment to print checks in-house on 24# plain 8 1/2 x 11-inch paper. After some of its checks were copied and cashed, the facilities manager asked Wysor to supply check stock with security features. Wysor suggested the law firm use chemical reactive paper and add colored warning bands and a void pantograph. He and the facilities manager tested sample stock on printers and copiers on all 10 floors of the law firm. Meet the men in blue. Gray has worked with check fraud personnel from numerous police departments. Not only can police provide insight into forgery, but they also can refer you to companies that have been hit by fraud. Target the top. Gray spreads the message about security to company CEOs. "They are charged with the financial viability and image of the company," he says. "They're really interested in talking to someone about ways to reduce risk and loss." Susan Keen Flynn is managing editor of FORM Magazine. Thanks to Miami Systems Corp./Shelby Division, Shelby, Ohio, for assistance. Security Inks Ink suppliers offer a variety of anti-alteration and anti-duplication inks to help protect documents. This chart includes basic information about 11 types of security ink. The effects caused by all of the inks are impossible to photocopy or reproduce digitally. Ink Bleeding Description This ink, which prints black, generates a red stain when exposed to water or other aqueous solutions. Features Doesn't require special devices to authenticate. Users can rub a wet finger on the printed area to produce effect instantly. Available for dry offset presses. Ink Coin Reactive Description Opaque white or transparent ink that turns black when rubbed with the edge of a coin. Features Doesn't require special devices to authenticate. Ink works well on many paper stocks. Available for wet or dry offset and flexographic presses. Ink Erasol Description Erasable ink often used to print backgrounds of documents, such as patterns on birth certificates and scenes on personal checks. When erasure is attempted, the ink rubs away from the document. Features Displays a solvent/chemical fugitivity as a secondary security feature. Available for wet or dry offset presses. Ink Heat Reactive Irreversible Description This ink is colorless when printed, but changes to a sharp color when activated between 85 and 100 degrees Celsius. Features Ideal for protecting documents and envelopes from heat or steam tampering. Available for dry offset presses. Ink Pen Reactive Description Clear ink that transforms into a visible image when activated with a special felt-tip pen. Features Once reacted, also acts as a method of canceling the document so it can't be used again. Available for dry offset presses. Ink Penetrating Numbering Description This ink contains a component that penetrates red dye into the paper's fibers. The dye shows through to the back of the document. Features Most commonly used for crash numbering. Criminals often try to fleck numbers off paper with a razor. This ink makes it nearly impossible to lift the numbers from the paper surface without corrupting the paper substrate. Available for letterpress and wet offset presses. Ink Photochromic Description Ink immediately changes color when exposed to UV light and reverts back to original color or becomes colorless when the light source is removed. Features Can also be activated by sunlight, making outdoors identification easy. Can be overprinted with other security inks for added protection. Available for wet or dry offset and flexographic presses. Ink Solvent/Chemical Fugitive Description These inks run, stain or dissolve when they contact a myriad of chemical solvents (alcohol, acetone, bleach, etc.) used to alter or wash documents. Features Offers obvious visible signs of document tampering. Available for wet or dry offset presses. Ink Thermochromic Description Ink becomes colorless when exposed to a temperature higher than its reactive temperature. When the ink cools, it reverts to its original state. Features Doesn't require special devices to authenticate. Users commonly rub printed documents between fingers to cause heat-activated change. Available for wet or dry offset and flexographic presses. Ink UV Invisible Fluorescent Description These colorless or transparent white inks fluoresce under UV light. Features Undetectable under normal light. Available for wet or dry offset, flexographic and gravure presses. Ink Water Fugitive Description This ink runs and stains when it comes in contact with water or aqueous solutions. Features Offers obvious visible signs of document tampering. Available for dry offset presses. The information included in this chart was supplied by the Security Division of SICPA Industries of America Inc., Springfield, Va., and Gans Security & Specialty Inks Division, Fairfax, Va. Back to Document Security