Check fraud may sound like an old problem, but it’s still one of the fastest-growing types of financial fraud. Millions of people still use paper checks to pay bills, send gifts, or make business payments. That’s why it’s important to understand how check fraud happens and how to protect yourself.

What Is Check Fraud and Why Is It Increasing?

Check fraud happens when someone uses a check illegally to steal money or personal information. This can include stealing checks from the mail, creating fake checks, altering legitimate checks, or using scams to convince someone to deposit a fraudulent check.

However, fraud doesn’t only involve paper checks. Scammers may also use electronic checks, mobile deposits, or peer-to-peer payment apps as part of fake check scams. Since checks contain valuable personal and financial information, they remain an attractive target for criminals. 

5 Common Types of Check Fraud

Understanding the most common types of check fraud can help you recognize warning signs earlier and act quickly if something seems wrong.

• Mail Theft
  Criminals target mailboxes for outgoing checks such as rent payments, utility bills, or personal checks. To reduce risk, avoid leaving outgoing checks in unsecured mailboxes overnight, and monitor expected payments closely.
• Check Washing
  This happens when a thief steals a check, removes the ink with chemicals, and rewrites the check with a new payee name or larger amount. Using permanent gel pens and avoiding blank spaces on checks may help reduce the risk of alteration.
• Counterfeit Checks
  Criminals use stolen bank account information to create fake checks that appear legitimate. These checks may be used to make purchases, withdraw cash, or scam others.
• Fake Check Scams
  Scammers may send a fake check and ask you to deposit it before sending money back. Although the funds may initially appear in your account, the check can later bounce. This leaves you responsible for the lost money.
• Forged Checks
  This happens when someone signs or alters a check without the account holder’s permission, often using stolen checks or personal information.

Simple Ways to Monitor Your Accounts

Check fraud is not obvious right away. The best way to catch fraud early is to make account monitoring a regular habit, including: 

• Set Up Account Alerts – Alerts for withdrawals, deposits, checks clearing, low balances, and large transactions can help you spot suspicious activity quickly. 

• Review Your Account Weekly – Look for payments you don’t recognize, checks clearing for the wrong amount, or missing expected transactions. 

• Check Your Cleared Check Images – This can help spot altered or forged checks. Look for the correct payee, correct amount, and your actual signature. 

• Keep a Record of Checks You Send – Tracking makes it easier to compare later. Record the date you sent the payment, the amount, and the recipient’s information. 

• Be Careful with Unexpected Checks – If you receive a check you were not expecting, ask questions first. Unexpected money is often a warning sign. 

What to Do if You’re a Victim of Check Fraud

Finding out you’ve been a victim of check fraud can feel overwhelming. But acting quickly matters! Here are the steps to take:

Step 1: Contact Your Financial Institution Immediately

Tell them what happened, which transaction looks suspicious, and when you noticed it. Your financial institution may be able to place a stop payment, freeze your account, or provide information needed to file a report with the authorities. 

Step 2: Monitor Your Account

Fraud may not stop at one transaction. Continue watching for unfamiliar account activity, unexpected bills, collection notices, or new account openings.

Step 3: Document Everything

Keep records of suspicious transactions, check numbers, fraud reports, and all related communications (including calls, emails, or text messages). Write down dates, names, and case numbers. 

Step 4: File a Fraud Report

Ask your financial institution what reports they recommend. Reporting to local authorities or other agencies can be especially important if mail was stolen, identity theft is involved, or a scammer targeted you online. 

Step 5: Secure Your Account 

You may need to change online banking passwords or update your PINs. If physical checks were stolen, do not continue using compromised check numbers. Report the missing check numbers and order new ones.  

Final Takeaway

Check fraud is growing, but knowledge and simple habits can help reduce your risk. If you ever have questions or suspect chcek fraud, our team at Coastline Federal Credit Union is here to help!