While credit cards and digital payments are becoming more popular, paper checks continue to be a common payment method for many consumers and businesses. However, with a rise in check fraud attempts, it’s important to be alert when accepting or choosing to pay with a paper check.
According to the American Bankers Association, attempted check fraud at U.S. banks totaled $15 billion in 2018. Before depositing a check you weren’t expecting or mailing a check to an unknown recipient, here are some things you should know:
There are three main types of check fraud. This includes:
- Forged checks: This type of check fraud involves an unauthorized person forging the signature of the account holder. Fraudsters may steal checks or obtain the necessary information to replicate the account holder's signature.
- Altered checks: Check alteration involves modifying key details on a legitimate check, such as the payee's name, the amount, or the date. Fraudsters may use chemicals or solvents to erase or modify the ink on the check and then rewrite the altered information.
- Counterfeit checks: Counterfeit checks are fabricated imitations of genuine checks, often created using high-quality printers or software. Fraudsters may mimic the design and details of legitimate checks to deceive individuals and businesses into accepting them.
Now that you know the three main types of check fraud, it’s important to know how to prevent these attempts. Here are seven ways to protect yourself:
- Make sure the check was issued by a legitimate bank.
- Look at the check to see which bank name or logo appears on it. Is it the name of a legitimate bank? A fake name is a sure giveaway of a fraudulent attempt.
- Check with the bank that supposedly issued the check to make sure it is real.
- Contact the issuing bank to ensure the check is valid and that there are funds to cover that amount. Be sure to visit the bank’s official website to get their phone number. Don’t use the number listed on the check as this could be a fake number.
- Consider how and why you received the check.
- If you unexpectedly received a check from someone you don’t know, use caution. Some scammers may attempt to contact you through text message, email, or a phone call before or after receiving the check.
- Look where the check was mailed from.
- Does the address listed on the check match the city and state of the issuing bank? Go to the bank’s official website and cross check with the information on their website. If the address is absent or a P.O. Box, proceed with caution.
- Determine if the amount of the check is correct and as expected.
- If someone overpays you by check and they ask for the extra money back, it’s probably a scam. Don’t accept checks for more than the agreed-on purchase price. It could be an overpayment scam.
- Official checks usually contain watermarks, security threads, color-changing ink and other security features.
- Examine official checks for these security features. While scammers can still replicate some of these features, there will be some inconsistencies with the quality.
- Keep an eye out for missing mail.
- Fraudsters target mailboxes in search of bank or credit card statements, new checkbooks, or other documents containing your financial information. Consider enrolling in eStatements to reduce the chances of a paper statement being stolen. Also, don’t mail bills or other mail containing paper checks from your own mailbox with the flag up.
If you think you’ve been targeted by a counterfeit check scam, report it immediately to any of the following agencies:
- The U.S. Postal Inspection Service at www.uspis.gov (if you received the check in the mail).
- Your state or local consumer protection agencies. Visit NAAG (www.naag.org) for a list of state Attorneys General.
- For possible online crimes involving counterfeit checks and money orders, file an online complaint with the Internet Crime Complaint Center (www.ic3.gov) (a joint project of the FBI and National White Collar Crime Center).
- In addition to notifying the bank whose name is on the check, you can notify the website or online service where you encountered the scammer (for example, the online auction website or job posting website), so they can block them from utilizing their services in the future.
For more help or information, go to FDIC.gov or call the FDIC toll-free at 1-877-ASK-FDIC (1-877-275-3342).