Five types of check fraud

On Behalf of | Jan 27, 2023 | Criminal Defense

Even though check use is declining due to faster payment methods like debit cards, credit cards and payment transfer apps, many individuals and companies still write and accept checks. With that said, some people take advantage of checks by using them for check fraud.

About 70% of organizations experienced high rates of check fraud. It made them lose over $18 billion. Below are five examples of check fraud schemes.

1. Identity check theft

A person is guilty of identity check theft when they steal an individual’s social security number or another identifier. Then, they use the information to open a bank account and write checks under the victim’s name.

2. Check forgery

This can happen in two ways: an individual either steals a blank check and forges someone else’s name to purchase goods or services. Or, they pilfer a check from mail transit, erase everything except the signature and replace the payee’s name with their own.

3. Paperhanging

Paperhanging is when someone writes bad checks from their accounts on purpose. This usually occurs with new (mostly unfunded) or closed bank accounts.

4. Chemical alteration

Sometimes known as check washing, many unscrupulous individuals use chemicals to remove information from a check, then replace it with new credentials. Chemical alteration is popular with scam artists because it enables them to edit the amount and write a check out to themselves or someone else.

5. Check kiting

Check kiting entails using two (or possibly more) different bank accounts. The owner of the bank accounts writes a bad check from the first account, then deposits it to the second account. Later on, they withdraw from the second account without getting caught.

If you or someone close to you is currently facing a check fraud charge, it helps to reach out to experienced legal guidance for assistance. 


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