How to Detect Check Fraud Early

Whether a check is stolen from the mail, altered, forged or used as part of a scam, spotting suspicious activity early can help limit financial loss and protect your account. The challenge is that check fraud is not always obvious right away. A payment may seem delayed, a check may clear for the wrong amount or you may notice an unfamiliar transaction weeks later. That is why regularly monitoring your account is so important.

 Here are some common warning signs of check fraud and what to do if something does not look right.

 A Check Has Not Been Cashed When Expected - If you mailed a payment and it has not been processed within the normal timeframe, it is worth following up. This does not always mean fraud has occurred, but the check could have been delayed, lost or intercepted.

 What to do: Contact the person or company you paid and confirm whether they received the check.

 A Check Clears for the Wrong Amount - A check clearing for more or less than the amount you wrote can be a sign that it was altered or “washed.”

 What to do: Compare the transaction with your records and review the cleared check image. Many financial institutions make check images available through online or mobile banking.

 You See a Payment You Do Not Recognize - If your account shows a check payable to a person or business you did not authorize, it could be a sign of a forged or altered check.

 What to do: Review the transaction details immediately and contact your financial institution as soon as possible.

Checks or Mail Are Missing - Missing checks from your checkbook or mail that never arrives may be a sign of theft. Stolen blank checks can be used fraudulently.

 What to do: Secure your remaining checks, report missing checks to your financial institution and report missing mail to the U.S. Postal Service.

You Notice Unfamiliar Account Activity - Fraud does not always appear as a check transaction. Stolen account information can also lead to unusual withdrawals or other unauthorized activity.

 What to do: Watch for unfamiliar withdrawals, small test transactions or repeated failed payment attempts.

Simple Ways to Monitor Your Accounts 

Set Up Account Alerts - Many financial institutions allow you to set alerts for withdrawals, deposits, checks clearing, low balances and large transactions. These notifications can help you identify suspicious activity quickly. If you are unsure how to set up alerts, contact your Five Star for assistance.

Review Your Account Weekly - A quick weekly review can help you catch problems before they become larger issues. Look for unfamiliar payments, checks clearing for incorrect amounts or expected transactions that are missing. Even a few minutes each week can make a difference.

Review Cleared Check Images -If check images are available through your financial institution, review them periodically. Confirm that the payee, amount and signature are correct. This can help you identify altered or forged checks.

Keep a Record of Checks You Send - Use a check register, notebook or secure digital record to keep track of checks you write. Record the date, check number, amount and recipient so you can easily compare your records with account activity later.

 Be Cautious with Unexpected Checks - If you receive a check you were not expecting, especially one connected to a job offer, prize or request to send money elsewhere, be cautious before depositing it. Unexpected money can be a warning sign of a scam.

 What to Do If You Notice Something Suspicious

 Step 1: Contact Your Financial Institution - Tell your financial institution what you noticed. Depending on the situation, they may be able to place a stop payment, flag or restrict the account or transaction, or begin investigating the activity. The sooner you report suspicious activity, the better.

 Step 2: Gather Your Records - Collect any information related to the transaction, including check numbers, account statements, payment records, emails and text messages. Having this information available can help make the investigation process easier.

Step 3: Continue Monitoring Your Account - After reporting suspicious activity, continue reviewing your account closely. Fraud can sometimes involve more than one transaction.

Step 4: Update Your Account Security if Needed - Depending on the circumstances, your financial institution may recommend additional steps, such as closing the affected account and opening a new one, changing passwords or adding additional security measures.

Early Action Can Make a Difference

The key is simple:

Small habits can make a meaningful difference. Download the check fraud detection checklist to help monitor your account, track payments and identify suspicious activity sooner. You can also take the America Saves Pledge to make a commitment to saving for what matters most to you, one step at a time.