When it comes down to it, you need all of your hard-earned cash to go where you intentionally send it or stay exactly where you put it. In an ideal world, this would always be the case, and any extra money you had wouldn’t be held at the whim of scammers and thieves. Though unfortunate, this type of robbery does exist, but worry not, as the secret to not falling for check fraud is to first be able to recognize what type of scams are out there.
What Is Check Fraud?
Check fraud or fake check scams work when a thief steals an account number to write fake checks in the account holder’s name and then tries to send the check or cash it fraudulently. Common check scams can happen to anyone and don’t end with personal checks, as cashier’s check scams are also prevalent.
To avoid these scams, you need to understand how check fraud happens and how to combat it by learning to spot fake personal, certified and cashier’s checks.
Types of Fake Check Scams
Checks have plenty of personal information right on the front, including your name, address, and account and routing numbers. Clerks or store owners may ask you to write your driver’s license or Social Security number on the front, exposing your details even further.
Here are some ways criminals can engage in scams involving checks:
- Online spending, selling and renting: When an online business allows you to pay for a product or service by check, all you need to provide is your bank’s name, routing number, account number and billing address. If someone gets access to your checking and personal information, they could make fraudulent purchases using your checking account.
- Account takeover: A thief who obtains your financial information can change the mailing addresses on your accounts to ones they can access. They can then empty your account before you even realize a cent is missing because the bank statements will no longer be delivered to your address.
- Closed accounts: Thieves who obtain a checkbook can write checks to unsuspecting merchants — even if the account is closed. If they have enough of your information, they could reorder checks for that account. You won’t even realize what’s going on; because the account is closed, you are no longer receiving statements that would indicate that someone is using your account fraudulently.
- Check-kiting: Check-kiting happens when a thief opens accounts at two or more banks to create fraudulent balances and takes advantage of the time it takes for checks to clear. Depositing a bad check falsely inflates the account balance temporarily, enabling the account holder to withdraw money against nonexistent funds.
- Counterfeiting: Some fraudsters print checks using check-writing software. If a thief has your bank account and routing numbers, they might be able to print counterfeit checks using your information. Counterfeiting isn’t exclusive to personal or business checks. Unfortunately, criminals can also fabricate a cashier’s check.
- Forgery: Check scams don’t have to be complicated. A thief can simply steal a checkbook, forge the account holder’s signature and write a check from that account.
- Fake paychecks or overpayment: If someone informs you that you have won a prize or recruits you, or you see a posting online for a job that involves working from home, make sure it’s legitimate. In this scam, the fraudster will send you a fake check for more than the agreed-upon amount. They will direct you to cash it or deposit and withdraw the funds, keeping a portion for yourself and wiring some back to them.
- Intentionally overdrawing: If you intentionally overdraw your account when you use a check to pay for something, even if your account doesn’t have the funds necessary to cover it, the consequences will depend on the bank’s policy. But writing a check when you know you don’t have the money to cover it is a dangerous, illegal practice, and you could be penalized or even prosecuted. It can also lead to bounced checks, overdraft fees and other charges that can put your checking account and savings at risk.
How Can You Tell If a Check Is Fake?
You can distinguish a fake check from a legitimate one by looking out for certain red flags. If you encounter some of the following issues, you should do some research before depositing the check.
Warning Signs of Fake Checks
- The check lacks rough edges or perforations.
- The name is printed in a different font from your address or other information on the check.
- The address of the bank or the customer is missing.
- The watermark or security thread is missing from the back of the check.
- You received the check undeservedly.
- The check has stains or discolorations, possibly from a thief using altering chemicals.
How To Protect Yourself Against Fake Check Scams
If you must write a check, exercise caution to prevent a fake check scam from happening to you. Using a locked mailbox can help reduce your chance of being targeted and deter thieves from obtaining your information.
Take the following cautionary measures against check fraud if you still use checks:
- Write checks only to trustworthy individuals and companies.
- Mail your checks securely or deliver them in person.
- Use a gel pen to prevent check washing. Never use a pencil or erasable ink pen.
- Balance your checkbook and check your bank statements for fraud every month.
- Monitor your bank statements to ensure there aren’t any charges that shouldn’t be there.
- Store your checks in a safe location.
- Avoid writing checks to people you don’t know or strangers you’ve just met.
- Cut down on the number of checks you’re writing. Writing a check to pay your credit card bill is one thing; writing one to pay the cashier for your weekly groceries might be riskier.
One of the best ways to prevent check fraud is to stop using personal checks. Paying your bills online through your bank account is safer, quicker and more secure than sending a check. Don’t forget that you can wire money or use an online transfer service for a faster and safer way to pay.
What To Do If You’re a Victim of Check Fraud
No matter how careful you are, clever thieves are out there trying to victimize you. If you become a victim of check fraud, do the following:
- Contact your bank immediately to report what happened.
- Cancel the check or money order if it’s not too late.
- Report it to the Federal Trade Commission, the National Association of Attorneys General and the FBI.
- Monitor your bank statements for irregularities.
Although there is no way to prevent fraud from being attempted, the best way to avoid check scams is to be alert and cautious.
Final Take To GO
If you suspect you may have a fake check, don’t cash it. Report it to the Federal Trade Commission, the U.S. Postal Inspection Service and your state protection agency, or ask your bank for help reporting the fraud. If you’re concerned about the authenticity of a check you’re dealing with, it’s worth taking the time to look into possible fraud.
Barri Segal contributed to the reporting for this article.
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- Federal Trade Commission. "How To Spot, Avoid, and Report Fake Check Scams."
- Federal Deposit Insurance Corp. 2022. "FDIC Law, Regulations, Related Acts."