Check fraud is a growing problem in the United States. The Office of the Controller of the Currency estimates that it costs businesses and consumers about $1 billion each year. You should be aware of the various scams and take steps to fight them.
Common Forms of Check Fraud
Check fraud artists work in a variety of ways. You will need to understand their MO to protect yourself. Here are some of the most common scams.
- Altering the value of the check
- Forging a signature on a stolen check
- Committing identity theft to order checks in the victim’s name
- Recording the checking account number to extract money directly
- Counterfeiting checks and conning other people into cashing them
How Do You Avoid Check Fraud?
The Fair Credit Billing Act protects customers from credit card fraud, by limiting customer liability to $50. Unfortunately, there aren’t similar protections to guard against check fraud. You will need to be diligent about protecting it to avoid incurring substantial losses.
Consumers that understand the risks of check fraud are considerably less likely to be victims. Here are a number of steps that you should take to reduce the risk of check fraud:
- Keep Checks Secure. Always store your checks in a safe place. Most check fraud occurs after a checkbook is stolen, so take steps to reduce it.
- Fill All Empty Spaces in Your Check. Never leave any empty space when writing a check. A scammer can add additional figures to get more money from you.
- Report Missing or Stolen Checks Immediately. Always report any lost or stolen checks right away.
- Know who you are writing your check to. You need to make sure that you trust the person that you are writing your check to.
- Use specialty checks. Specialty checks are much more difficult to forge. You will want to consider purchasing animal checks or others with graphics on them to improve security and reduce fraud.
- Review your bank account regularly. It is a good idea to scan through your bank account at least a couple of times a month. Monitor your account carefully for any suspicious transactions and report them to the bank as soon as possible.
Check fraud has grown substantially over the last few years. The only way to avoid being a victim is to understand the approaches criminals take.