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6 common but illegal money habits that can get you in big trouble

6 money habits that are illegal
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6 money habits that are illegal © iStock

6 money habits that are illegal

If you're like most people, you probably couldn't imagine, even if you tried really hard, what it's like to commit a serious financial crime. You know, forgery, counterfeiting, loan fraud -- that kind of thing.

But it can be surprisingly easy to find yourself breaking the law by adopting a dicey financial habit that may seem harmless. You tell yourself, "Everyone does it," "I was just trying to help," or "It seemed like a good idea at the time." The odds of getting caught might seem slim, but the consequences can be harsh.

Here are 6 money habits you should quit now.

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Signing someone else's name on a check

Signing someone else's name on a check © JJ Studio/Shutterstock.com

Signing a check in another person's name is generally considered forgery and would violate the law in most states, warns Carol Kaplan, a former spokeswoman for the American Bankers Association in Washington, D.C.

But suppose an adult child signs an elderly parent's name because the parent is incapacitated, or a parent signs a child's name because the kid is away at college. Guess what? Those signatures are still forgeries, unless a power of attorney is in effect.

"In most cases, it's on behalf of a loved one who probably isn't going to object, but people should know that that's forgery," says Kaplan, who's now with the National Insurance Crime Bureau.


Using someone else's identity to get credit

Using someone else's identity to obtain credit © JohnKwan/Shutterstock.com

Trying to obtain credit through the use of someone else's name and identity is an obvious no-no. But suppose -- and Kaplan says she has heard of such cases -- a parent whose credit has been ruined uses a child's name and identity to open new credit accounts. Is that a problem? You bet.

"It's illegal to pose as someone else," Kaplan says, "but there is also a moral question: Do you want to punish your child and wreck their credit as well?"

You can keep an eye on your credit by getting a credit score for free at myBankrate.


Lying on a home loan application

Lying on a home loan application © iStock

Homebuyers and homeowners who want to refinance may be tempted to inflate their income or hide some debts to improve their chances that a lender will say "yes."

But lying on a loan application is fraud, and lenders do check up on applicants' information, Kaplan says.

"You should always be honest," she says. "We all go through difficult financial periods, and it's tempting to want to fudge. But if you get caught, it's going to lead to huge headaches, and you will sleep better at night knowing that you aren't living with a lie."


Writing bad checks

Writing 'bad' checks © NAN728/Shutterstock.com

Many banks offer overdraft protection that kicks in if you write a check for more than the balance of your account. But writing a check that you know is no good is illegal. The risk isn't negligible: Kaplan says some people do get prosecuted for writing bad checks.

"Not only are there criminal penalties involved, but you get put on a list of bad-check writers," she says. "A lot of places won't accept your checks, and you may have difficulty opening a bank account again because you've been labeled as a fraudster."


Copying US currency

Copying U.S. currency © iStock

Color printers, scanners and copiers make it surprisingly easy for just about anyone to replicate U.S. or foreign currency. But it is, in fact, illegal to print your own money, even if all you want to do is make some play money for the kids.

It's OK to reproduce U.S. currency only if you follow the guidelines established by the U.S. Secret Service, according to Claudia Dickens, a spokeswoman for the U.S. Bureau of Engraving and Printing, part of the U.S. Treasury in Washington, D.C.

"If you make a copy of currency, it has to be at least 150% larger than what you and I carry in our wallets or 75% of its normal size. If you make it in color, you can only do 1 side," she says.


Defacing US currency

Defacing U.S. currency © iStock

Dollar bills and other U.S. currency aren't meant to be run through the clothes washer, written on or chewed up by pets. Yet, while accidental damage to currency normally isn't illegal, deliberately defacing it is.

Federal law prohibits any action that mutilates, cuts, defaces, perforates or glues together U.S. currency or otherwise renders bills unusable.

"It really becomes illegal if you deface it in any way," Dickens says. "When I say, 'deface,' that means you make it unusable. A merchant won't accept it; if it's been glued, it won't fit into a vending machine."

The law doesn't offer specific examples of usability, but common sense should apply.

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