What process does a check-cashing company go through to verify a business check is valid?

Instead of phoning the Treasury Department, double-check the check with your tax preparer and the bank that issued the RAL check. The majority of institutions have an automated mechanism to verify these checks. You can visit the KRT Inspect Company for more information. Checks from one company to another are cashed.

All commercial customers must follow three broad check cashing risk control guidelines:

• There is a physical presence.

Checks will not be cashed unless the endorser is present at the moment of cashing and takes 100 percent of the transaction’s proceeds with him. Unless previously authorized by corporate resolution to cash checks on behalf of the firm, the endorser must be an official of the company. Compliance must specifically approve non-officer endorsement after studying the original resolution document. Compliance sends out a list of approved endorsers regularly.

• On file is documentation.

The following original papers must be included in the file. The compliance officer will periodically check the file to ensure that all documents are current:

• While the firm’s age is not a specific approval criterion, we will proceed with care when approving companies that have only been in existence for six months or less.
• Taxpayer identification number 
• Occupational or other types of business licenses (may be waived by compliance officer if the customer is in a business that does not require a license)
• Copies of government-issued identity for each owner/officer, as well as the endorser conducting the operation
• Suppose a non-officer is to be authorized to cash checks. In that case, the client must additionally produce a corporate resolution signed by all officers in the presence of a Smart Center staff.

Know your client

Each customer file will have a summary sheet. You should record additional information about the customer and their business that will assist us in determining if their transactions are for a genuine business purpose. This information will be evaluated regularly and may contain the following: the number of employees or workers on the job in issue, the type, and location of work being compensated, etc.

With each check cashing transaction, the Powercheck POS software will capture an image of the customer, and the check will be scanned (front and back) by the system following endorsement. Unless the consumer is personally known by the staff and his ID is already in the system, the customer must produce formal identification at the time of the transaction. 

• Call the bank

You must attempt to contact the bank to confirm the account and the availability of funds. Not all banks will verify funds, but you must call to determine which ones will.

• Approval

If the check amount exceeds your limit, get an approval code from your supervisor or Compliance.

• Fingerprint

If the check is for more than $10,000, the customer must print the right index finger on the face of the check with the ink pad provided.