Altered Check Fraud

Episode ID S1E07
June 21, 2020

Any time we mail a paper check, there's a risk of it being stolen. What's the downside of a stolen check? The thief can alter the check to gain access to your money, and change the amount to something much higher, even so far as to clean out your bank account. In this episode of Fraud Wise we’re talking about ways to protect yourself from altered check fraud.


Hello, this is CoBank’s Fraud Wise, helping you avoid becoming a victim of fraud.

With the convenience of electronic payments for everything from utilities to one-off purchases, it seems that many of us have greatly reduced the number of physical checks we write and mail. However, there always seems to be that one situation where the old-fashioned check is necessary, whether it is a niece’s birthday or working with a local business that hasn’t yet gone electronic.

Any time we mail a check, though, there’s a risk of it being stolen right from your or the recipient’s mailbox, so we do recommend that you mail any personal checks from the Post Office or a locked mailbox to reduce, but unfortunately not eliminate, that risk.

For businesses, checks can be stolen if the blank check stock is not secured or the issued checks are not mailed properly.

What’s the downside of a stolen check? First, of course, the intended payee won’t receive it. Worse, though, the thief can alter the check to gain access to your money, by changing the payee name to themselves, a consumer fraud victim or a fraudulent company. They can also change the amount to something much higher, even so far as to clean out your bank account.

As a business, positive pay services can help you detect altered or counterfeit checks through daily verification of checks posting to your Transaction Clearing Accounts.

Standard positive pay is simple: you generate a file listing all the checks you’ve issued, and your bank compares that list against checks that have been submitted for payment, then identifies any checks that don’t match the dollar amount and serial number of the checks on your list. Then, you simply decide to pay or refuse each check.

Standard or Basic positive pay compares only the check amount, but you can have additional protection with the Payee Match Positive Pay solution, which compares the payee names in addition to the check amounts and serial numbers. A third option is Reverse Positive Pay, which does not require an issue file. With Reverse Positive Pay, the bank will provide a list of all the checks presenting against the account for you to compare against your records and to identify any fraudulent checks.

If you are a victim of check fraud, be sure to report it to your bank promptly. Your bank can then initiate a claim with the bank that accepted the fraudulent checks. Recovery of your stolen funds is likely, though it’s not guaranteed, and it could take 90 days or more to resolve the claim. The timeframe for reporting check fraud varies by state, so again, report any check fraud as soon as it’s identified.

This has been CoBank Fraud Wise, helping you protect against fraud.