Security Corner Blog

In a world that’s increasingly dominated by digital payments, paper checks might seem outdated, but they’re far from extinct. Unfortunately, this traditional payment method is still a favorite among fraudsters. Paper check fraud is not only a costly problem for victims, but it’s also costly for financial institutions and businesses.

Here’s what you need to know about paper check fraud, how to identify it, and steps to take to protect yourself from falling victim.

What is a paper check scam?

There are several variations of paper check scams. Here are the most common forms:

• Forged checks. Fraudsters forge the signature of the account holder to write checks in their name.
• Counterfeit checks. Fake checks are created to mimic real ones, complete with fabricated account and routing numbers. Scammers then use these bogus checks to pay for their purchases.
• Altered checks. A legitimate check is stolen and altered to change the payee and/or amount. The scammer then deposits the check and pockets the funds.
• Check washing. Criminals use special chemicals to erase ink on a check, allowing them to rewrite it fraudulently.
• Overpayment scams. Scammers send a fraudulent check for an amount that’s higher than what’s owed, asking the recipient to refund the difference.

How to spot a fraudulent check

Identifying a fake or altered check can be challenging, but there are warning signs to watch for.

1. Unusual payer information. Look for spelling errors, mismatched fonts or incomplete payer details on the check.
2. Inconsistent bank details. Verify that the bank’s name and address are accurate. Call the bank to confirm the account exists if you’re suspicious.
3. Check number discrepancies. Legitimate checks have sequential numbering. A check with a low or no number, or one that doesn’t align with the issuer’s checkbook, can be a red flag.
4. Poor print quality. Genuine checks are printed with high-quality materials and techniques. If the check feels flimsy, has blurry text or looks off in any way, it could be fake.
5. Too good to be true. If you receive an unexpected check, especially for a large amount, be skeptical. Scammers often use this tactic to lure victims.
6. Suspicious sender. A check from an unknown source, especially when it’s accompanied by vague instructions or additional requests, should raise suspicion.

Protect yourself from paper check fraud

Here’s how to stay safe from check scams:

• Verify your check’s authenticity. If you receive a check, especially from an unknown sender, call the issuing credit union or bank to confirm its legitimacy. Use the financial institution’s official contact information instead of relying on what’s printed on the check.
• Secure your mailbox. Use a locking mailbox for incoming mail to prevent theft.
• Never wire money or send gift cards. Scammers frequently ask for these forms of payment because they’re hard to trace. If someone insists, it’s likely a scam.
• Use check safeguards. Use pens containing permanent ink when writing checks. This makes it harder for fraudsters to alter them. It’s also a good idea to avoid leaving blank spaces in payee or amount fields.
• Be wary of overpayments. If someone sends a check for more than the agreed-upon amount, refuse the deal until it’s fully verified.
• Switch to digital payments when possible. While checks are sometimes necessary, online payments through trustworthy services and entities are often safer and faster.

If you’ve been targeted

If you believe you’ve been victimized by a check scam, report the fraudulent activity to your credit union or bank as soon as possible. They can guide you on your next steps and help protect your account. If the fraud involves a forged or altered check from your account, inform the original payee or issuer as well. Next, file a police report, especially if significant financial harm has occurred. This report may be necessary for insurance claims or legal action. You’ll also want to file a complaint with the FTC at reportfraud.ftc.gov. Finally, if your personal information was stolen, monitor your credit for any unusual activity.

Don’t get caught in a paper check scam! Use these tips to stay safe.