Method for identifying counterfeit negotiable instruments

Registers – Systems controlled by data bearing records – Banking systems

Patent

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Details

235380, 235382, 23546201, 705 35, G06K 500

Patent

active

060392495

ABSTRACT:
The invention comprises a method for determining whether a negotiable instrument is counterfeit. The method includes the step of placing on the instrument an identifying tag, preferable and RF-ID tag, and also a magnetic strip capable of storing information. The method also includes the step of recording on the RF-ID tag at least one computer generated, preferably random number and/or a number related to the date and time (e.g. the year, month, date, hour, minute, and second) of its being printed. Alternatively, or additionally, the information recorded on the instrument's magnetic strip is associated with the number of encounters since issuance into public use. This information thus recorded on the instrument is stored in a secure computer database record corresponding to the specific instrument. Each time a bank transaction of the instrument takes place, the instrument is scanned. If the information obtained from the instrument upon scanning matches the random numbers obtained from the database record, then a transaction is authorized. That is, following the successful outcome of the first comparison, the transaction count obtained from the instrument is verified against the transaction count fetched from the database record. If any one of the comparisons fail, then the instrument may deemed as invalid. Otherwise, the instrument is cleared, and the transaction count is incremented and updated both on the instrument and in the database record in preparation for a subsequent transaction and processing.

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