Ways to Detect Check Fraud

There is no sure-fire way to detect every single check forgery, but there are many red flags to be on the watch for to limit the potential of a forged check. A forgery occurs when the information on a check has been created or altered without the necessary authorization.

So the most obvious way of detecting a forgery is to look for any signs of erasures or alterations. These may include white spots on the check, or the use of different colored inks, and even the change in handwriting on the check.

A check may, however, have been stolen and all the information on the check may be written by a single person- someone not authorized on the account. Detecting this kind of forgery is much more difficult. If you are someone accepting checks the best thing to do at this point is to always take proper identification when accepting a check.

Accepting proper identification will allow you to take a few steps towards confirming that the check is legitimate. Does the name on the ID match the name on the check? Does the signature match? Is this the person standing in front of you?

The majority of check fraud cases occur on accounts that are less than one year old. Is the check you are being presented with a low number? Personal checks usually start with 100, business checks with 1000. In recent times however, banks have moved away from starting all checks this way, so this is not as effective an indicator as it once was, but it is still effective in some cases.

A MICR line should always be present on a check. This is that line on the bottom of the check. It should be in a dull ink that is not the same as the rest of the ink on the check. The third, and last, series of numbers on the MICR line should be the check number. Verify that it matches what is on the check. If there is no MICR line on the check the check is no good. Do not accept it.

A quick scan of the check to make sure that it has not be visibly altered and checking identification are the first, and best, lines of defense against check fraud. With the advancement in personal technology this is a growing crime that costs consumers millions and can lead to identity theft. Check fraud is serious, and it is important that anyone accepting checks be able to identify and stop it.