Can i cash a altered fictitious check

In most fake check scams, the person will ask you to deposit or cash a check. When the bank later finds out that the check is counterfeit, you — not the scammer — will likely be held responsible for returning the money to the bank. How are these scams so effective? They can be very convincing. The fake checks may look like legitimate checks with appropriate watermarks, and they may appear to be issued by legitimate financial institutions. In some cases, they can be checks written from the accounts of identity theft victims who have no idea someone is writing checks in their name and withdrawing their money.

The federal Expedited Funds Availability Act requires banks to make deposited funds available quickly. In many cases, funds deposited via check are available for withdrawal the next business day after being deposited. The bank may not find an issue with the check until the other bank returns it unpaid. It is best for the auditor to pull the invoices from the invoice file; if you ask someone in accounting to pull the invoices, that person might create fictitious invoices to support your list not hard to do these days.

If the payee has been altered, you will, in many cases, not find a corresponding invoice. Pay particular attention to checks with company employees on the payee line. Click here for more white-collar crime examples. For the last thirty years, he has primarily audited governments, nonprofits, and small businesses.

He frequently speaks at continuing education events. In addition, he consults with other CPA firms, assisting them with auditing and accounting issues. It is true; an accounting clerk with such functions concentration is most tempting. I always have paid attention to the functions segregation, and always have made test of the disbursements. As a bookkeeper for different companies at different times I can attest that internal theft is a common concern. Segregation of duties is helpful, but usually to only large companies.

Smaller companies need independent audits. Of course there are a few honest people left out there. Very good point Jim.

I think most small business owners never consider that falsified checks can clear their accounts. When testing cash disbursements during an audit, I always obtain the cleared checks or check images and vouch to source documents. Makes life easier and you never know what you may stumble upon without trying.

Alan, good thinking. Clients should be looking at the payees on cleared checks as well. Look for Inconsistent Handwriting When accepting checks for deposit over the counter, your tellers should look for handwriting inconsistencies. Check for Visible Signs of Alteration and Erasure Your tellers should also look for visible signs of alteration when accepting checks for deposit. Tell Customers Not to Leave Spaces If your customers leave spaces when they write out checks, that can make their checks more susceptible to alteration.

Advise Customers to Keep Checks Safe Checks need to be stolen before they can be altered, and to prevent that from happening, your customers need to keep their checks safe.

Be Aware of Internal Risks for Corporate Clients Check tampering often tends to affect corporate or business clients more than individuals. Make sure customers with business accounts are aware of the risk of internal fraud, and consider urging them to implement the following safeguards: Limit access to checks to certain employees.

Have a clear chain of custody for checks from the time they are written until they are signed and dispatched. Keep vendor lists up to date to ensure no one is issuing checks to fake vendors. Destroy voided checks. Embrace built-in check security methods such as watermarks or security threads. Use electronic payment methods when possible.

Offer Positive Pay to Your Customers Perfect for corporate customers, positive pay allows your customers to submit a list of the checks they issue every month or statement period. Consider Using Security Seals You may also want to offer business account holders the technology to print security seals on their checks.

Urge Account Holders to Report Stolen Checks Let both your business and personal account holders know about the importance of reporting stolen checks. Use Automated Check Image Analysis Tools Unfortunately, even if your tellers are extremely well trained and have a keen eye for fraud, they are going to miss some altered checks.