New Feature Protects Law Firms against Altered or Counterfeit Checks
NORTH BRUNSWICK, NJ – September 24, 2014 – CosmoLex version 2.0, the latest release of the cloud-based law office software, adds support for Positive Pay, a customer authorization system that greatly reduces the instance of check fraud.
The Association of Certified Fraud Examiners estimates businesses lost over $3 billion to check fraud in 2014 alone. Positive Pay is a system used by most banks to greatly reduce check fraud by implementing customer authorization of each check. Customers send the bank a list of all checks issued. When a check comes in for payment, the bank compares the check number and amount to the list. If they do not agree the check is rejected. The system makes it nearly impossible to alter or forge checks from participating companies.
Check fraud can be especially devastating to practices in certain areas of law such as personal injury and real estate settlements. Even a solo firm could have over a million dollars in a trust account so the potential loss is enormous, and the large number of checks issued every month means multiple parties are involved further increasing the fraud potential.
A Positive Pay chain has three components: the accounting software, the bank, and a third party application that converts the accounting software information to a format accepted by the bank. Since there is no standard Positive Pay format, each bank has its own requirements thus the need for a third-party translation application.
CosmoLex version 2.0 adds Positive Pay support by making it easy for a law firm to generate a report listing all uncleared transactions. This report is imported into a third party application that converts it to the proper format and sends it to the practice’s bank. Positive Pay support is automatically available to all CosmoLex subscribers at no additional cost.
“Unfortunately, many law firms don’t have any kind of check fraud protection because they worry about the workflow and cost involved,” says Rick Kabra, CEO of CosmoLex. “CosmoLex streamlines the Positive Pay process so it takes just a few minutes per day.”
CosmoLex is a cloud-based legal practice management system with full trust account management and is used by hundreds of law firms across the country. Other features included in the version 2.0 release are team calendars, task lists, appointment setting and simple client and matter import from other legal applications.