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How to Identify a Fraudulent Check


Here is a quick summary on how to indentify fake checks and how to exercise "ordinary care and diligence". Counterfeit checks fall in one of three general categories: fake checks, altered checks or forged checks (collectively "CAF checks").


For the first type, a fake check is an entirely fraudulent check, but is based on genuine information, usually taken from a victim of identity theft. Altered checks are genuine checks with a true signature, but with a forged adjustment, typically the amount. Lastly, forged checks are produced by either stolen blank checks or "washed" checks with a false signature.


Understanding the patterns that most forgers follow can help prevent checks from ever passing or help discover CAF checks more rapidly. Fake check passers are the hardest to catch as they often use a counterfeit identification card in order to cash a check quickly. Here, the merchant’s main countermeasure is to understand how to spot a fake ID, be able to verify ID information and be on the lookout for behavioral clues such as nervousness and an imposed time pressure on the person which the check was presented.


A signature comparison usually helps if possible. Measuring the length of the signature is the one of the most important comparison points as a person’s signature varies over time and under different conditions, but the length is usually consistent. In addition, forged or "new" signatures often have uneven pressure where the criminal may pause, mid-signature. Spacing between letters may be slightly larger than normal, there may be ink blots from holding the pen on the paper a longer amount of time and the starting stroke of the next letter will be heavier.


For behavioral clues, CAF check writers often pass a few small regular checks with a specific employee in order to build rapport. Then, the criminal will bring in a much larger check after the clerk feels comfortable with the individual because all other checks have passed without incident. However, it is important to note that even when an individual mirrors this behavior, it is possible that they are not the criminal, but rather the victim, as these presenters of CAF checks either unknowingly passed the check or an unwitting accomplice asked to cash the check.


One of the most common types of CAF checks is the forged "washed" check. Here, education can play an immense part in fraud control because if employees know how these checks are created and how to identify them, they can be stopped before they are ever cashed. Washed checks typically use checks that are stolen from the mail or other theft. The forger traces the original signature in pencil and then washes the pen ink off the checks in a chemical solution that is some combination of brake fluid, rubbing alcohol, acetone and hydrogen peroxide. The graphite pencil trace of the signature remains on the check through the chemical wash and after the check is dried, the signature is retraced in pen and the rest of the now blank check is completed. The physical features that most easily identify a washed check are residual chemical odors, residual or smudged ink stains and unusual texture from chemical absorption into the check during the drying process and eraser marks around the signature from erasing the graphite trace. One recommendation you can give your clients is to write checks with gel pens which are harder to wash out because of the composition of the ink.


Catching good counterfeit checks is difficult and this is just meant to provide a high level overview that will hopefully serve to provide a first line of defense.

   
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