Checks have been used for generations as a convenient way to make payments, but unfortunately, check fraud has existed almost as long as checks themselves.

Today, criminals continue to find new ways to use fake, stolen or altered checks to trick individuals and businesses. Fraudsters often rely on convincing stories, a sense of urgency or promises that sound too good to be true.

Understanding common check fraud scams and knowing what warning signs to look for can help you protect your money and personal information.

Common Types of Check Fraud

Fake Check Scams

One of the most common check fraud schemes involves scammers sending counterfeit checks and convincing victims to deposit them. They may ask you to send money back, make a payment, purchase items or transfer funds before the check is identified as fraudulent.

Even if the funds appear in your account, the check may later be returned, leaving you responsible for the amount withdrawn.

Check Washing

Check washing occurs when criminals alter a legitimate check by removing information, such as the payee name or dollar amount, and rewriting the check to redirect the funds to themselves.

Scammers often target checks stolen from mailboxes or outgoing mail.

Counterfeit Checks

Fraudsters may create fake checks that appear to come from legitimate businesses, organizations or financial institutions. These checks are designed to look authentic but are not issued by a real account holder.

Overpayment Scams

In an overpayment scam, a fraudster sends a check for more than the amount owed and asks you to send back the difference.

Common examples include fake job opportunities, mystery shopper scams, online purchases or sweepstakes winnings. The original check is fraudulent, but any money you send back is your loss.

Mobile Deposit Scams

Scammers may use mobile deposit to submit fraudulent checks and then pressure victims to send money or make purchases before the check is discovered.

Always be cautious when someone you do not know asks you to deposit a check and quickly send funds elsewhere.

Stolen Checks

Criminals may steal checks from mailboxes, businesses or other locations and use them without the account holder’s permission.

Review your account activity regularly and report any unfamiliar transactions as soon as possible.

Account Information Fraud

Fraudsters may obtain account information through stolen checks, data breaches or other methods and use that information to create fraudulent checks or attempt unauthorized transactions.

Warning Signs of a Check Scam

Be cautious if someone:

• Sends you a check unexpectedly and asks you to send money back.
• Tells you to act quickly before the check clears.
• Sends a check for more than you are owed.
• Requests payment through unusual methods after you deposit a check.
• Claims you won a prize, received a job offer or need to pay a fee using a check.
• Asks you to deposit a check on behalf of someone else.

 

How Can You Help Protect Yourself?

You can take simple steps to help reduce your risk of becoming a victim of check fraud:

• Do not deposit checks from people or organizations you do not know or trust.
• Never send money back based on a check until you know the funds are legitimate.
• Avoid sharing account information or personal details in response to unexpected requests.
• Review your account activity regularly and report suspicious transactions immediately.
• Consider using secure electronic payment methods when available.
• When mailing checks, use secure methods and avoid leaving outgoing mail in unsecured locations.

Remember: A check showing as deposited does not always mean the payment is final. A fraudulent check can be returned after the funds appear available.

Business Customers: Help Protect Your Business with Positive Pay

Businesses face unique risks when it comes to check fraud. Parke Bank offers Positive Pay, a fraud prevention service designed to help businesses detect potentially fraudulent checks before they are paid.

With Positive Pay, businesses provide a list of issued checks to the bank. When checks are presented for payment, they are compared against that information to identify potential discrepancies, including:

• Incorrect check numbers
• Incorrect dollar amounts
• Payee name mismatches

If something does not match, the business can review the item and determine whether it should be paid.

Positive Pay is one way businesses can take a proactive approach to protecting their accounts from check fraud.

Stay Alert. Stay Protected.

Fraudsters are constantly changing their tactics, but staying informed is one of the best ways to help protect yourself.

If you receive a suspicious check or believe you may be the target of fraud, contact Parke Bank before taking action.