Certified Fraud Examiner Practice

The concept of 'Positive Pay' is a fraud prevention tool used by banks to protect businesses from check-related fraud. It involves a system where checks are only paid if they match the details that have been pre-authorized and submitted by the check issuer. This means that when a business issues checks, it also provides the bank with a list of check details, including check numbers and amounts. When a check is presented for payment, the bank cross-references it with this list and only processes it if it matches, thereby significantly reducing the risk of fraudulent checks being paid out.

In contrast, the other options address different aspects of banking and fraud prevention but do not specifically define 'Positive Pay.' The method for alerting banks of unauthorized transactions relates more to fraud detection after an incident has occurred rather than a preventive system like 'Positive Pay.' Insurance against check fraud in online banking may provide coverage for losses, but it does not prevent fraud proactively. Similarly, providing alerts for low account balances is a helpful banking feature but is unrelated to the integrity of check payments. Therefore, option A accurately describes the function and purpose of 'Positive Pay.'