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5 Ways to Prevent Check Fraud Scams

Check fraud is a billion dollar problem. Check fraud victims include banks, businesses and consumers. Our current system for cashing checks is somewhat flawed. Checks can be cashed and merchandise can be purchased even when there is no money in the checking account.

There are 5 main forms of check fraud to watch out for:

Forged signatures are the easiest form of check fraud. These are legitimate checks with a forged signature. This can occur when a checkbook is lost or stolen, or when a home or business is burglarized. An individual who is invited into your home or business can rip a single check from your checkbook and pay themselves as much as they like. Banks don’t often verify signatures until a problem arises that requires them to assign liability.

Forged endorsements generally occur when someone steals a check written to someone else, forges and endorsement and cashes or deposits it.

Counterfeit checks can be created by anyone with a desktop scanner and printer. They simply create a check and make it out to themselves.

Check kiting or check floating usually involves two bank accounts, where money is transferred back and forth, so that they appear to contain a balance which can then be withdrawn. A check is deposited in one account, then cash is withdrawn despite the lack of sufficient funds to cover the check.

Check washing involves altering a legitimate check, changing the name of the payee and often increasing the amount. This is the sneakiest form of check fraud. When checks or tax-related documents are stolen, either from the mail or by other means, the ink can be erased using common household chemicals such as nail polish remover. This allows the thieves to endorse checks to themselves.

Uni-ball pens contain specially formulated gel ink that is absorbed into the paper’s fibers and can never be washed out. The pen costs two bucks and is available at any office supply store.

Consider a locked mailbox so nobody can access your bank statements.

Using online banking and discontinuing paper statements.

Never toss old checks in the rubbish, always shred them.

Have checks delivered to the bank for pick up opposed to your home.

Guard your checks in your home or office, lock them up.

Go over your bank statements carefully.


Comments: (2)

Melvin Haskins
Melvin Haskins - Haston International Limited - 13 October, 2010, 16:03Be the first to give this comment the thumbs up 0 likes

What is a check?

Here in the UK cheques (please note the spelling) have hardly been used for the last ten years or more. With the introduction of standing orders and direct debits more than 40 years ago and with the introduction of variable amount direct debits and debit cards in the last 20 years, most people write less than 10 cheques per year.

My cheque book is several years old and I doubt that I have written more than five cheques in that time.

Frankly, I do not need a cheque book in the 21st Century.


Mel Haskins


John Dring
John Dring - Intel Network Services - Swindon 18 October, 2010, 22:34Be the first to give this comment the thumbs up 0 likes

I'd almost agree but we're not there yet.  For example, I note I am writing more cheques than previously these days, sometimes just to avoid the Credit/Debit charge which is creeping into payments.  Its just the principle that if I am making a merchants life easier and more instant, they should shoulder the fee, not me.  Sometimes its simply a ploy to make me pay with a Debit card to forgoe the additional protection paying with a Credit Card offers me, but since both are 'Visa' in my case, I don't see the different from a merchants perspective. 

Conversely, I HATE receiving cheques, because they invaribly expire before I physically get to a bank (and they are valid for 6 months or even a year).

Lastly, try cashing a US check in the UK - NO GUARANTEE of payment whatsoever between the banks. I don't believe it but my UK Bank told me "USD cheques can be returned unpaid apparently for a period of 6 years after presentation"  What's that about.

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