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Cheque Fraud – Cheque Scams

Cheque Fraud is one of the oldest types of financial crime. Even in our computer and internet technology era, many still prefer to pay by cheque or bankers draft. The cause of this is people do not trust computer technology and have misconceptions about online banking. This is understandable because of the fact most of these humans are computer illiterate and what is unknown to human mind causes fear or rejection. This fear, however, is totally obsolete for statistics show online banking is safer than cheques. To protect yourself from cheque fraud I will show you some guidelines of necessary precaution you should take before you receive or send a cheque. Than it is your responsibility to inspect and analyze the cheque.

There are three main types of cheque fraud:

  • Counterfeit Cheques – These are not written or authorized by legitimate account holder. The existence of counterfeit cheques is supported by new technology. Thieves use printers, copiers and newest software to make clone cheques with high resemblance to the original. Many times these are hard to recognized as false even by experts.
  • Stolen Cheques – Cheque is not signed by account owner, rather stolen, usually out of the glove box of your car or your house. The signature is then forged and cheque used as pleased. Most of the time once you recognize your cheques are missing it is too late.
  • Altered or Forged Cheques – The Cheque is properly issued by the account holder but has been intercepted and the beneficiary or the amount of the item have been altered or new information added. To do so, sharp instruments and chemicals are used.
  • Closed Account – Bank accounts which are not used anymore or are closed, but cheques still exist for this particular account. If you don’t destroy those cheques you can be a potential victim.
  • New Account – An identity is stolen or made up by false documents. If a fraudster has personal documents and some personal information, he can request a bank account in your name. Bankers, unknowingly accept these requests and open new accounts, giving scammers the opportunity to steal money from individuals or businesses in your name.
  • Over payed Cheques – A false cheque issued by your “business partner” with a larger sum than required. The thief will then ask you if you can give him the change, making up different excuses why he transfered the over payed sum. The cheque is false and will be declined by the bank and you will end up losing the amount you gave him in exchange. Read Nigerian Fraud.

Some steps you can take to prevent your cheque being forged or information added after you wrote the cheque:

  • Leave no gaps in your words
  • Draw a Line after the name, amount and else where empty space was left
  • Use full and correct names for all the information
  • Prohibit transfer of cheque
  • Never pre-sign cheques
  • Don’t leave your chequebook in the glove box of your vehicle, a large percentage of stolen cheque books are taken from cars
  • If you close an account, destroy any remaining cheques relevant to that account

If receiving a cheque you can:

  • Ask for an ID. Only take a drivers license, personal ID or passport, don’t take other ID confirmations as they are relatively easier to fake. Even than be cautions, these documents can also be forged
  • Compare the signature on the ID against the cheque signature
  • Ask the person issuing the cheque to give you their home telephone number and maybe some sort of personal information, compare the number in your phone book and call the person at home
  • Refuse cheques written with a pencil or cheque with signs of being altered
  • Be wary of accepting cheques not signed in front of you or single cheques not being torn out of the cheque book. Thiefs often steal just one or two cheques to gain time before the owner of cheques suspects them missing
  • Don’t give change on cheques (if the cheque is false and you already gave change, you were scammed)

People who are cashing cheques end up losing funds when the banks realize the cheques are false. That’s because people are held responsible for anything they deposit into their accounts.

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14 Comments For This Post

  1. Anonymous Says:

    My friend Rajesh was received a cheque for supplying of stones.The cheque was deposited in bank and fortunately it was cleared and then after along time ,one day the banker told him it was a counterfeit instrument.Now he is in a big problem.Is there any solutions for this?Is there any best way to identify the counterfeit instruments?

  2. JohnS0N Says:

    Unfortunately your friend can’t do anything about it now. Maybe a call to the police or a private investigator would help if you have any information that could lead to the scammer. The check was mostly likely signed with a fake ID and therefor no traces are leading to the con artist. Best way to stop cheque fraud is by prevention. Your friend needs to assure those steps mentioned above, before accepting a cheque!

  3. MardiGrasMadness Says:

    We fell victim to check fraud this past week. Apparently, the woman took our account number and had checks printed with her info at the top and our account numbers at the bottom and then went on a spending spree. Some 1700.00 later we find out when we tried to use our debit card and got a strange message card not authorized. The bank never even called us to tell us what was going on, they just froze us out of our accounts over a holiday weekend. What a nightmare!

