In This Post
What is Check Fraud?
Check Fraud Example
What Are Some Check Fraud Warning Signs?
How Can I Protect Myself From Check Fraud?
I Think I May Be a Victim of Check Fraud. What Can I Do?
Where Can I Find More Information on Check Fraud?
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In our digital-first society, checks can feel like a thing of the past, but they’re still necessary in some situations. While their popularity has waned over the years, the risks associated with using them have – unfortunately – remained.
Let’s talk about check fraud – what it is, what it looks like, and how you can protect yourself.
What is Check Fraud?
According to America Saves, “check fraud happens when someone uses a check illegally to steal money or gain access to personal and financial information.”
Check fraud can occur in several different ways:
- Forging someone’s signature on checks or changing the amount the check was originally for.
- Stealing checks intended for someone else out of the mail.
- Creating counterfeit checks that look authentic but don’t link to a real account
- Encouraging a victim to deposit a fake check to gain access to their banking information.
- Writing a check you know you don’t have the funds to support (also known as writing a bad check).
- Check kiting (writing checks back and forth between different accounts to hide the fact that the funds don’t actually exist).
In a nutshell, any criminal behavior featuring checks as a key element may fall under the umbrella for check fraud.
Interesting Fact: For a few years, check fraud was actually on a decline as digital fraud rose. Now that digital security measures are much stronger, scammers are returning to older methods – like check fraud.
Check Fraud Example
Let’s look at an example of what check fraud might look like in real life.
Jane runs a small, local grocery store in Anderson, SC. She pays many of her business expenses using checks that she sends out from her mailbox at home.
One day, a fraudster looks through Jane’s mailbox and steals a check meant to pay the shop’s power bill.
The criminal then uses advanced printing and whitewashing methods to make the check look like it was made out to him – and for a much larger amount than Jane had originally intended for the power bill.
The fraudster cashes the doctored check at a check-cashing business and disappears with Jane’s money.
Jane doesn’t notice until she arrives at her store one morning to find that the power was cut off overnight and all of her refrigerated and frozen goods have spoiled, costing her thousands of dollars in lost inventory.
What Are Some Check Fraud Warning Signs?
There are a few warning signs you should keep an eye out for.
- A check that you mailed has not been cashed in the timeframe you expected.
- A check you wrote clears your account for the wrong amount or is cashed by someone you don’t know.
- You receive a past-due notice for a bill you are sure you paid.
- You receive a check that doesn’t feel or look like a check typically would.
- You’re missing checks from your physical checkbook.
- Someone (i.e. a potential employer or renter) sends you a check and tells you to cash it and send a certain amount elsewhere.
- The writing on a check looks altered in some way.
How Can I Protect Myself From Check Fraud?
Fortunately, there are several things you can do to protect yourself from check fraud:
- Never write blank checks, even to someone you trust. You never know when that could fall into the wrong hands!
- Keep your checkbook in a secure, private place.
- Use fraud resistant pens that make “washing” a check virtually impossible
- Use direct deposit when possible or make payments on the company’s official website. If you need to mail a check, do so from a secure place like a post office. Never attempt to cash a check from an unexpected or unknown source.
- Keep a close eye on your account statements and if available, view your check images through digital banking
- Trust your gut; if something feels sketchy, it probably is.
I Think I May Be a Victim of Check Fraud. What Can I Do?
First things first, let’s lock down your financials.
Give your financial institution a call to let them know what happened. They can advise you from there – steps they may take include freezing your accounts or putting a fraud alert on your account. They can also help you figure out what reports (if any) to file with the authorities.
Where Can I Find More Information on Check Fraud?
For more information on check fraud, visit the Office of the Comptroller’s site.
This material is for educational purposes only and is not intended to provide specific advice or recommendations for any individual.
