A focus by banks on identifying lost or fraudulent cheques as they pass through the clearing system means that £9.50 in every £10 of attempted cheque fraud is stopped before a loss occurs. However, a minority of fraudulent cheques do get through the system, and it is helpful if customers know what kind of fraud is attempted so they can try to avoid falling victim.
There are three main types of cheque fraud:
- Counterfeit – a cheque that has been created on non-bank paper to look genuine. It relates to a genuine account, but has actually been created and written by a fraudster for the purposes of committing fraud.
- Forgery – a genuine cheque, however the signature is not that of the account holder. The fraudster has forged the signature by signing the cheque themselves.
- Fraudulently altered – a genuine cheque made out by the genuine customer but it has been altered by a fraudster before it has been paid in (e.g. by altering the recipient’s name on the cheque or the amount. It is no longer a genuine cheque).