There are several methods most often used for check fraud. Discuss a minimum of two of the four methods

Question

What will be an ideal response?

Answer 1

Forgery: Usually the offender steals a check, endorses it with a forged signature, and presents it at retailer establishments or banks to obtain goods and/or money—and perhaps also uses a fake ID to execute the financial transaction. When a business is the victim, a corrupt employee issues a check without proper authorization. Fake and Altered Checks: Fake checks can be produced quite easily by using scanners, digital imaging software, high-quality laser printers, or simply a color photocopy machine. These checks may be detected, however, by the lack of reflective appearance of the MICR line that contains the bank and customer account information. This line, at the bottom of the check, is encoded with magnetic ink that reflects light for automated devices that read the financial information on the check. Regular toner ink used to produce fake checks does not have the same qualities, and offenders rarely produce the MICR line with magnetic ink. Checks can also be altered using certain chemicals. Acetone, brake fluid, and bleach can be used to remove handwriting and modify information written on the check. Discoloration in areas of checks containing the dollar amount to be paid, called spot alteration, may be present. In other instances, all the information on a check can be obliterated with chemicals—referred to as check washing. Instead of using these sophisticated chemical methods, offenders may simply alter the original written information on the check using pens or other writing instruments. Paperhanging: Writing checks on closed accounts or reordering checks on closed accounts for future use are the most common methods of this check fraud technique. Checks may be issued in the offender's name or that of an innocent third party. Check Kiting: The offender opens checking accounts in two or more banks and writes a bad check on one account to deposit in another to create fraudulent balances. The offender draws money from the fraudulent funds before the bank can determine that the account balance was created with a check written against another account with insufficient funds.