Check Fraud and Check Washing

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A check is defined as a written order on a bank or banker payable on demand to the person named or his order or bearer and drawn by virtue of credits due the drawer from the bank created by money deposited with the bank. (Mallor, Barnes, Bowers & Langvardt, 2013) With that definition, we can conclude that check fraud is the reproducing of legitimate account information by printing false checks or altering original checks by using chemicals. Business and financial institutions alike avoid falling victim to this white collar crime, which remains one of the biggest challenges for them. There are many different types of check fraud, which we will discuss however; we will go into depth on only one.

There are five different types of check fraud that can occur: check kitting, paper hanging, forgery, counterfeiting and alteration. Check kitting is when a person opens an account at two or more institutions and deposits and withdraws during the float time to create a fraudulent balance. Paper hanging is when a person writes a check on a closed account (either theirs or another person’s). Forgery can happen two different ways. The first way forgery can happen is in a business, when an employee, without proper authorization, issues a check. The second way forgery can happen is when somebody steals a check, endorses it and uses false personal identification to present it for payment at a bank. Counterfeiting and alteration are fairly similar and we will go into depth on how each of these takes place. Counterfeiting is when a person uses a photocopier to duplicate a check or fabricates a whole check on a personal computer with sophisticated software and a laser printer. Alteration is when chemicals are used on a check to remove or m...

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...only hear about the different ways that criminals are committing electronic fraud such as hacking in to somebody’s computer and stealing their credit or debit card information. There are also cases where peoples identities have been stolen and whole other lives have been built on them by another person. It all started with check fraud and although it’s not talked about as much anymore, it is still a very large concern for most business owners and people like you and me. The tips that have been provided for us can help protect us from fraud, but it is up to us to take the extra steps to prevent check fraud. We cannot sign up for check fraud protection the same way we could for credit or debit card protection or to help protect ourselves from identity theft. There are processes in place to help us once we’ve experienced check fraud but it is up to us to avoid it.

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