Check fraud information, and tips for preventing it

Despite the increasing popularity of mobile banking, check fraud remains a significant problem for bank consumers. Even now, it's very important to be educated about the different types of check fraud and the tips for protecting yourself. 

Check Fraud Tips | Mail Theft | Protecting Outgoing Mail

Types of check fraud scams

  • Forgery: For a business, forgery typically takes place when an employee issues a check without proper authorization. Criminals will also steal a check, endorse it and present for payment at a retail location or at the bank teller window, probably using bogus personal identification.
  • Counterfeiting: Counterfeiting can either mean wholly fabricating a check - using readily available desktop publishing equipment consisting of a personal computer, scanner, sophisticated software and high-grade laser printer - or simply duplicating a check with advanced color photocopiers.
  • Alteration: Alteration primarily refers to using chemicals and solvents such as acetone, brake fluid and bleach to remove or modify handwriting and information on the check. When performed on specific locations on the check such as the payee's name or amount, it is called-spot alteration; When an attempt to erase information from the entire check is made, it is called-check washing. 

Check Fraud Tips for Consumers

Fraud professionals have become increasingly skilled and sophisticated, thanks to advances in readily available technology such as personal computers, scanners and color photocopiers. Criminals today can defraud you and your financial institution quite easily with a blank check taken from your check book, a canceled check found in your garbage, or a check you mailed to pay a bill. Therefore, it is important to follow a common-sense, logical approach with the way you use and store your checks.

  1. Store your checks, deposit slips, bank statements and canceled checks in a secure and locked location. Never leave your checkbook in your vehicle or in the open.
  2. Reconcile your bank statement within 30 days of receipt in order to detect any irregularities. Otherwise, you may become liable for any losses due to check fraud.
  3. Never give your account number to people you do not know, especially over the telephone. Be particularly aware of unsolicited phone sales. Fraud artists can use your account without your authorization and you may end up being responsible.
  4. Unless needed for tax purpose, destroy old canceled checks, account statements, deposit tickets, ATM receipts (they also frequently have your account number and worse yet, your account balance). The personal information on it may help someone impersonate you and take money from your account.
  5. When you receive your check order, make sure all of the checks are there, and that none are missing. Report missing checks to your bank at once. Should you fail to receive your order by mail, alert your bank. Checks could have been stolen from mail box or lost in transient.
  6. If your home is burglarized, check your supply of checks to determine if any have been stolen. Look closely, because thieves will sometimes take only one or two checks from the middle or back of the book. The longer it takes to detect any of your checks have been taken, the more time the criminal has to use them successfully.
  7. Do not mail bills from your mailbox at night. It is a favorite location from which a criminal can gain possession of your check with the intent to defraud you. Criminals will remove a check from your mailbox and either endorse it using bogus identification, photocopy and cash it repeatedly, scan and alter the check, or chemically alter it. The Post Office is the best location from which to send your bill payment.
  8. Limit the amount of personal information on your check. For example, do not include your Social Security, driver's license or telephone numbers on your check. A criminal can use this information to literally steal your identity by applying for a credit card or loan in your name, or even open a new checking account.
  9. Don't leave blank spaces on the payee and amount lines.
  10. The type of pen you use makes a difference. Most ballpoint and marker inks are dye based, meaning that the pigments are dissolved in the ink. But, based on ink security studies, gel pens, like the Uniball 207 uses gel ink that contains tiny particles of color that are trapped into the paper, making check washing a lot more difficult.
  11. Don't write your credit card number on the check.
  12. Use your own pre-printed deposit slips, and make sure the account number on your slip is correct. Thieves occasionally alter deposit slips in the hope you won't notice and the money goes into their account.
  13. Don't make a check payable to cash. If lost or stolen, the check can be cashed by anyone.
  14. Never endorse a check until you are ready to cash or deposit it. The information can be altered if it is lost or stolen.

Mail Theft

If you have had your mail stolen from your mailbox then you have become a victim of mail fraud, a federal crime. It is important to report this crime immediately and to take steps to protect your assets and credit rating. Here's a checklist of actions you should take:

  1. Notify your local postal authority. Ask to fill out Form 2016, available at your local post office, or by mail.
  2. Call your local police agency. Report the theft to police or the sheriff's department, particularly if you suspect that checks or other valuables were stolen. Local law-enforcement authorities have caught some thieves by circulating lists of stolen checks to local banks, then nabbing suspects who showed up to clear out a victim's bank account.
  3. Close accounts: If you suspect the thief obtained a credit card, checks or bank statement, cancel your accounts immediately and notify creditors both by telephone and in writing.
  4. Take action on missing checks: If a check payable to you is stolen, ask the sender to stop payment and issue a new one. Give police the stolen check number.
  5. Protect your credit: Make a list of creditors and see if any bills are overdue to arrive. Call creditors and obtain duplicate copies to avoid late payments, which could damage your credit rating-or worse. Be sure to pay your mortgage payment and car payment to avoid the risk of foreclosure or repossession. Don't forget other bills that could be missing, such as an annual insurance premium, property-tax levy or income tax refund.
  6. Determine what else is missing: Contact professional organizations to learn if you've missed meeting notices or dues statements. Ask friends and relatives if they've mailed anything to you recently. Were you expecting a new driver's license? If so, contact your state Division of Motor Vehicle (DMV) promptly.
  7. Talk to neighbors: Find out if their mail was stolen. Ask if anyone saw a strange person around your home or an apartment mailbox, then pass any information along to postal and law enforcement authorities.

Protecting Outgoing Mail

How can you make sure those cards, letters and packages you send will get to the recipients?

  1. Don't leave outgoing mail in your mailbox. That little red flag is an invitation to thieves. Take outgoing mail to your office, or mail it at a post office or mailing outlet store.
  2. Don't mail holiday gifts from home: They'll not only steal your package, they'll peel off the stamps and use those, too.
  3. Don't put mail in street mailboxes: The highest rate of mail theft locally is from those big, blue Postal Service mailboxes located on street corners and at other public places.
  4. Send valuables via registered mail: Registered mail is kept under lock and key, and it is signed for every time it changes processing centers.