Many people think the days of cheque fraud are long over with. After all, technology is at a point where it’s hard to do anything illegal with a cheque, and banking systems have long upgraded their methods of dealing with cheques. However, cheque fraud still exists and it persists.
These days it seems like it’s much easier for those with ill intent to go for sophisticated credit card theft and debit card spoofing. And indeed, they do that as well, but cheque fraud is still a major criminal activity.
That same advancement in technology is what actually helps cheque fraud to flourish. Advanced printers, and desktop publishing software has allowed for the creation, alteration or manipulation of cheques. As technology attempts to hinder the process, it also facilitates the process as well.
For those that order and deal with cheques on a regular basis, it’s important to understand a little about how people commit cheque fraud.
Methods of cheque fraud
At a basic level, there are only a few ways to commit cheque fraud.
- Altering – This involves changing the information on a legitimate cheque through various means. Since it’s still a real and official cheque, it can pass through where other types may fail. There are various ways to alter a cheque, from simply writing on it to using complex chemical methods. A person attempting to alter a cheque may only attempt to change small specific parts of the cheque, or they may wash the cheque of all information and rewrite what they want in.
- Forgery – This is an old scheme that still works to facilitate cheque fraud. All someone would have to do is get his or her hands on a cheque and sign it. Once signed, they can use it. The only real thing holding a criminal back in the case of a forgery is a lack of identification to go along with a cheque. But there are many places that will accept a cheque without ID, especially online if they use the information from the physical cheque as a digital cheque.
- Counterfeiting – It’s still possible to make fake cheques. Depending on the criminal’s intent, they can even make fake cheques with completely made up information. Or they can use stolen information to create them.
- Bouncing – People will still do nothing more than use a cheque somewhere knowing that it will bounce. While many legitimate account holders may do this for various reasons, it’s still a form of cheque fraud. Criminals can take advantage of it as well. All they would have to do is to write cheques against an account using any cheque fraud methods. If they can find places that will accept the cheques, they can spend as much as they want on goods and services and get away before the cheques bounce.
Cheque fraud and businesses
For a business that deals with cheques, there is a great risk involved when employees or others must handle the cheques and information of others. While banks and retail institution do their best to make sure that fraudulent cheque practices never make it through the gate, businesses also have to take steps to prevent cheque fraud as well.
A lot of cheque fraud can start inside a company, with employees that process a lot of cheques. That’s why it’s important that businesses discourage cheque fraud from within through policies such as instant dismissal or taking legal action.
Business owners should also educate both their employees and client base about the dangers associated with using cheques and suggest some simple cheque fraud prevention techniques such as:
- Keep your cheques under lock and key when you aren’t using them
- Report stolen cheques immediately
- When accepting cheques, ask for ID
- Always compare the signature on the cheque to that on the ID
- Know how to test for security features built into cheques
- Put limits on the amount a cheque can be written for, and
- Use a cheque verification service
