Altered checks are a common fraud that occurs after a legitimate maker creates a valid check to pay a debt. A criminal then takes the good check and uses chemicals or other means to erase the amount or the name of the payee so that new information can be entered. The new information can added by typewriter, in handwriting, or with a laser printer or check imprinter, whichever seems most appropriate to the check.
Example 1: A door-to-door salesman sells a set of encyclopedias for $69.99. The customer pays by check, writing $69.99 to the far right on the line for the amount in figures, and the words "sixty-nine and 99/100" to the right far on the amount in text line. The criminal uses the blank spaces on both lines to alter the check by adding "9" before the numbers line, and the words "Nine Hundred" before the text line. The $69.99 check is now a fraudulent check for $969.99, which the criminal cashes.
Example 2: A small company that provides service to several small clients is paid by checks payable to "Johnson Co." or "Johnson Company." Criminals steal a number of those payment checks and use a chemical solution to erase the word Co. or Company, then type in the word Cooper. They subsequently cash the checks using false identification.
Example 3: A criminal steals a wallet, with a check in it, from the glove compartment of a car. The criminal uses the signatures on identification in the wallet as a basis for forging the endorsement. Then, using the identification in the wallet – altered if necessary – the criminal cashes the check at the payee's bank.
Altered check schemes can be successful when customers are careless and banks fail to check payee identification properly.
To protect against such frauds, customers should:
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