Direct Deposit/Banking Service for Spanish Speakers

By Ferney Colorado & Melissa Burkhart

Many employers and HR managers have long noted with great frustration that their Spanish-speaking employees tend to be very reluctant to sign up for direct deposit of their paychecks. The advantages to an employer of having at least the majority of their staff on a direct-deposit system are considerable---greatly reduced costs for paper products, improved efficiency in payroll departments, greatly reduced chaos on payday, etc.

While these are very significant issues to many companies, the growing risk of check fraud makes it yet much more urgent for companies to find a direct deposit program that will meet the needs of all employees. Unfortunately, check fraud is relatively easy to commit, especially when employees cash their checks at smaller venues, like check-cashing operations or liquor stores. A common practice is for several people to present forged payroll checks at a local bank and attempt to get them cashed. It is easy enough to make forged copies of a legitimate paycheck and them and then modify only so that they will correspond with false identification.

Because of the volume of transactions that banks and check-cashing outlets process daily, as well the limited resources available for training bank personnel to recognize the latest fraud techniques, preventing this crime can be extremely difficult. Therefore, a growing number of banks make the effort to protect themselves from payroll check fraud by making it difficult or expensive for the individual to cash checks. This practice obliges ‘unbanked’ workers to cash checks at ‘fringe’ financial services outlets, liquor stores and the like---which can expose employers to increased risk that the fraud will occur in the first place.

For company management, it is very easy to see that a direct deposit program that serves and meets the needs of immigrant or transient workers is the ideal solution. Fortunately, Directo, an Atlanta-based company, has introduced a low-risk direct deposit program that is customized specifically for unbankable workers. Furthermore, Directo has gone to great lengths to bring foreign workers on board with this concept. Directo is aware that workers from Latin America in particular have a great mistrust of financial institutions and a strong preference for saving and spending money in cash. This is a result in part of economic instability in many Latin American countries. Spanish speakers will be very reluctant to trust a paper statement telling them their account balance and would far prefer to determine their own balance by counting bills in their hand. Often this mistrust is so strong that even those Spanish speakers who are eligible for a bank account will choose not to have one.

To assuage these doubts, Directo starts by providing literature, training, and customer service in Spanish. They also consult with Futuro Sólido USA http://www.futurosolidousa.com/ as to the best communication strategies for laying to rest Spanish speakers’ typical fears and misconceptions. With such a clear, concrete, multi-step, roll-out process, both companies and their employees are very happy to find that they can achieve significant savings and greatly enhanced security with Directo’s program.

The advantages of Directo---for both business owners and employees speak for themselves. Some of them are:

For Business Owners

Eliminates the risk of exposing the company corporate account number in environments where it might be vulnerable, such as check cashing outlets, which gain access to the bank account number.
Eliminates the risk of overdrafts because the company controls when the payments will be distributed
Eliminates the all-too-frequent chaos on payday, when employees often attempt to end a work day early, crowd into the office to receive their checks, and rush to the check-cashing establishment before it closes
Increases the company’s efficiency by eliminating lost checks or paper check production and administration.

For Employees
Greatly reduces the risk of loss from theft since many unbanked workers carry large amounts of cash on their person and accumulate their savings in cash at home
Eliminates the cost, as well as the time, associated with cashing checks
Increases access to the privileges, safety, security, convenience and other benefits enjoyed by banked workers
Greatly reduces the cost of sending money to family members in their country of origin, as Directo cards are used internationally at ATM's and this transaction is offered for a very modest flat fee---rather than a percentage of the amount being transferred

Furthermore, by sending money to their home countries by traditional means, immigrant workers also face potential fraud themselves that their employers are entirely unaware of. Many express concern that the personnel at the establishment where their wives or mothers are to pick up their cash will not be able to resist the temptation to pocket a bit of it. Once enrolled in this service, these workers enjoy the automated system that guarantees that the family they are supporting in their home country will receive exactly the right amount of money, according to the most current exchange rate.

Programs like Directo enhance a company’s benefit package at no cost whatsoever to the employer. Furthermore, when a company provides a system that so clearly has been customized to meet the specific needs of immigrant workers, those workers sit up and take notice. Their impression (although usually incorrect) of benefits in general is that these packages are not designed to meet their needs---but rather the needs only of the company and of those employees who were born and raised in this country. A service like this will go a long way towards demonstrating to them that this is not at all the case.

Ferney Colorado and Melissa Burkhart are dedicated to provide understanding and value of benefits programs for Spanish speaking workers. For more see http://www.futurosolidousa.com/.

Directo is a leading provider of payroll cards for the unbanked worker. Founded on the notion that there is a better way for Spanish speakers to receive and keep their hard earned pay, Directo celebrated its 10 year annivesary in November of 2008. http://www.directocard.com/

Positive Pay - Is it enough in these times? In the end, who gets hurt, really?

In these unprecedented times in banking, financial institutions now more than ever are reassessing relationships and in many instances, resetting the terms and lowering their risk with certain customers. In fact many financial institutions are demanding that certain customers change the way they do business.

Here's a scenario that the bank and company are trying to avoid; Outside a check casher, a fraudster waits for an innocent customer to arrive. The fraudster says, " Hey mister, there's a long line in there and you don't have all the time in the world. Let me cash this check for you. In fact, I won't charge you. I'll stay here and cash it with the rest of my checks." The innocent transaction takes place and the customer is on his way with cash in hand.

Meanwhile the fraudster takes the check, copies the check's microcoding with the company's bank and routing number. After a quick trip to the office supply store to purchase blank check stock, he then creates several other checks using the company's bank information. He hires a few people or in some cases, dozens of people to cash the fake checks all over town. He takes his 'profits' and hits another innocent person and company.

So who pays for this scam and the loss of thousands of dollars? If the checks clear through the banking system, the company typically ends up 'holding the bag' and absorbing the losses.

To curb this fradulant activity, banks offer a popular service called Positive Pay. From the Wikipedia definition of Cash Management "Positive pay is a service whereby the company electronically shares its check register of all written checks with the bank. The bank therefore will only pay checks listed in that register, with exactly the same specifications as listed in the register (amount, payee, serial number, etc.). This system dramatically reduces check fraud."

A bank's Cash Management Services organization is typically responsible for educating, selling and providing a Positive Pay solution to its customers. Once implemented many of the problems of check fraud disappear. But is the company totally out of the woods? What if this same fraudster hits again?

While it is true that fraudulent attempts may continue in some form, at least the bank and company are protected. With Positive Pay fraudulent checks are returned to the merchant. It's the grocer, check casher, liquor store or merchant that has decided to take the risk to cash the check. They then take the loss in this case. Somebody has to pay.

But there is more to the story, particularly for low income people. The 'unbanked' also takes the hit! Why? Because when the merchant cashes a fraudulent check from a company, the next man to attempt cashing a check may be turned away, or to make matters worse, paying an exorbitant amount just to get his hard earned paycheck cashed. Ultimately, who gets hurt, really?

And so while on the surface the company and bank have reduced their risk, what have they done to their workers, the individuals who are now paying more to get their checks cashed?

Companies must consider the ramifications of Positive Pay to the entire 'food chain' of payments. Some have looked to Directo paycards to help mitigate the risk and help their workers. Again, in the end, without a program like Directo, who gets hurt, really? Your workers, and you.

BH
http://www.directocard.com/

Directo paycards cut spending, improve your bottom line - click below to view the presentation.