Your Checkbook Is an Identity Theft Time Bomb Waiting to Go Off

Posted in Checking Accounts • January 22, 2014

check fraud

About a decade ago, the most common money transactions were done with cash or checks from a checking account. In fact, checkbooks were so common when it came to making payments that fashion trends actually revolved around them, including designer checks and checkbook covers. Now, checkbooks are what VHS are to Blu-Rays. They are still used, but not as frequently. And because of check fraud, that is a very good thing.

Types of Check Fraud

It is good that checkbooks are becoming extinct because they are a very dangerous way for individuals to pay for items. There are several types of check fraud to be aware of when you carry a checkbook around with you.

The danger of personal checks is that one single check can contain a person’s whole financial story on it. How so? Checks usually display a person’s name, address, bank name, checking account routing number and account number. With this information, anyone can take over your account or purchase items with your money.

As Frank Abagnale, the infamous check forger who inspired the film Catch Me If You Can, explained to U.S. News:

“If I write a check at Walgreens or CVS, I’m leaving that check behind with the clerk. And on that check is my name, address, phone number, my bank’s name and address, my bank account number, routing number, and my signature. And if that store clerk writes down my driver’s license on the front of the check, in nine states — including the one I live in — that’s my Social Security number, too. Then, next to it he writes my date of birth.

“Well, I don’t get that check back. So I don’t know if CVS destroyed the check, if they put it in a warehouse for seven days or 30 days. What I do know is that anyone who sees the front of that check has more than enough information to draft on my bank account”

Online Spending

Many websites allow for the purchasing of items with your bank’s name, routing number, account number and billing address. Many sites do not verify the true identity behind these accounts.

Account Takeover

Account takeover is one of the more prevalent forms of identity theft. It happens when a thief gets a hold of your financial information, then changes the mailing address and wipes your bank account clean before you even realize a cent is missing.

Check Washing

Another type of check fraud is check washing. Check washing was a huge problem a decade ago, and it still exists today. Many inks are simple to remove from checks, allowing the thief write in their own amount. If you do not have the means to prove that you never wrote the stolen check, then you could be out of luck and out of money.

Frank Abagnale Explains Check Washing (Fraud Channel by Intuit)

You Might be a Danger to Yourself

One more possible danger of carrying and using checks is the danger of yourself to your own finances. Since checks can used to pay for items at the time they’re written, you do not necessarily have to have the money in your account at that time.

Known as “paperhanging,” writing a check when you know you don’t have the money — and hoping to have a bigger balance by the time the check finally clears — is also a type of fraud and can lead to bounced checks, bank overdraft fees and other charges that can put your checking account and savings at risk.

How to Protect Yourself from Check Fraud

The best way to protect yourself from the dangers personal checks pose is to stop using them cold turkey, which is certainly not a hard thing to do. Learn how to pay bills online through your bank account, which is actually more safe and secure than sending a check, a lot less time consuming and saves on postage costs. I even pay my tithing to my church online; I just enter in my church’s information and address, and my bank sends them a check every time I pay.

If you insist on writing a check, do so to only secure and trustworthy individuals and companies. Mail them in a secure manner or hand deliver them. Also, be sure to use a gel pen or to have your check printed to avoid possible check washing practices. Uni-Ball pens are specially designed to bleed into paper so that the ink cannot be washed away by chemicals.

Personal checks and checkbooks may be going out of style, but the dangers behind them are still alarmingly real and growing. To keep yourself and your finances safe, stay away from checks all together. Technology is at its peak — there is no need to carry a checkbook anymore.

 

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