Check Fraud

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What Is Check Fraud?

The criminal act involving unlawful usage of bank checks it illegally obtain or borrow money that doesn't truly exist in the account. Check fraud is one of the biggest challenges businesses and financial institutions face today. With modern technology and the internet it has become easier for criminals to alter checks and checking accounts for deception.

Types Of Check Fraud

Check fraud can occur in many different ways, here are some examples of check fraud:

Check Fraud By Means Of Check Forgery

Businesses typically experience check fraud by means of an employee issuing a check or checks without any authorization. Check forgery can also occur when someone steals a check, endorses it and presents it for payment, usually using false personal identification.

Check Fraud By Means Of Check Kiting

Check kiting is the illegal act of opening a checking accounts at multiple financial institutions and taking advantage of the 'float time' of available funds to create false balances. Checks are then written for amounts greater than the balance in the account. Then a check is written to cover those fraudulent checks from the other account, also with insufficient funds, this second check serves to cover the non-existent funds in the first account. The intention of check kiting is to fraudulently create funds of a checking account balance.

Check Fraud By Means Of Forgery

Check forgery is the act of illegally making or altering a check with the intention of fraud or deceit. This can occur in businesses when an employee issues a check without proper authorization, when someone steals a check, endorses it to themselves then cashes it at a bank or retail store, typically using false identification.

Check Fraud By Means Of Counterfeiting

Counterfeiting is when someone completely fabricates a check or duplicates a check. Check counterfeiting can be done using computer desktop publishing software, with high end color photocopiers or a printing press.

Check Fraud By Means Of Paper Hanging

Paper Hanging is when someone either intentially writes checks closed accounts or ordering checks on closed accounts. Paper hanging check fraud can be done either on their criminals checking account(s) or one that belonged to others.

Check Fraud By Means Of Alteration

Check alteration is done using chemicals or solvents to modify and / or modify information or handwriting on a check. This can be done to chance routing numbers, the name who the check is written out to or the amount of the check. depending on where the check has been altered, for instance on the payee's name or the amount, it is refered to as spot alteration. When all the information is erased it is refered to as check washing.

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