Cheque fraud is one of the biggest challenges facing the nation’s financial system. Using computer technology and basic resourcefulness, criminals, either independently or in organised gangs, are finding it increasingly easy to manipulate cheques in such a way as to defraud consumers and businesses. While both consumers and businesses may suffer financial loss from cheque fraud, consumers also face the inconvenience and anxiety caused by resolving problems with their banks and local merchants, as well as possible repercussions with credit bureaus.
Fraud schemes involving cheques take many forms. Cheques may be:
– Altered, either as to the payee or the amount.
– Counterfeiter.
– Forged, either as to signature or endorsement.
– Drawn on closed accounts.
– Used in a variety of schemes.
Cheque fraud criminals may be insiders, independent operators, or organised gangs. The methods they use to further cheque fraud include:
– Getting customer information from insiders.
– Stealing bank statements and cheques.
– Working with dishonest employees of merchants who accept payments by cheque.
– Rifling through trash for information about bank relationships.
How to prevent Cheque Fraud?
- Make sure your cheques are endorsed by your financial institution and incorporate security features that help combat counterfeiting and alteration.
- Store your cheques, deposit slips, bank statements and cancelled cheques in a secure and locked location. Never leave your chequebook in your vehicle or in the open.
- 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 cheque fraud.
- Never give your account number to people you do not know, especially over the telephone. Be particularly aware of unsolicited phone calls.
- Unless needed for tax purposes, destroy old cancelled cheques, 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.
- Limit the amount of personal information on your cheques. 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 chequing account.
- Don’t leave blank spaces on the payee and amount lines.
- Don’t write your credit card number on the cheque.
- Don’t make a cheque payable to cash. If lost or stolen, the cheque can be cashed by anyone.
- Never endorse a cheque until you are ready to cash or deposit it. The information can be altered if it is lost or stolen.
