Despite the rise of digital banking, check fraud remains a prevalent financial scam. Scammers use sophisticated techniques to steal and manipulate checks, often leaving victims unaware until it’s too late. Understanding how check fraud works and how to recognize suspicious activity can help protect your finances.

What is Check Fraud?

Check fraud occurs when criminals manipulate, forge, or steal checks to illegally access funds.

Common Types of Check Fraud

• Check Washing: Thieves steal legitimate checks — often from mailboxes, and modify key details, such as the recipient’s name or the payment amount, before cashing or selling them.
• Check Kiting: Using multiple accounts to write and deposit bad checks, temporarily covering insufficient funds before withdrawing cash.
• Forgery: Criminals create counterfeit checks or forge signatures to access funds fraudulently.
• Fake Checks: Scammers trick victims into depositing fraudulent checks, often under the guise of prize winnings, job opportunities, or overpayment schemes. Once the check is cashed, the fraudster requests the money be sent back, leaving the victim responsible when the check bounces.

How to Recognize Check Fraud

Recognizing fraudulent checks early can help you avoid financial loss. Be on the lookout for these red flags:

• Unexpected Checks: If you receive a check from an unknown source, verify its legitimacy before depositing it.
• Spelling and Formatting Errors: Poor grammar, misspelled words, or inconsistent fonts can indicate a counterfeit check.
• Unusual Check Amounts: If the check amount exceeds what was agreed upon, it may be a scam.
• Discrepancies in Mailing Address: If the check was mailed from a different location than the issuing bank, proceed with caution.
• Request for Money Transfers: Be wary if someone asks you to deposit a check and send a portion of the money back. This is a common scam tactic.
• Lack of Security Features: Legitimate checks include watermarks and security threading. If these features appear altered or missing, the check may be fraudulent.

How to Prevent Check Fraud

While fraudsters are persistent, there are steps you can take to reduce your risk:

• Use Secure Payment Methods: Opt for electronic payments, online bill pay, or peer-to-peer payment apps (Zelle, Venmo, etc.) instead of checks when possible.
• Write Checks with a Fraud-Resistant Pen: Gel pens with permanent ink can make it harder for criminals to alter check details.
• Check Your Mail Frequently: Avoid leaving checks in your mailbox where they can be stolen and deposit them directly inside a bank or electronically right away.
  • If you deposit electronically, keep the check in a secure place and shred it once it clears.
• Enroll in Informed Delivery: The U.S. Postal Service offers a free service that notifies you of incoming mail, helping you detect missing mail sooner.
• Monitor Your Bank Statements: Regularly check your accounts for unauthorized transactions and report suspicious activity immediately.
• Verify the Issuing Bank: If you receive a check from an unfamiliar source, call the bank listed on the check using the contact information from their official website.

What to Do If You’re a Victim of Check Fraud

If you suspect check fraud, take immediate action to minimize financial loss:

• Notify Your Bank: Report the fraudulent activity and request a hold on your account if necessary.
• File a Police Report: Document the fraud with your local law enforcement agency.
• Report to Federal Agencies: The FTC, U.S. Postal Inspection Service, and the FBI’s Internet Crime Complaint Center accept reports of financial scams.
• Monitor Your Credit: Fraudsters who steal checks may also attempt identity theft. Consider using credit monitoring tools to detect future unauthorized activity.

Stay Protected with First Financial

Check fraud can happen to anyone, but awareness and preventative measures can keep your finances secure. By staying vigilant and following these best practices, you can reduce your risk of falling victim to check scams. If you suspect fraud or unusual transactions on any of your First Financial accounts, call us at 732.312.1500 or visit your local branch today.