Don’t Download Checks By Phone Software
CheckWriter™ complies with all Know Your Customer [KYC] and Anti-Money Laundering [AML] regulations. All similar software must comply with the Bank Secrecy Act/Anti-money Laundering Act, the Bank Securities Act, as well as U.S. Software Export Laws.
Did you know it is illegal to offer check drafting software for sale by download only, in the United States? If you see websites that offer check drafting software for download, beware.
Often if a company says, “Download Checks By Phone Software”, the software may contain malware, spyware or a virus that transmits or posts your customer’s data back to the programmer.
According to the provisions of the USA Patriot Act, the stipulations of the Customer Identification Program (CIP) and the requirements for a Bank Secrecy Act/Anti-money Laundering Compliance Program, software that facilitates payment cannot be made available for download unless the physical address and/or identity of the recipient is identified and verified.31 CFR 103.121 – Federal regulations requiring the CIP.
In addition, no company may ‘export’ financial software to certain countries listed on the Commerce Control List, which currently includes Cuba, Iran, Iraq, Libya, North Korea, Sudan, and Syria. The location and user identity of a download cannot be reasonably determined during an online transaction to comply with this export regulation. All software classified as “payment software” must ship to a physical address to comply with export regulations.
Due Diligence is required as cited in the US Securities Act to determine that the end user is not an individual that is likely to commit fraud, launder money, or fund terrorism.
The Federal Trade Commission (FTC) recently prosecuted Versa Check Brand, owner of Q-Chex Brand software for their use of easy to download payment processing software.
A federal judge ordered “Q-Chex” to cease its current method of online payment processing, which U.S. regulators said facilitated fraud. U.S. District Court for the Southern District of California, alleged that the company’s practices violate federal law and successfully obtained an injunction to stop such practices.
Before you buy, you may want to type in the name of the software or publisher into the Better Business Bureau website at http://bbb.org.
The BBB will list any complaints about the company, current and pending government actions, and other facts about how long the company has been in business, and what other services it provides.
Don’t get scammed by fly-by-night garage programmers, software pirates operating from a PO BOX, bootlegs, or any check by phone software that is offered for download or at ‘Half Price Outlets’.
Legitimate merchant software will require your business be validated, and at the very least, the vendor must know the customer or reasonably investigate the customer.
You may also find, check by phone software offered for download, does not comply with other regulations like EPC-6 for NO SIGNATURE REQUIRED checks and PCI / DSS compliance. Even if it is not malware, the software may be too old for your items to process through the modern banking system.
If banks need to process your deposits manually, it won’t be long before they flag, and then audit your business bank account. Once this happens, your bank will either send an urgent letter of compliance, and give the account holder 30 days to comply with modern check printing regulations, or they will simply lock the account and return your prior deposits unpaid, or reversed as counterfeit.