When a check is altered (typically the payment amount or recipient name), it constitutes a form of check fraud and can be financially damaging to its victims. Learn more about this situation, as well as tips for how to spot an altered check.
What Is an Altered Check?
An altered check is a paper check that was altered by someone other than the check writer, which can be a kind of bank fraud. Essentially, it occurs when someone writes a check and another person changes the amount on the check (usually by adding an extra zero at the end of the check amount or by changing the payee’s name) in order to commit fraud.
The payer or payee who was defrauded needs to report this fraud within a year to help ensure the loss will be covered. If a bank has reason to believe a check has been altered fraudulently, it can legally refuse to cash it.
The Office of the Comptroller of the Currency (OCC) advises not leaving large spaces in the number and amount lines when writing a check to help avoid fraudulent alterations from occurring.
Altered checks are one of the most common types of check fraud. Other types include forgeries and counterfeit checks.
Who is liable when a bank finds an altered check? According to the Uniform Commercial Code (UCC) — which addresses altered checks in Section 3-407 — the liability can affect multiple parties, including:
• The check writer
• The check cashier
• The bank that presents the check
• The bank that verifies and cashes the check
It’s not always easy to know when a check is good (you’ll learn more about this below). If you do find evidence of an altered check, you should ideally report the loss within 30 days, but you have to do so within one year if you want to be reimbursed for the loss.
To help soften the blow of altered check fraud, consumers can benefit greatly from examining their bank statements after they write a check to ensure the right amount is processed.
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Example of an Altered Check
Not sure what an altered check looks like? Here’s an example of an altered check which may make it easier to spot one.
Say a check is made out to a dollar amount of $1,000. Look closely at that payment amount. Ask yourself these questions:
• Does the last zero look like the same type of ink was used to write it and was written in the same style of handwriting?
• Does that final zero appear to cross over a period?
It’s much more common to see an altered dollar amount than a changed name because it’s a lot easier to add a zero at the end of a series of numbers than it is to change a name completely.
However, there is a crime known as check washing in which someone can get a hold of one of your checks and use household chemicals to erase the name and amount. They can then fill in their own name and whatever amount they please.
Recommended: How to Sign Over a Check to Someone Else
Can an Altered Check be Cashed?
It is possible to cash an altered check, but fortunately it’s fairly difficult to pull off these days, thanks to advanced security efforts. Banks use high-tech watermarks and other authentication and fraud detection methods to make it very hard to cash altered checks.
One of the reasons that banks take fraud detection so seriously is because the liability can fall on the bank if they fund an altered check.
Is It Illegal to Alter a Check?
It is illegal to alter a check and if the amount of the check is more than $1,000, altering it is considered a felony. For altered checks of less than $1,000, this crime would be prosecuted as a misdemeanor. All jurisdictions have differing penalties, and these penalties can vary depending on factors such as the check amount.
All forms of check fraud are illegal, including counterfeiting and payroll fraud.
What Types of Checks Are Typically Altered?
Here’s a closer look at the most common types of checks to be altered in addition to basic personal and business checks.
Cashier’s Checks
A cashier’s check functions similarly to personal checks. The main difference between them is that with a cashier’s check the bank or credit union that issued the check guarantees that it will cash. Despite the fact that cashier’s checks have added security features like watermarks and signatures from two bank employees, they can still fall prey to check fraud.
Traveler’s Checks
A traveler’s check is a paper document someone can use to make purchases while traveling in other countries instead of using a normal check or cash. All traveler’s checks have unique serial numbers that make it possible to get refunds if the checks are lost or stolen. It’s important to be careful when traveling as criminals look for tourists to steal from. While traveler’s checks may not be as popular as they once were, they are still used and can be altered if they fall into the wrong hands.
Recommended: Can You Deposit Traveler’s Checks in Your Bank Account?
Money Orders
Money orders can be more secure than personal checks, but they can still be altered, so it’s always a good idea to pay close attention to the details. Similar to a cashier’s check, a money order is guaranteed by the issuer of the check, but instead of a bank this can be the U.S. Postal Service or a retailer.
Tips for Banking Securely
Check out the following tips to protect yourself and your money.
Monitor All Bank Accounts
Keeping an eye on the transaction history of a checking or savings account can help consumers catch fraudulent behavior like altered checks while there’s still time to remedy the situation. It can be wise to monitor your bank account a couple or a few times a week.
Change Passwords Often
It’s a good idea to change your online banking and other passwords frequently and not to use the same password for multiple different accounts to help avoid someone stealing login information and using it to commit financial fraud. It’s also helpful to not include personal information (name, birthday, etc.) in a password and to use a mix of upper- and lower-case letters, special characters, and numbers when creating a new password.
Only Access Online Bank Accounts From Secure Locations
You shouldn’t log onto their online bank account when using shared public wifi at your favorite coffee shop or when traveling. It’s best to only ever log into important accounts when using a secure connection like at home so no one can intercept and steal account login information.
Recommended: Cashing a Check Without a Bank Account
The Takeaway
Check fraud is an unfortunate reality so it’s a good idea for consumers to keep an eye on recent bank transactions to make sure any checks they wrote were cashed for the correct amount. A fraudulent check is a check with altered information on it — such as the amount or payee information.
There are steps consumers can take to protect their financial lives when banking. For example, it’s always best to bank with a financial institution that prioritizes security, like SoFi.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
FAQ
How do you tell if a check is altered?
More often than not, the payment amount is the part of a check that is fraudulently altered. Check the payment amount closely to see if it looks like an extra zero was added at the end or another number was changed.
How long does a bank have to return an altered check?
If you notice an altered check, ideally you should report it to the bank within 30 days. That being said, consumers have up to one year to report the loss to their bank in order to get the amount of the check returned to them.
What happens if you deposit a fake check without knowing it?
If you deposit a fake check without realizing you are doing so, there’s a possibility you may be liable. The bank that credited the account could choose to later reverse the funds if the check is found to be fraudulent. All banks have different policies regarding fraudulent checks.
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