Checks contain lots of critical personal information including your name, address, bank account number, routing number, and perhaps most critical, your signature. Unfortunately, many businesses and persons fall victim to check fraud every day. Check fraud might not get as much attention in the media as credit card fraud and tax fraud, but it’s still a significant problem. Recently, the Appellate Division, Second Judicial Department issued a major decision on a check fraud case that could impact consumers everywhere.

In the case, the Plaintiff commenced the action against their bank, seeking to recover a whopping $114,175.42 that they allegedly lost via check fraud. Plaintiff claimed the bank was liable for the funds since they honored the twenty-three forged checks totaling the amount lost. The bank, however, argued that it was protected from liability because of the Plaintiff’s failure to report the forged checks within the time required by the law. The Supreme Court denied the defendant’s motion, and the case went to the Appellate Division.

The Appellate Division ruled in favor of the bank. They held that they had submitted evidence supporting that the period of time in which the Plaintiff was obligated to report forgeries to the bank would be sixty days from the first unauthorized transaction and thirty days for repeat forgeries. Additionally, they had mailed statements to the Plaintiff with copies of the forged checks, but the Plaintiff did not notify the bank of the forgery.

This decision reaffirms the best way a person or business can protect themselves from check fraud: vigilance. SBAGK is always prepared to assist consumers facing check fraud, and there are legal options for those who have fallen victim to it. However, it’s still vital that consumers understand the importance of safeguarding their information. Here are five ways to prevent check fraud:

Monitor bank accounts and protect their information.

Be sure to go over bank statements, whether they are electronic or mailed to the consumer. If they suspect anything is fraudulent, they should contact their bank immediately. Be sure to protect account numbers, routing numbers, and any other information a thief could use to produce a phony check.

Never leave a check out in public.

At home, consumers should keep checks stored away in a safe location only they can easily access. Never leave checks in a car or an open area of the home.

Try to mail checks from a post office.

Consumers should try not to drop their checks into a mailbox; it’s possible for someone to steal the check from it. Instead, mail them straight from the post office. Consumers should also consider sending checks via certified mail, so they can be tracked and the consumer can verify when they are delivered.

Do not write a Social Security Number on a check.

Never write an SSN on a check; it makes it very easy for check fraud artists to steal information. If someone is required to write identifying information on a check, like when paying their taxes, try to only write the last four digits and certify the mailing.  

Acquire “fraud prevention pens.”

It sounds strange, but there are some fraudsters who will actually use chemicals or solvents to erase or change check information. Writing a check with fraud prevention pens can render a check extremely difficult to tamper with.