Cheque fraud

What is it?

There are five common types of cheque fraud:

Counterfeit cheque fraud - Counterfeit cheques are manufactured or printed on non-bank paper to look exactly like genuine cheques and are drawn by a fraudster on genuine accounts held by the bank.

Forged cheque fraud - A forged cheque is a genuine cheque that has been stolen from an innocent customer and used by the fraudster with a forged signature.

Fraudulently altered cheques - A fraudulently altered cheque is a genuine cheque that has been made out by the payer, but a fraudster has altered the cheque in some way before it was paid in, e.g. by altering the beneficiary's name or the amount of the cheque.

Funds not available - This is a genuine cheque; however there are no funds in the account to honour it.

Overpayment - This is where a customer advertises an item for sale in a magazine or internet and the fraudster sends a cheque for more than the item was advertised for. They then ask the difference to be sent back normally by money transfer (e.g. Western Union – global money transfer service). The cheque subsequently bounces and the customer suffers the loss.

How to protect yourself

  • Don’t accept a cheque or banker’s draft/corporate cheque from someone unless you absolutely know and trust them. Be wary when accepting a high-value cheque e.g. if you are selling a car. Consider other payment options e.g. cash.
  • Banker’s draft/corporate cheque is not necessarily safe from fraud. If you receive a banker’s draft/corporate cheque in payment for goods, you should wait until the end of day 6 after paying it in to be certain that the cheque is cleared and the money is in your account before you release the goods. A banker’s draft can be stolen or altered like any other cheque and if it is altered, stolen or counterfeit it will not be honoured.
  • Keep your cheque book in a safe place, report any missing cheques to your bank immediately and always check your bank statement thoroughly.
  • If you are making a cheque payable to a bank/building society or to a credit card company, you must ensure that you provide sufficient details on the payee. Enter the full details for the account holder in the payee line for example XYZ bank, re J Jones, account number xxx. This helps to guard against fraud. It also helps to ensure the money gets to the right account without unnecessary delay.
  • Never pre-sign blank cheques. When writing cheques, be sure to complete all sections, including the payee name, and the amount in both words and figures. To help prevent fraudulent alteration leave as little blank space as possible, if necessary by drawing a line through unused spaces. Include the word `only` after writing the amount in words.

What to do if you have been affected

  If you suspect you have been a victim of Cheque fraud, you should call us immediately on 1800 800 310 during working hours (9am to 5pm, Mon-Fri) and advise us what has happened.