SAN DIEGO--(BUSINESS WIRE)--G7 Productivity Systems (“G7”) enjoins leading financial software publishers, service providers and Internet check printing and delivery platforms to adopt Court-ordered Federal Trade Commission (“FTC”) consumer protection safeguards, as implemented by G7. The Court Order restrains financial service providers and parties acting in concert from creating and delivering checks for “any customer or prospect”, unless specific validation procedures have been performed. These safeguards by far exceed security features only built into check paper, which, although proven useless by fraudsters every day, are promoted by leading financial services providers, in order to create the illusion of check fraud protection, a feature strongly desired by consumers.
Background:
In September 2006 the FTC initiated a lawsuit against an Internet-based paper check printing and delivery service called Qchex. Some unknown fraudsters abused Qchex to create and deliver fraudulent checks by means of G7 software and printing supplies licensed by Qchex. Despite the fact that G7 had no relationship with or knowledge of Qchex users, the FTC demanded and achieved a court ruling, which held G7 responsible for consumer harm caused by unknown fraudsters. To safeguard consumers going forward, the Court ordered G7 and all third parties acting in concert to affirmatively deny users access to goods and services in connection with check creation and delivery - unless customers validate bank account control and identity through a 3rd party.
The FTC and the Court demand a broad scope of the ruling. Retailers, check writing software publishers, financial service providers, end-users, publishers and manufacturers of any tools or methods assisting users in performing check creation and delivery tasks are collectively enjoined to implement the safeguards.
“Non-complying industry participants place consumers in harm’s way, by offering anyone easy access to methods and tools to implement organized payment scams and succeed with check fraud even though new technology is available now to strongly protect consumers from check fraud,” says James M. Danforth, EVP of G7. Mr. Danforth continues in saying, “The Federal court order intends to protect consumers and businesses; it condemns check creation and delivery services assisting criminals. Check fraud inflicts immense losses to consumers, business and the economy overall, which amounts to a significant percentage of the nation’s GDP – on the order of hundreds of billions of dollars annually. Fraud related losses are directly passed on to the public by excessive fees charged by financial institutions, credit card providers and taxes, while non-complying industry participants directly benefit from fraud.” The Federal District Court in San Diego, as affirmed by the Ninth Circuit Court of Appeals, has ruled accordingly in connection with Case No. 06-CV-1952 JLS (JMA). Parties in violation of the Court’s Order are subject to a finding of civil contempt and disgorgement of all revenues associated with check creation and delivery products and services not complying with Court ordered consumer protecting safeguards.
G7 is enforcing the ruling and moves to enjoin industry participants to implement adequately protecting safeguards.
The safeguards provide for three main criteria:
- Proof of Bank Account Control – to ensure users are in control over the applicable financial account on which checks will be drawn.
- Verification of Identity – to ensure users are entitled to create and approve checks drawn on the applicable accounts.
- Display of contact information on the face of checks - to help consumers mitigate or prevent harm from unauthorized checks.
“Most Industry leading software publishers and print service providers violate the Court’s Order. For instance: Market leading online check ordering platforms and check writing features available with Quicken, QuickBooks, Online Payroll and other financial software applications fail to provide the required consumer safeguards. Customers are permitted to purchase checks online which are created and delivered on their behalf without adequate verification. These existing practices circumvent Court-mandated protective safeguards and allow non-complying participants to enable and benefit from fraud. Fraudsters can even take advantage of advertised counterfeit protection features built only into check paper, which helps them convey an even more trustworthy appearance to unwitting victims. Unless all participating parties comply with the provisions of the Court’s Order, consumers remain subject to unavoidable harm from fraudsters who are acquiring, creating and delivering unauthorized checks with full awareness of popular, market leading corporations,” says Mr. Danforth.
The Court’s Order bans the commercial offering of assistance in fraudulent check creation and delivery as a choice to customers. The technology to implement these safeguards is in active use presently via the Internet.
Effective Check Fraud Prevention:
G7 has identified www.gvalidate.com, a 3rd party service using highly secure and consumer friendly methods to validate account control and verify user identity. In addition G7 recommends VersaCheck X1, featuring DNA Secure™ check technology, which is integrated with the gValidate platform. VersaCheck® X1, combined with gValidate, safeguards users from check fraud, provides electronic transaction alerts and check verification for free. DNA Secure™ VersaCheck X1 software is available at www.versacheck.com. DNA Secure™ checks look noticeably different and display directions on each check’s face for consumers to easily verify check authenticity online – in real time. The DNA Secure™ check system makes payments by check highly protected and helps safeguard consumers and businesses. The system also reduces the cost of online payment processing significantly. Merchants have access to a highly secure check payment platform which is easy to integrate with websites, operates similar to a credit card system and other electronic alternatives, yet costs only a small fraction of these traditional, expensive merchant services.
About G7:
G7 Productivity Systems, Inc., based in San Diego, CA, over the course of over 10 years has earned a reputation as a leading publisher and manufacturer of productivity software and supplies for both home and business use. G7's products were distributed to over 4,000 retail outlets in the US and Canada. G7 is known for business automation solutions that enhance productivity while reducing costs. G7 products and services assist users to run their businesses, automate finances, create and deliver checks and forms, capture data, manage customer relationships, automate sales, human resources, accounting, and e-commerce.