Disadvantages of Using Paper Checks - Essay Example

According to Schneider (2011), checks may be unsafe because merchants handling checks usually get access to individual account numbers, names, and other contact information that may make it easy to perpetrate fraud. Moreover, when checks are processed as electronic debits, merchants have access to personal accounts that may give them a chance to make unauthorized deductions. In addition, compared to debit cards that only require a four-digit PIN, checks usually need signatures, which may be easily imitated by a third party.

On the other hand, when an account holder or signatory to the check gets serious accidents that, they cannot sign the checks; it is obvious that the checks cannot work because there may be issues of mismatch in signatures. Not all merchants because of payment delays and the possibility of bounced checks may accept checks (Schneider, 2011). Keeping accurate financial records may be very cumbersome and time-consuming especially when dealing with canceled checks because they normally leave paper trails that the account owner must follow in case of fraud or theft. Reconciling the bank statement with the canceled checks is not an easy task.

Schneider (2011) explains that phishing has been rampant in recent years as expert criminals turn to the huge amount of money involved in online payment systems. The technique that involves committing fraud against clients of online businesses is common amongst financial institutions whose customers expect a high degree of security. The basic structure of a phishing attack sees an attacker sending e-mail messages to several recipients who may be account holders at the targeted Web site such as PayPal or Skrill. The messages that also include some links that appear as the link to the login Web site, normally inform the recipients that their accounts have been compromised and that they should log in to the account to correct the issue.

Instead, the links attached normally lead the users of the accounts to the phishing attack perpetrator’s Web site that looks almost similar to the targeted Web site. The recipient then ignorantly enters the login name and passwords, which the perpetrator captures immediately and uses in accessing the recipient’s account where they can easily access the victim’s account and make purchases or withdraw funds any time they may wish.

In some cases, the email may be designed to target a specific person or an organization, a fraud known as spear phishing that requires considerable research on the intended recipient (Schneider, 2011). This form of exploit normally increases the chances of letting the victim open their email and click the link to the phishing Web site. Such kinds of attacks have targeted employees of some organizations that normally use acronyms and familiar terms or languages thus gaining the victims’ trust hence convincing them to click on the phishing link.