We are in the beginning stages of talking about offering lock box services for our customers. We would use a 3rd party to process the payments in another state. My concern is, we are constantly dealing with counterfeit checks from a few large customers that mail checks to a lock box in another state to pay their vendors. Of course the 3rd party we are looking at says using the 3rd party and lock box services eliminates the threat of internal theft. They don't mention that it greatly increases the external theft. Does anyone have any experience with lock box services? I don't see why the customer can't just use remote deposit capture from their office. Who handles issues with encoding errors? Why can't they request to be paid by ACH instead of check?

Thanks

we use a 3rd party to process our lockbox, they process hundreds of thousands of checks per day, much more efficiently than we could when we had the function in house. i have not seen a greater chance of or actual fraud for this versus when it was in house. why can't the customer just use RDC? well, if they are receiving 10s of thousands of checks, a lockbox service make much more sense.

encoding errors are handled just like any other encoding error, via an adjustment process via FRB, clearing house, or directly with other bank.

Thanks for the information!