Card & Cheque Fraud
Although cheque usage in Ireland has declined significantly, fraudsters continue to use cheques as a means to make money and defraud customers. Some common types of cheque fraud are described below:
Counterfeit cheque fraud – Counterfeit cheques are manufactured or printed on non-bank paper to look exactly like genuine cheques and are drawn by a fraudster on genuine accounts held by the bank.
Fraudulently altered cheques – A fraudulently altered cheque is a genuine cheque that has been made out by the payer, but a fraudster has altered the cheque in some way before it was paid in, e.g. by altering the beneficiary’s/payee name or the amount of the cheque.
Forged cheque fraud – A forged cheque is a genuine cheque that has been stolen from an innocent customer and used by the fraudster with a forged signature.
Funds not available – This is a genuine cheque; however there are no funds in the account to honour it.
(Another type of cheque fraud is an Overpayment Scam, where a business receives a cheque overpaying for goods or services followed by a request for a refund. To find out more information about this particular type of fraud please see our Overpayment Scam page here.
If your business uses cheques from time to time take account of the key advice below:
- Never issue a refund of a payment, either partial or full, until you are sure the cheque has cleared fully and is not at risk of being rejected.
- If you use cheques in your business for paying your suppliers and creditors, ensure the following:
- Keep cheques in a secure place
- Control who has access to cheque books
- Do not sign cheques in advance
- Ensure all issued cheques and unused cheque numbers are accounted for. Check this when you get a new cheque book and review regularly to ensure no cheques are missing, in particular any missing from the middle or towards the back of the cheque book.
- When sending cheques in the post, send securely and avoid using window envelopes
- Cross all cheques ‘a/c payee only’
- Reconcile bank statements upon receipt and report anything unusual
- Contact your bank if you have not received cheque books you were expecting