How to protect yourself from check fraud

The black market for your identity
By Jean Chatzky

While mobile banking continues to rise, check fraud -- you remember paper checks, don't you? -- remains a big problem. One estimate found more than $13 billion in actual and attempted check fraud in 2015.

And fraudsters aren't likely to move on for some time. A report from Bluepoint Solutions, which provides check-processing and document-imaging technology and services for financial institutions, suggests checks will remain a popular target because "counterfeiters are still counterfeiting, kiters are hard at work, identity thieves are thriving and more than 90% of all banks still deal with check fraud losses."

“Whenever dealing with checks of any kind, trust your gut.”

"With technology advancements, criminals today can defraud you as a consumer … easily with a blank check stolen from your checkbook, a previously paid or canceled check found in your garbage, or a check you have placed in your mailbox to pay a bill," says Karen Taylor, senior product manager for financial and risk management solutions at Fiserv, a technology provider for the financial services industry.

Annual fraud losses by payment type | Bankrate

Source: 2013 Federal Reserve Payments Study

Here are some things you can do to keep check fraud in check:

  • Store your blank checks, bank statements and canceled checks in a secure place, such as a locked safe, Taylor says. Taking this step leaves you much less likely to be targeted by check fraudsters, says Josh Sheehan, vice president of sales at Advanced Fraud Solutions, a provider of anti-fraud technology and services.
  • Keep track of checks you've ordered from your bank or credit union. If the checks haven't shown up in a reasonable amount of time, notify your financial institution, the Better Business Bureau recommends.
  • Report missing checks immediately to your bank or credit union, Taylor says.
  • If you no longer need them, destroy old canceled checks, bank account statements and ATM receipts, Taylor says.
  • Consider having your mail sent to a post office box, particularly if you aren't able to check your mail regularly, Sheehan says. If you have mail sent to your home, be sure to check your mailbox frequently so that sensitive financial documents, including checks, don't become targets for thieves.
Signing a check | bluestocking/E+/Getty Images

bluestocking/E+/Getty Images

Personal checks aren't the only check-fraud threat you should worry about, though. Fake-check scams also are a concern.

According to the Consumer Federation of America, fake-check scams involve someone giving you a check or money order that looks real and, in return, asking you to wire money somewhere. A victim doesn't realize it's phony until it's been deposited or cashed. Someone hoodwinked in one of these scams typically loses $3,000 to $4,000, the consumer group says.

Here are a couple of common fake-check scams to avoid.

Lottery winner scams

If you receive a check in the mail and it's supposedly a payment for lottery winnings but you didn't buy any lottery tickets, take the item to your bank, Sheehan says. Chances are, it's a scam. The bank can advise you about your options.

"The lottery angle is a trick to get you to wire money to someone you don't know. If you were to deposit the check and wire the money, your bank would soon learn that the check was a fake," the Federal Trade Commission says.

Overpayment scams

These scams target consumers selling cars or other valuable items through Craigslist, auction websites or other online platforms, according to the FTC. Unsuspecting sellers get stuck when scammers pass off fake cashier's checks, corporate checks or personal checks, the commission says.

"If you're selling something, don't accept a check for more than the selling price, no matter how tempting the offer or how convincing the story. Ask the buyer to write the check for the correct amount," the FTC advises.

Whenever dealing with checks of any kind, trust your gut, Sheehan says.

"People are generally hopeful and want to believe the best, even when their better judgment tells them not to," he says. "Retain a level of skepticism and be aware of suspicious activity."


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