Cheque fraud rising: how to protect yourself

Cheque fraud is on the rise. Make sure you're not a victim.

The number of cases of cheque fraud rose to £17.9 million between January and June this year, compared to £16.4 million for the same period in 2011.

One of the main ways criminals use cheques fraudulently is by intercepting them and changing certain details, before paying them into a different account and stealing the cash.

Cheque fraud

The number of cheques in circulation is falling, but there was still a 9% annual rise in this kind of fraud during the first half of the year. People selling high-value items, such as cars, were found to be particularly at risk.

Despite this, the Cheque and Credit Clearing Company said the majority of fraudulent cheques are spotted and that £241 million-worth of fraud attempts were stopped in the same period.

The three main types of cheque fraud are:

• counterfeit fakes printed on non-bank paper to look like genuine cheques
• stolen cheques written out by a fraudster with a forged signature
• those which are altered and then paid into a different account.   

How you can avoid cheque fraud

There are many steps which you can take to avoid cheque fraud.

Firstly, drawing a line through all unused space on the cheque will reduce the risk of a criminal adding in extra details. This includes the space after the payee name, the amount in words, and the amount in figures.

The name of the person you’re paying a cheque to also needs to be written out in full. If you just use initials it’s easier to change and always use a black or blue ballpoint pen which can’t be easily altered.

When sending a cheque by post, if the recipient hasn’t received it within a week, call your bank and ask for the payment to be stopped. Before you post it make sure it can’t be identified as a cheque, for example by covering it in a piece of A4 paper.

It’s generally safer to make payments via alternative methods, especially if you’re paying a large sum. Where possible, an automated payment, such as with a debit or credit card or via Bacs or Faster Payments is a lot safer.

What to do if you’re victim of cheque fraud

If you think you’ve been a victim of cheque fraud it’s important you get in touch with your bank immediately and let it know. Make sure you keep records of all contact between you and the fraudster, and also your financial institution, and try to give it as much detail as possible about the case.

In most cases if you are the innocent victim of fraud and your cheque or cheque book has been stolen and used by someone else, you should be able to get the money back.

However, it’s harder to get your money back if you’ve accepted a fraudulent cheque in return for goods or services. Therefore you need to remain vigilant and only accept cheques from people you know or registered tradespeople.

The rules around cheques mean that once six working days pass from when the cheque is paid in, the money is then yours and you’re protected should the cheque subsequently bounce because it’s fraudulent.

The history of the cheque

Cheque use has been declining rapidly in the past few years as most people now rely on cards or cash to pay for things. In 1990 the use of cheques peaked at four billion whereas in 2011 only 970 million were used.

It’s now the case that many retailers will no longer accept cheques as payment due to the extra cost involved in processing and the risk of fraud.

However, there are some instances, such as with small businesses or when paying tradespeople, where cheques are still used – especially among the older generations.

Back in December 2009 the Payments Council said cheques would be withdrawn from use in 2018. After much criticism this target was then cancelled and it was agreed cheques would continue in use for as long as customers needed them.

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