Check Fraud

The most common type of fraud for an individual is check fraud. Check fraud is common because once the check is issued, the issuer cannot account for its whereabouts until it is presented for payment. Using only an account number and a bank routing number from a check, a fraudster can create counterfeit checks, make online purchases, or electronically debit the account number listed on the check, for any amount.

Examples of Check Fraud
There are many examples of check fraud including:

A stolen check is altered (payee name and amount changed and then cashed)
A "replacement check" is requested after the original check has been redeemed.
A payroll check is "bought" from employee by fraudster using a fake check.
Stolen account data is used to create fraudulent checks. Internal fraud (i.e. embezzlement).

Lower Your Risk
In order to reduce your risk of fraud, there are steps you can take including:

Use checks with security features such as a watermark.
Review account activity at least once a day.
Reconcile accounts promptly; access bank statements electronically as soon as possible as a reconciliation cycle ends.
Research "lost checks" before reissuing.
Secure unused check stock and outgoing mail.

Perhaps the best protection against stolen or counterfeit check fraud is a system such as Positive Pay. This is a system that allows your bank to immediately electronically compare checks presented for payment to your corporate check records. This system has thwarted millions of dollars in check fraud.

rhopkins@batescarter.com
770.532.9131

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Fraud Specialists
The professionals at BatesCarter specialize in a number of accounting services including fraud. Preventing fraud is a topic that often discussed at BatesCarter. For more information on fraud or to learn more about BatesCarter as an accounting firm in Gainesville, Georgia, contact us today.

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