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Check Fraud

Check fraud is one of the largest challenges facing businesses & financial institutions today. The advancement of computer technology has made it increasingly easy for criminals to manipulate checks in such a way as to deceive innocent victims.  By definition, check fraud is when a person has located and/or is reproducing legitimate account information by making or printing false checks or by using chemicals to alter the original check for the purpose of deceiving merchants or consumers in order to make a profit.  Many times, check fraud can be a source of funding for gangs or drug rings.

Unfortunately, consumers are not aware that they are a victim of check fraud, as it can be easily carried out unbeknownst to the victim.  In most cases, these crimes begin with the theft of a financial document, such as a blank check or deposit slip.  Most often, this can be done by stealing a check from your home or vehicle taken in a burglary or simply removing a check you have placed in your mailbox to pay a bill.  If the consumer is not mindful of their account information on a daily or weekly basis, they could fall victim to this disastrous crime.

There are several types of check fraud: forgery, counterfeiting & alteration, passing a worthless document, and/or check kiting.

Forgery for a business, typically occurs when an employee issues a check without proper authorization.   Forgery, for a person, occurs when a criminal steals or makes a check using the victim’s information & then presents it for payment at a store or bank, typically using a false name.

Counterfeiting a check can mean either making a check using a computer, scanner, check printing software & a printer or duplicating the same check with false names & addresses; however, the account information remains the same, leaving the criminal access to a valid account.

Alteration or check washing, primarily refers to using chemicals or solvents to remove or change the handwriting on the check.  With the advancement of computer technology, check washing is rarely seen anymore due to the fact that computers make it so easy to reproduce a legitimate looking check.

Passing a worthless document refers to someone intentionally passing a check at a business or financial institution knowing that the account is closed at the time of passage.  It also refers to a check being passed at a business or financial institution knowing that there is not and will not be any money in that account to cover the check at the time it is passed.

Check Kiting is when a person opens accounts at two or more financial institutions & begins writing checks from one account to another in order to create fraudulent balances.  Due to Check 21, a new law that went into effect in October 2003, there is no longer “the float time” allowed for a check to post to an account which makes it harder for someone to kite between two or more accounts.  The funds are no longer readily available as the checks are now clearing at the financial institutions quickly.  Banks are making it harder for criminals to kite checks thanks to Check 21!

It has been estimated that the annual losses due to check fraud are in the billions of dollars & continue to grow steadily as criminals continue to seek ways to earn a living by defrauding others.  For the consumer, the amount of time spent clearing their name & cleaning up the mess left behind by the criminal can be considerable.  We must begin protecting ourselves by keeping a close eye on who receives our checks for payments & where we are storing our personal information. 

If you feel your checks may have been stolen or your account(s) have been compromised, contact the Visalia Police Department at (559) 713-4257 to file police report.  You may also contact any one of the following check verification companies to ensure they are not allowing your account information to post at any store or bank:

  • Check Rite:                        (800) 766-2748
  • Chex Systems:                   (800) 428-9623
  • CrossCheck Inc.:                (707) 586-0551
  • Equifax:                            (800) 437-5120
  • National Processing Co.:     (800) 526-5380
  • Shared Check Authorization Network (SCAN): (800) 927-0188

Remember to put stop payments on any outstanding checks that you are unsure of.  Cancel your checking & possibly your savings accounts & obtain new account numbers.  Give the bank a secret password for your account (not your mother’s maiden name or your birth date) to ensure personal access.

Always shred old financial documents instead of throwing them away & keep your personal identifying information out of reach & view of others.  Personal identifying information can be your name, address, birth date, social security number, driver’s license number, bank account number(s), credit card number(s), etc.

Should you become a victim of check fraud, do not hesitate to contact the credit bureaus (Equifax, Trans Union and Experian) so that a fraud alert can be placed on your credit report. 

If you know of someone committing a crime involving check fraud, call our Check Fraud Hotline at (559) 713-4179.

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