Check Fraud
by Sol
Zenytzen
Ever since the time money was invented, scam artists have always
tried to make a living by parting people (not just fools!) from
their money. When coins, gold and other precious items were used as
money, the only option was for people to steal it. But with the
advent of paper money and banking instruments, scamsters have begun
resorting to other dubious means of stealing money. Check fraud is
probably the most common technique used by fraudsters. Statistics
reveal that I the United States of America alone, the number of
cases of check fraud far outweigh all other cases of fraudulent
money transactions.
But what exactly is check fraud? And how does one prevent check
fraud from happening? Well, in order to answer those two crucial
questions, it is necessary to understand how checks work in the
first place. When you issue a check to someone, they deposit it in
their bank account. Their bank sends this check for clearing to a
clearing house. The clearing house verifies with your bank if there
are sufficient funds in your account and replies to the first bank.
Based on the information received, the bank deposits the amount
into the account of the person the check was issued to.
Now check fraud can occur at any or all of these stages. The
most common form of check fraud is when someone forges your
signature on a check, making it seem like you have issued the
check. A slight variation of this kind of check fraud is the
endorsement variety, where a stolen check issued by you is endorsed
and cashed by someone other than the intended payee. Still other
varieties of check fraud involve the use of counterfeit checks
which can easily be created by anyone with good design skills, a
computer, access to security paper and a fine printer. In fact, the
relative inexpensiveness of such high quality equipment has made
the job of forgers and check fraud specialists so much the
easier.
Think back to the Leonardo Di Caprio film ‘Catch me if you can’.
If he could cash thousands of checks worth millions of dollars with
relative ease, what prevents more determined criminals from doing
so? While most checks have in-built design and security features,
this has not prevented perpetrators of check fraud from attempting
to copy them. Altered checks also come under the purview of check
fraud. In this case the check is genuine, but the intended
recipient, the account number or other details could be altered to
enable fraudulent activities.
If it goes unchecked, check fraud could prove to be damaging to
your business or personal life. Unfortunately, all of us depend in
some degree on checks. Therefore, we cannot hope to do away with
checks to prevent fraud. The only thing that can be done is to be
on high alert all the time and
to ensure that no
suspicious check is accepted or passed by the bank. Many banks and
financial institutions have safety measures in place just to
prevent check fraud. But unless you exercise due diligence, you
might just become the victim of check fraud.
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