Cheque Fraud

Cheques rely heavily on paper, signatures and trust, so they are easy to attack. Thieves steal them from the post and wash off the payee name or amount with chemicals before rewriting them. Others forge the account holder's signature, print counterfeit cheques from copied account numbers, or deposit a cheque they know will be returned and withdraw the funds first. Cheque kiting is a related trick that exploits the delay in clearing by moving cheques between accounts. Banks counter it with signature and image checks, positive pay matching of issued cheques against the payer's list, holds on large deposits, and limits on withdrawing uncleared funds. Paper cheques linger in business payments, which keeps a steady supply of targets for forgers.

A small business mails a cheque for 5,000 to a supplier. A thief takes it from the post box, removes the payee name with solvent and writes in a different name. The thief deposits it at another bank. The paying bank's image check notices the altered ink and the mismatch with the business's positive pay file, and returns the cheque before the money is released.