Check fraud is a serious crime that is very simple. As its name implies, check fraud involves illegally using and manipulating checks for one’s financial gain. There many ways check fraud can occur, and some are more common than others.
The simplest type of check fraud is forgery. Forgery is the act of signing someone else’s check by using that person’s signatures and making it seem as though you are that person.
Paperhanging is another way that check fraud occurs. Paperhanging is the act of depositing a check from a closed a bank account or from a bank account that does not have enough funds to cover the check.
Check kiting occurs when an individual opens bank accounts at more than one bank and takes advantage of the fact that bank accounts take time to reflect current balances. The thief writes a check from one bank to another and then takes the fund from that second bank and deposits back to the first so that the funds cover themselves.
Thanks to technology, check alteration is the fastest growing form of check fraud. As the name implies, check alteration involves changing the information on a check to make it easier to deposit.