Cheque fraud can be described as the ‘depositing of a fake or manipulated cheque’. Cheque frauds are increasingly common in many jurisdictions, and therefore, it is important to understand the various types of cheque fraud and how to avoid them. In this article, we will be discussing the various types of cheque fraud and also the preventive measures that one can take when facing such issues.
Different Types of Cheque Fraud
Fake Cheques: In this type of fraud, the fraudsters create an authentic-looking cheque, usually by copying the details from an original cheque, and the unsuspecting victim ends up accepting such cheque without realizing that it is a fake one.
Cheque Manipulation: In this type of fraud, the cheque is intentionally manipulated to change some of its details, such as the amount, date or beneficiary details. The manipulation is done to defraud.
Magic Ink Technique: In this type of fraud, the fraudsters provide magic ink to write the cheque. This results in the written details disappearing due to the constituency of the special type of ink used and thereby providing the opportunity for the fraudsters to fill in the cheque details by themselves, such as entering their desired amount.
Theft: In such type of fraud, a signed cheque is stolen from the original beneficiary of the cheque, and the fraudster deposits the cheque and receives the payment.
Preventive Measures That Can Be Undertaken To Avoid Cheque Frauds
Thankfully there are mainly simple and effective preventive measures that one can take to ensure that they do not fall prey to cheque fraud. These include:
Always examine a cheque clearly before receiving or signing one to ensure that the cheque is not tampered with, one can check for any overwriting or striking off and also for the security features which are part of every cheque.
Never issue cheques to unknown entities or persons, and as far as possible ensure to have proper written communication in place whether an agreement or otherwise with reference to the cheque number. This discourages the potential opportunities for a fraudster to misuse the cheque.
Ensuring the physical safety of your cheque to avoid any potential theft or manipulation of the same.
Upscaling your security features with your bank, such as proper notifications and, where possible, including dual signatories for a cheque approval as an enhanced security feature.
Make it a habit to routinely check your monthly account statement and bank alert notifications in order to ensure that in case of fraud, you are able to take legal recourse immediately.
It is also a good practice to rely on banking transactions more than on cheques, especially when the other party is not well known to oneself.
Use your own pen always for signing a cheque in order to avoid the potential misuse of magic ink.
If ever faced with a cheque fraud matter, one should ensure to take prompt steps, which includes immediately notifying the bank and also proceeding to file a police complaint. As cheque frauds are increasingly common, one must exercise even greater caution in this regard.
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About the Author
Dr. Hassan Elhais publishes analysis of UAE criminal law matters, including cheque disputes, payment obligations and the distinction between civil and criminal issues. For readers researching a cheque case lawyer in Dubai, his writing offers insight into the legal questions surrounding these topics. Explore his published work and practice-area information for further context.
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