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What You Need to Know About Check Fraud

Updated on October 29, 2019
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Stephanie Gordon currently works as the Content Marketing Strategist for Arizona Criminal Law Team. She enjoys reading and trail running.

While check fraud does not get as much media attention as credit card and tax fraud, it's a common financial crime affecting individuals and businesses in the United States. People may be writing fewer and fewer checks as other forms of non-cash payments become widely popular, but checks are still among the most targeted payment methods for fraud.

With Americans writing billions of dollars in checks each year, there remains plenty of opportunities for this type of financial crime. There are instances, however, when people unknowingly commit what can be considered as check fraud. In which case, they’ll need a criminal defense attorney to represent them in court.

What is Check Fraud?

Check fraud is a financial crime involving the illegal use of checks. It's when a person performs a financial transaction – pays for a purchase, opens an account, or borrows money – fully aware that he or she is using a fake, stolen, or altered check.

Many people wonder why check fraud continues to be a significant crime in modern times. While the ways and means to counter financial fraud has improved by leaps and bounds, technology has also made it easier for fraudsters to commit mobile-based check fraud or produce excellent copies of checks that often go undetected. They have access to the same tools that consumers and businesses use to create legitimate checks for payments.

Check fraud is an offense punishable as either a misdemeanor or a felony. The gravity of the punishment typically depends on the details of the crime, the amount of money and type of victims involved, and the state where the check fraud occurred.

Here are the most common types of check fraud:

Forgery

For businesses, check forgery usually happens when an employee issues a check without the consent of authorized entities. There are also cases where fraudsters steal and endorse a check, and then present it for payment at the bank or in an establishment using fake personal identification.

Paperhanging

Paperhanging occurs when a person purposely writes or reorders a check under a closed account. The account could be their own or belonging to another entity.

Counterfeiting and Check Alteration

Counterfeiting a check could mean fabricating a whole check using sophisticated tools or merely duplicating an existing check with advanced, colored copy machines. Alteration, on the other hand, refers to the use of chemicals and solvents to remove or change information on the check.

When the modifications are made on specific areas – the payee’s name or the amount, for example, it is called spot-alteration. However, when there's an attempt to erase and change information on a check entirely, the act is considered as check washing.

Check Kiting

Check kiting is when a person opens an account at two or more institutions and takes advantage of the float time to create fraudulent balances using non-existent funds. This type of check fraud has become easier nowadays as banks feel the need to make funds available to accounts sooner.

Unbeknownst to many, incidents of check fraud continue to rise and are estimated to cause billions of dollars of losses annually. Most victims of check fraud encounter great inconveniences while trying to resolve the problem, and may even face considerable repercussions with credit bureaus.

Are You A Victim of Check Fraud?

If you think you have been a victim of check fraud, contact your bank immediately and then your local police department thereafter so they can begin a fraud investigation. Check fraud often leads to severe financial consequences and stress. You need to act as soon as possible to control the damage.

As the victim, you can file criminal charges against the person who committed the fraud. You may also sue in civil court to claim for financial damages.

What If You’ve Been Accused of Check Fraud?

Check fraud falls under forgery crimes, which are considered as wobbler offenses. In these cases, the prosecution can choose to file felony or misdemeanor charges on the accused based on factors such as the value of the forged check and the criminal history of the defendant.

You may be able to overcome the check fraud charges against you, however, if you and your criminal defense attorney can assert in court that:

  • The incident was unpremeditated. You have no intent to defraud.
  • There was consent. You were permitted to make alterations to the check.
  • It was a case of mistaken identity. You are a victim of fraud yourself.

These are but some of the strategies that your lawyer can use to take control of your case. Your attorney will determine the best way to handle the charges against you based on your situation.

When accused of check fraud, especially on felony level, find an experienced check fraud defense attorney in your area ASAP! The criminal court and the local judicial system are both complicated and require in-depth knowledge of the law. You'll need a competent criminal lawyer by your side to help you better understand your rights and establish the best possible defenses.

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