Check Fraud: How to Spot It, Prevent It and Know What to Do | USPS FCU

Check Fraud: How to Spot It, Prevent It and Know What to Do

Check fraud can happen to anyone. A check can be stolen from the mail, altered, forged or used as part of a scam. What may look like a routine payment can sometimes put your money and personal information at risk.

The good news? Knowing what to look for and acting quickly can make a big difference.

Throughout August, U.S. Postal Service Federal Credit Union has been highlighting different aspects of check fraud to help our members recognize the warning signs, protect their accounts and know what to do if something goes wrong.

Here is a look at the four key things every member should know about check fraud.

1. What Is Check Fraud?

Check fraud occurs when someone illegally uses a check to steal money or gain access to financial information. This can happen in several ways, including stealing a legitimate check, altering information on a check, creating a counterfeit check or convincing someone to deposit a fraudulent check.

A stolen check can contain valuable information, including your name, account number and routing number. That means check fraud can potentially put more than a single payment at risk.

How can you protect yourself?

A few simple habits can help reduce your risk:

  • Mail checks securely. Whenever possible, use a secure USPS location rather than leaving outgoing checks in an unsecured mailbox.
  • Monitor your accounts. Review transactions regularly and look for anything you don’t recognize.
  • Be cautious with unexpected checks. Be especially careful if someone sends you a check and asks you to deposit it and send money back.
  • Protect your checks. Store unused checks in a secure location and keep track of the checks you write.
  • Act quickly. If something doesn’t look right, contact your financial institution as soon as possible.

Remember: A check can look legitimate and still be fraudulent.

Want to learn more about how check fraud happens and why it’s becoming an increasing concern?

View the Check Fraud Prevention Guide (Week 1)

2. What Does Check Fraud Actually Look Like?

Check fraud doesn’t always look like fraud at first. Scammers can make fraudulent checks and transactions appear convincing, which is why understanding the most common methods is important.

Here are some examples:

Mail Theft

A legitimate check may be stolen from the mail before it reaches its intended recipient. The information on the check can then be used to create fraudulent transactions.

Check Washing

A legitimate check can be chemically altered to remove information such as the original payee or dollar amount. The check can then be rewritten for a different recipient or amount.

Counterfeit Checks

Scammers can create fake checks that appear legitimate. Some counterfeit checks may even use real financial institution information, making them difficult to recognize at first glance.

Fake Check Scams

You may receive an unexpected check and be instructed to deposit it, then send some of the money back or forward it to someone else. The check may initially appear to clear, only to later be identified as fraudulent.

Forged Checks

Someone may forge your signature or otherwise alter a check without your permission.

The common thread? These scams are designed to make fraudulent activity look like a normal financial transaction.

Knowing these tactics can make it easier to recognize something that doesn’t seem right.

Explore the 5 Common Types of Check Fraud  (Week 2)

3. How Can You Detect Check Fraud Early?

One of the best ways to protect yourself is to catch suspicious activity before it becomes a bigger problem.

Check fraud isn’t always immediately obvious. A payment might take longer than expected to clear, a check could clear for the wrong amount, or you might notice an unfamiliar transaction weeks after it occurred. Regular account monitoring can help you identify these warning signs sooner.

Watch for these warning signs:

A check hasn’t been cashed when expected.
If a payment you mailed hasn’t been processed within the normal timeframe, check with the recipient to confirm whether they received it.

A check clears for the wrong amount.
Compare cleared checks with your records. An incorrect amount could be a sign that a check was altered.

You see a payment you don’t recognize.
An unfamiliar person or business appearing on a transaction could indicate a forged or altered check.

Checks or mail are missing.
Missing checks or unexpected gaps in your mail could be signs of theft.

You notice unusual account activity.
Don’t overlook unfamiliar withdrawals, small test transactions or other activity you don’t recognize.

Make account monitoring a habit

You don’t need to spend hours reviewing your finances. A quick weekly account review can help you catch problems sooner. Consider setting up available account alerts and reviewing cleared check images to confirm the payee, amount and signature are correct.

Keeping a simple record of the checks you send can also make it easier to compare your payments with your account activity.

A few minutes of regular monitoring could help you catch fraud before it grows.

View the Check Fraud Detection Guide (Week 3)

4. What Should You Do If You’re a Victim of Check Fraud?

Discovering that you’ve been the victim of check fraud can be stressful. You may not know where to start or whether the situation can be resolved.

Don’t panic, but don’t wait. Acting quickly is one of the most important things you can do.

Step 1: Contact your financial institution

If you notice a suspicious transaction or believe a check has been compromised, contact your financial institution immediately. Explain what happened, identify the suspicious transaction and provide any information you have.

Depending on the situation, your financial institution may be able to help with actions such as placing a stop payment, freezing an account or investigating the transaction.

Step 2: Review your account

Don’t stop at the transaction you initially noticed. Review recent activity for other unfamiliar checks, withdrawals or account changes. America Saves recommends reviewing at least the previous 30 to 60 days when possible.

Step 3: Document everything

Keep records of suspicious transactions, check numbers and communications related to the fraud. If you file a report, keep copies of the report and any case numbers.

Having this information organized can make the process easier.

Step 4: Report the fraud when appropriate

Depending on how the fraud occurred, you may need to report it to local authorities or other appropriate agencies. If mail was stolen or identity theft may be involved, additional reporting may be necessary. Your financial institution can help you understand what reports may be appropriate.

Step 5: Secure your accounts

If your account information has been compromised, additional security measures may be necessary. This could include changing your online banking password or PIN, reviewing linked payment accounts or, depending on the circumstances, opening a new account.

Step 6: Keep monitoring

Unfortunately, fraud doesn’t always stop with one transaction. Continue reviewing your accounts and watch for signs of additional fraudulent activity or identity theft.

If you deposited a check that later turned out to be fraudulent, contact your financial institution immediately. Even if the funds initially appear in your account, a fraudulent check can later be returned. Be especially cautious if someone asks you to send money back after depositing a check.

View the Check Fraud Action Guide (Week 4)

Stay Alert. Stay Informed. Protect Yourself.

Check fraud can be difficult to spot, but you aren’t powerless against it.

The best defense is a combination of awareness, regular account monitoring and quick action.

Remember these four steps:

1. Know what check fraud is.
Understand how criminals can steal, alter or counterfeit checks.

2. Know what it looks like.
Learn the common scams and tactics used to make fraudulent transactions appear legitimate.

3. Check your accounts regularly.
Look for unfamiliar transactions, missing payments and discrepancies in cleared checks.

4. Act quickly if something seems wrong.
Contact U.S. Postal Service Federal Credit Union as soon as possible if you notice suspicious activity.

We’ve created resources throughout our Check Fraud Awareness campaign to help you recognize the warning signs and know what to do. Take a few minutes to review the guides and keep them available for future reference.

At U.S. Postal Service Federal Credit Union, we’re committed to helping you stay informed, protect your finances and feel confident about your financial security.

Your Check Fraud Resources

Don’t wait until something goes wrong to learn what to do. Stay informed, stay alert and protect what matters most.