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What Is Check Fraud?

Check fraud refers to various criminal acts that involve making unlawful changes to or uses of checks to illegally acquire funds. Check fraud has become one of the most difficult obstacles for people, businesses, and financial institutions to overcome. What’s worse is that the threats of check fraud have increased and will continue to do so – all because the year is 2020.

Why? There are multiple areas of a check that are subject to fraud, but the most important focus for this year is the date. Multiple law enforcement agencies are warning consumers to include the full year – 2020 – when they are writing a check (and on all official documents) because fraudsters are able to quickly and easily manipulate an abbreviated date.

How Do Scammers Do It?

There are two popular ways in which scammers can commit fraud by manipulating the date:

  1. Freshening a stale check. If a criminal were to find a check written with a two-digit year that has never been sent, deposited, cashed, or voided, they could potentially cash the check fraudulently by adding numbers to the end of the year to make it seem like the check was never forgotten about. For example, a fraudster could add “21” to the end of “20” in the date on your old check and cash it out in the year 2021.
  2. Changing the date on a contract. If a credit contract was signed with a two-digit year and even a single payment was missed, the vendor could discretely add numbers to the end of the year on the contract and claim that you owe them payments for longer than you actually do. For example, a vendor could add “15” to the end of the “20” in the date on your contract and make it appear as though you’ve missed payments for 5 years.

Preventing Check Fraud

When it comes to check fraud protection in 2020, specifically check-date fraud, the biggest piece of advice that our team of experts can offer is to write out the full month, date, and year when filling out a check. Taking the extra time to make sure your check is complete can save you weeks, months, or even years of frustration, stress, and financial damage.

In addition to our check-date recommendation, we’ve outlined a variety of general check fraud prevention steps that you can and should follow to maintain a healthy and successful financial status:

  1. Never give your account number to people you don’t know. Your account number is a gateway to your personal information, and if in the wrong hands, could lead to theft.
  2. Store your checks in a secure and locked location. Like anything else that is valuable in your home or personal space, checks should always be stored in a safe and secure location.
  3. Make sure your checks are endorsed by your financial institution. Endorsed checks are easier to track and are flagged by your bank when there is any kind of activity, making it quicker for you to identify fraud.
  4. Monitor your accounts and review your bank statements each month to detect suspicious activity. Closely monitoring your accounts with online and mobile banking helps detect fraud in a timely manner. Looking at your monthly statements gives you a reminder of where your financial situation stands.
  5. Unless needed for tax purposes, destroy any old or voided checks. With how easy it is to forget about old checks, we recommend using a paper shredder to destroy them as soon as they are no longer needed.
  6. Don’t write your credit card number on a check. As mentioned above, giving out your account information makes you more susceptible to fraud, and exposing credit card numbers can do the same.
  7. Consider the type of pen you use to write checks. Studies have shown that most ballpoint or marker inks can be washed from a check, whereas gel ink gets trapped in paper and is more difficult to wash away.
  8. Don’t make a check payable to cash. If the check gets lost or stolen, it can then be cashed by anyone.
  9. Don’t mail bills from your mailbox at night. Nighttime is when criminal activity is most common and, without help from the sunlight, these criminals can remain anonymous.
  10. Limit the amount of personal information that’s listed on your checks. Personal information on a check can be used to steal your identity, which could then lead to financial theft.

Good financial habits can positively impact and protect you from fraud and theft, and this includes writing the full year – 2020 – on your checks and financial documents. If you have any questions or concerns about your current or future financial situation or you’ve been a victim of check fraud, contact the professionals at National Exchange Bank & Trust.

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