By: Seth Gilkes, CPA, CCIM
Although checks are used and accepted far less than they used to, even their limited use provides criminals the opportunity to pay for things or obtain cash using fraudulent or counterfeit checks.
Computer technology enables criminals to reproduce authentic looking checks. Other times, a criminal may obtain real checks and alter them to avoid being caught once a bank tries to process it. If you cash or deposit a phony check, you’ll likely be on the hook for the amount.
Warnings signs of phony checks include:
No perforations: Standard checks are usually part of a book and attached with a perforated edge. A check that was counterfeited will typically lack the jagged edge.
Irregularities along the MICR line: The account and routing numbers printed along the bottom of the checks are known as the Magnetic Ink Character Recognition line. This strip is difficult to replicate because of the special ink used. Authentic checks should have a dull and non-glossy appearance on the MCIR line, while fake checks will look raised and shiny.
The numbers themselves can also reveal a fake: The encoding at the bottom should match the actual check number. In addition, the first two digits of the routing number indicate which of the 12 Federal Reserve districts the bank on which the account is drawn is located. Check forgers will often change the routing number to delay processing time. Really bad counterfeits will be missing the MICR lines altogether.
The paper: The thickness of the paper may also expose a fake check. Whereas real checks are typically printed on sturdy stock paper, fake ones are often thin and flimsy. The paper should also be dull; fake check paper will be shinier. You can also test the check by lightly dampening your finger and running it along an inked area. If the color smears, it’s a fake check printed on a standard color printer.
Other signs that a check is a fake include:
• Address lines that looked typed on instead of professionally printed.
• The customer’s or bank’s address is missing.
• The signature has gaps or the appearance of erratic pen strokes as if it was forged. Also look for a digital appearance indicating that somebody scanned or printed the signature.
• Discoloration indicating that information was erased and replaced.
• A missing bank logo or one that looks faded as if it was copied from another source.
• Spelling errors.
The cost of being a victim of check fraud makes it worth the extra few minutes to examine a check for these signs of forgery.