  4. Armand Pedroza Says:

    I am a production manager of Philippines’ leading security printer. We print 80% of the country’s bank checks and i have been directly involved in the banks’ investigations on fraudulent checks. Because of this rampant check scams, i was able to developed some security features that will deter check tampering. One of these is the reverse printing of the account number, meaning the the numbers are inside the black box and the color of the number is the color of the paper, that’s why it is reversed in color. Second I was able to developed a variable digital watermark. This is printed on any part of the check but the print is big and very very light in color and bearing the same account number. So if forgers were successful in replacing the reversed printing of account number, they will have a second headache in replacing the digital watermark of the account number. We have been quite successful in combating check frauds due to this inventions.

  5. mark Says:

    my wife received a cheque in the post for £2.500 from a unknown person to us, they knew her full name and full address. why would this be sent?

  6. Shelly Says:

    Oh my god, just seen the comment above. My partner is currently being questioned by police after he put a cheque in the bank for £2000 from an unknown sender. it came in the post with his name and address on the envolope. Turned out its fraudulent but we had no idea, guess we shouldn’t have cashed it but didn’t think there was anything illegal about cashing a cheque. silly i know but we thought it was worth a try even though we didn’t know who it was from. let me know when you see this post mark, would be interested to know what happened with your wife.

  7. mary Says:

    I had a same problem as the people above. Could you please tell me what to do in this situation, i already reported to the police, now I found myself with no money…

  8. Renee Says:

    The same thing just happened to me! I just got a check from UPS, with no instruction, letter, or anything. Just a check.
    The sender information gave ma an address in Ottawa, but when I tried to call the phone number, it was disconnected, and it was a New York number.
    They had my name, and my address, and the thing that ets to me- my CELL number, not my home, my cell (which I don’t give out to ANYONE)
    I want to know where these people got my information, and where it came from!

  9. arriele26 Says:

    I was a victim of check fraud, I met a man thought he was the one he talked good, said all the right things, was nice to my kids, took us places. He asked could he deposit some checks into my account because he left his bank card at his home in Reno, NV, I did not think anything of it, I let him put the checks in there, four checks later and $3000 he is gone, and all the checks came back acc. does not exist. now I’m on checks systems and can not get a back acc.What do I do in this situation? this happen in August of last year and I live in California did I wait to long to do some thing? Do I have rights in this situation? Can he be prosecuted, or is this a lost cause

  10. CECE Says:

    I cashed my benifits cheque and put my boyfriends number which isn’t in the same city & the teller asked if I lived in the city of the number, I told her “no, it’s my cell”. Can I get into serious trouble for this (if she called the number she would certainly reach me!)? I hope not! I don’t have my own phone number :(

  11. Yavor Says:

    Hello i have a problem with cheque too.
    I received cheque for 1.500 pounds from Unknown sender on the check is my name and my addres and that is all nothing more ?
    And i try to clearence the cheque but after 20 days bank told me must to find the sender but i dont know who is :D so its very stupid joke for me!!
    And now i will report the cheque to police beacouse really i dont expect money from no body.

  12. fredrick Says:

    hello, i receive a travelers cheque of 1500 dollars from a lady i met on craiglist and she ask me to follow d instruction on d check which i did write my name and sign on it as instructed and deposited it into my bank account and suppose money is for me to use and travel and meet her in carlifornia, she told me to call her when i cash d money which i did and she ask me to send her 1000 dollars via western union before i come to see her, pls i suspected fraud or stolen cheques, i fear i might go to jail for this. Pls i need help can anyone tell me what to do pls

  13. Re Says:

    I received a envelope with my full name,address,city and state on it. It was a check for 4,300 euros,and it was Dublin Italy…AIB was the name on it. The check had a piece of paper folded around it,UPS delivered it. My bank is confused,and so am I? Not sure if I should just open a account at walmart,and put it in there,leave it for a couple of months,see if there is any withdrawl,if so I know it’s a scam. I mean they can’t get nothing out except the check I put in there.Plus no checks,and no credit card,so they can’t get that info. Oh and not checkings but savings.If it’s a scam shame on them.

  14. concerned Says:

    My child paycheque has been lost and later when we reported to the Employer it was confirmed that the cheques has been cleqred. The employer showed us a copy of his bank statement where we found out that this cheque was cleared at ATM. The bank where the cheque was cashed even we reported the fraud said that they are not liable and refused to track the account where the cheque went to.
    We would like to report a fraud and don’t know how and where do we report it.

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