National Check Professional (NCP) Certification Practice Test

What is the primary fraud deterrent aspect of positive pay?

1. Daily audits of issued checks

2. Automatic matching of checks presented against issued checks

3. Refusal of checks over a certain amount

4. Third-party verification of payee identity

The correct answer is: Automatic matching of checks presented against issued checks

The primary fraud deterrent aspect of positive pay is the automatic matching of checks presented against issued checks. This process involves the bank comparing each check that is presented for payment against a list of checks the business has previously issued. If a presented check does not match the details in the issued checks list—such as the check number, dollar amount, or payee—the bank can flag or reject it before any funds are withdrawn from the business's account. This matching system adds a layer of security by allowing businesses to prevent unauthorized or fraudulent checks from being cashed or deposited. It acts as a crucial control measure to ensure that only legitimate checks that meet the predefined criteria are honored, significantly reducing the potential for fraud. While other options may involve measures to combat potential fraud, such as conducting daily audits or implementing third-party verification, these do not provide the same automatic and systematic protections that positive pay offers through its matching process.