How do scammers get away with cheque fraud?

Cheque fraud is a common financial scam which usually begins with a criminal stealing an original blank cheque then filling it in and trying to pass it off as legitimate. However, as technology like cheque imaging becomes more advanced, scammers are having to think of more innovative ways to get away with cheque fraud.

Below are some of the most common ways that scammers commit cheque fraud:

Cheque kiting

Cheque kiting is a kind of cheque fraud in which the scammer takes advantage of the float (i.e. the duplicate money present in the banking system in the interim period between a deposit being made and the money being deducted from a sender’s account). The scheme typically involves several accounts at different banks and involves a bank depositing accessible money into an account while waiting for cash to be processed from an account at another bank. In actual fact, the other account holds no money at all.

Cheque forgery

A forged cheque is a cheque on which the drawer’s signature has been forged or is unauthorised. The cheque is then presented for payment at a retail store or deposited for cash. Often the cheques are legitimate and have been stolen from an individual or business. There are also cases of completely false cheques in which a scammer tries to pass off a cheque that they have created themselves and that are linked to a non-existent account. These counterfeit cheques can be created using laser printers or duplicated with advanced colour photocopiers.

Altered cheques

Genuine cheques can also be fraudulently altered when a scammer alters the recipient’s name or the amount on the cheque. This can be done by a thief who uses chemicals to break down the writing on a cheque to alter the information, similar to a process known as cheque washing in which details are erased in order for cheques to be rewritten.

At Hague, we are experts in preventing cheque fraud and provide secure cheque printing for the world’s leading banks, financial organisations and corporate users in the UK and around the world. Our end-to-end service reduces costs associated with cheque printing and improves the efficiency of your cheque use.

Enquire now to speak to a member of our team who can offer you advice for protecting your business from cheque fraud.