Cheque fraud scams

A Cheque is a signed, written instruction you give to your bank to pay money out of your account. Cheques are a handy way to make payments without having to use cash. Savvy money management skills require that you should be aware of the security measures to take when handling Cheques. Despite the decline in Cheque usage, Cheque Fraud remains one of the largest challenges facing business and financial institutions. The victims include financial institutions, businesses or customers that accept and issue Cheques.

Generally, Cheque Fraud looks like a legitimate business transaction. The perpetrator will approach the targeted business entity with an urgent order for goods or services and a promise for immediate payment. The promise is often supported by proof of cash deposit or electronic payment. However, the payment is made with a bogus or fraudulent Cheque. This Cheque is not honoured by the bank and leaves the business or customer out of pocket. Anyone who receives payment must verify that the payment was made in cash and if it is a Cheque payment wait until the Cheque clears before releasing the goods.

Advanced computer technology has allowed significant amounts of Cheque Fraud through counterfeiting to copy or create duplicates and chemical alteration to manipulate information. The majority of Cheque Fraud is stopped before any losses occur, still Cheque Fraud costs millions of Rands each year. In some cases, banks receive business Cheques removed from legitimate Cheque books for large amounts of cash. It is not uncommon for perpetrators to collude with business or domestic staff to steal and forge signatures of owners with signing power. Banks have preventative measures to verify the validity before payment such as telephonic confirmation. Sometimes, the perpetrators will circumvent these measures by hijacking communication attempts by pretending to be the client. To avoid the financial losses associated with Cheque Fraud, customers need to be vigilant about suspicious Cheque deposits. Here are some practical tips to help avoid becoming a victim:

Tips to Avoid Becoming a Victim of Cheque Fraud:

  • Always keep your Cheque book in a safe place.
  • Advise your bank as soon as you suspect fraud on your account or have lost your Chequebook.
  • Keep the returned Cheques locked away in a safe place.
  • Report lost stolen or missing Cheques immediately.
  • Ensure you complete the payee details tab in full and include the amount in figures as closely as possible.
  • Include your account number in the payee line when making account payments.
  • Use crossings appropriately.
  • Always mark crossed Cheques “not transferable” to help prevent fraud.
  • Reconcile bank statements regularly.
  • Use alternative payment methods such as cash, electronic, card or cell phone banking.
  • Do not use Cheques made out to cash if possible.
  • Shred old outdated Chequebooks.
  • Do not carry Chequebooks unnecessarily on your person or in bags, briefcases or vehicles.
  • Ensure to stop payments if a Chequebook is misplaced or stolen or misplaced to prevent fraudulent use of the Cheques. Cheques are a valuable commodity to criminals irrespective if the signature is present or not.
  • Never sign blank Cheques because fraudsters can simply complete the details to suit themselves.
  • Always write out payee details in full and do not use abbreviations.
  • Do not post Cheques.
  • Do not release goods even if a bank Cheque is presented, without checking with your bank.
  • Do not advertise your banking details.
  • Wait until the Cheque has cleared before drawing money

Bank Crime Info


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