Cheque fraud scams

Three common cheque scams are:

• In recent years organised gangs have focussed on innocent consumers selling high-value goods such as cars, by paying with stolen or counterfeit cheques or bankers' drafts. Anyone wanting to accpet a cheque or bankers' draft is advised not to hand over the goods until they have certainty that the cheque funds will not be reclaimed (this happens at the end of the sixth working day after they have paid the cheque into their account).
• Fraudsters often attempt to take the above scam one step further by offering a cheque or bankers' draft for significantly more than the price of the goods. As ever, anything that sounds too good to be true should set alarm bells rining, even though the fraudster's reason for paying more may sound plausible. Basically, this scam involves the innocent seller being asked to transfer the amount of the overpayment either to the frauster, or to a third party after three days when, it is claimed, the cheques will be cleared. In a situation like this it is likely that the cheque or draft is fraudulent. Banks do all they can to spot and stop such cheques and drafts in the clearing system but, in some cases, the cheque might be genuine and the fraudster simply has insuffient funds in their account. In this case the paying bank will return the cheque unpaid and should the customer have already made the overpayment to a third party, they will losee the funds. Within the 2-4-6 clearing timescales it is not until the end of the sixth working day after the cheque has been paid in that the customer can be sure that the funds are theirs, and will not bounce.
• There have been a number of cases reported which involve the addition of an extra name to the payee line - without any of the original detail being removed. Fraudsters target cheques where there is an unused space in the payee line, by adding 're', 'or', 'T/As' or 'c/o' followed by a new name in the space left blank. This type of fraud means there are no signs of obvious alteration, reinforcing the importance of drawing a line through all unused space when writing out a cheque.