5.15.1999

Oxford Pair Take Bad Checks
The Clarion-Ledger

OXFORD, MS - It can be embarrassing.

You thought you had enough money in your account to cover a check, but you were off by a few pennies and it bounced.

Then the humiliation is compounded when your name shows up on the "Do Not Accept Checks From These People" list, and you feel you can't show your face at your local grocery store.

But you don't have to end up on that list.

Former University of Mississippi students John Lewis and William Alias III were hoping they could prevent the bounced-check stigma with the business they started while they were still in school.

Oxford-based Security Check is a check collection and verification service. Along with dozens of others like it across the country, Security Check helps merchants avoid accepting bad checks, and collects the ones that do bounce.

"We think that our ultimate responsibility is to treat the customer with respect, and keep that customer coming back to the merchant," said Alias (pronounced ah-LYE-us).

Check collection, Alias said, is not a business that makes threats. If that happens at all, he said, it's in debt collection.

Check collection is different," Alias said. "There's almost never a dispute on a check. Debt's always disputed."

Security Check makes its money by collecting on bounced checks written to merchants. When a merchant receives a bad check, he turns it over to the company. Security Check sends a letter to the check writer, asking him to pay the face value of the check and a $15-$25 service charge. Operators then call every day for up to 90-100 days, reminding the check writer to pay. Alias said it rarely takes that much time.

After 100 days, the company will turn the checks over to a legal firm that makes more strenuous and expensive demands for payment.

The company pays the face value of the check to the merchant and keeps the service charge. It also maintains a data base of people who have not paid off bad checks written to any of its clients. Merchants can use that data base when deciding whether or not to accept a customer's check.

Bad-check writers fall into three categories, Alias said. Careless check writers: Many people do not properly maintain their checkbooks. Marginal check writers: Some people have little money in their accounts and are depending on making deposits before the checks clear. Criminal check writers: These are people who forge checks or write checks they know have no possibility of clearing.

The majority of the checks bounced come from people in the first two categories, Alias said. He added most of those people are good customers.

Charles Bruce, founder and director of the National Check Fraud Center in Charleston, S.C., said his organization estimates that 75 percent of bounced checks are collectable with minimal efforts. "Most of them, you send them a letter, make them aware, and they'll pay," Bruce said. "It's the other 25 percent you have to worry about."

The center provides pointers to businesses on how to avoid check fraud. One of those recommendations is to use check verification and collection services.

John Hall, spokesman for the American Bankers Association, agreed, saying verification services like Security Check help preserve customer confidence in the checking system.

Bruce said verification services are becoming more important and more popular."There's a number of companies that have gone from one or two states to going nationwide in the past two years," he said.

Security Check now operates in Mississippi, Texas, Missouri, Arkansas, Georgia, Florida, North Carolina and South Carolina. It has expanded its business through partnerships in the outlying states.

Alias said the regional offices sell the service to merchants, and the 160 Ole Miss students who serve as the company's work force process the checks in Oxford. "We would like to have an office in every area code," Alias said.

"That's our long-term goal."

Security Check www.securitycheckllc.com is a privately owned and operated company that offers a full range of payment and customized process solutions. By offering their clients a customized payment solution, Security Check has been able to develop new products that will enable their clients business to grow.