Tips for preventing check fraud
Quick insights
- Check fraud occurs when someone uses checks to wrongfully withdraw money from an account.
- By using digital banking tools and practicing certain safety measures, you may be able to lower your risk of falling victim to check fraud.
- Routine monitoring of your bank account may help identify check fraud more quickly.
Even with today’s digital payment options, writing checks is part of many people’s banking routines. This traditional payment still has a place in modern banking, but fraud is a possibility when using checks.
Learning how to recognize and prevent check fraud can help you safeguard your money. In this article, we’ll share some tips to help you prevent becoming a victim of check fraud and a few steps you can take if check fraud occurs.
What is check fraud?
A check is essentially a written instruction to your bank to transfer a set amount of money from your account to someone else. If a counterfeit check is used, money could leave your account without your knowledge.
Check fraud occurs when someone uses checks to wrongfully withdraw money from an account. This type of fraud may involve creating counterfeit checks, modifying genuine ones or stealing checks to cash or deposit them without your permission.
Common types of check fraud
Check fraud can happen in a number of ways. While fraudsters often update their tactics, certain types of check fraud are more common and widespread than others. Here are some common types:
- Stolen checks: Criminals can intercept checks from the mail or take them from your belongings and attempt to use them. They can use them by attempting to cash checks made out to you.
- Altered checks: With this method, fraudsters rewrite the payee’s name or amount on a legitimate check, thereby altering it. Scammers may be able to use common household chemicals to change the printed dollar amount and/or payee name on a check—sometimes called check washing.
- Counterfeit checks: Counterfeit or fake checks are made to resemble authentic ones in order to obtain money fraudulently. Fraudsters can pick up your name, address and account number to create counterfeit checks with your information.
- Check kiting: Check kiting is a form of financial fraud that exploits the time it takes for a bank to process a check and move funds from one account to another. Because of this processing delay, it may take weeks for a bank to identify if a check was fake or if there were insufficient funds in the account to cover it, which may leave you responsible for the funds.
The goal in most check fraud cases is to access your funds before you or your bank realizes what’s happened.
Some ways to prevent check fraud
There are several actions you can take to help protect your accounts from check fraud and scams, including:
- Signing checks with permanent ink pens: Using a permanent ink pen when writing checks can make it harder for fraudsters to alter the details.
- Monitoring your account frequently: Checking your account activity through your bank’s app or online platform and looking for anything unfamiliar is one method to help prevent check fraud.
- Using direct deposit and online payment methods: Digital transfers lower the number of physical checks you need to handle. Opting for digital payments might include more modern security features than checks can provide.
- Filling out checks carefully and thoroughly: Making sure to write the full amount and payee’s name, leaving no blank spaces that could be changed, can help keep your checks more secure.
- Shredding old or unused checks: Properly disposing of outdated checks may help keep your account information private.
- Mailing from secure locations: Mailing checks from inside the post office is often a more secure option than leaving them in other drop boxes or a residential mailbox.
- Ordering high security checks: Another way to help prevent check fraud is to use high security checks that provide safety features embedded within the check, which work to minimize the risks of fraud. Check with your bank to see if they offer high security checks or use a reputable check provider service.
It can also be helpful to store your checkbook in a secure location and only share your checkbook with people you trust.
What to do if you’re a victim of check fraud
By safeguarding your checks and account information, and acting quickly when you suspect fraud, you can help reduce your risk. You should contact your bank or credit union right away to report any suspicious activity.
Most banks have a dedicated fraud team who can help guide you through the resolution process. In certain situations, you may be advised to file a police report or inform the postal service if stolen mail is involved.
In addition to watching for unfamiliar or unusual transactions, your bank may suggest replacing checks, adding a stop payment on checks or changing your account number to strengthen your security.
In summary
Common forms of check fraud include stealing checks, altering checks and creating counterfeit checks. Anyone who uses checks can be exposed to check fraud, but practicing a few basic habits may help safeguard your accounts. Regularly monitoring your accounts, opting for digital payment solutions when possible and responding promptly to unusual activity can help protect against check fraud. If you have been a victim of check fraud, contacting your bank as soon as possible can help prevent additional fraud from occurring.
