Member Article

Cheque Fraud - A Few Reminders

With Watson Burton LLP Law FirmWhat form does it take?• Altering the payee or amount on the cheque without authority often following the theft of a legitimate cheque.• Duplication or counterfeiting of cheques.• Use of false invoices to solicit legitimate cheques.• Depositing a cheque into a third party account without authority.• Depositing a cheque for payment knowing that insufficient funds are in the account to cover the deposited cheque.How can you protect yourself or your business from cheque fraud?When issuing cheques:• Destroy any spoiled or unused cheques.• Never sign a blank cheque and only sign after all details have been completed.• Ensure your signature does not appear on documents which could be accessed by the public.• Laser print cheques if possible; however if handwritten, use permanent ballpoint or ink and complete in strong, bold and consistent font to deter fraudulent alteration. • Leave no gaps in the completion of the payee name, amount in words and in figures.• Keep all cheques in a safe place and report any missing cheques to your bank immediately .• Avoid sending high value cheques in the post.• Go through your statements and reconcile your accounts promptly and regularly.In relation to business accounts specifically: • Consider opening a separate account for high value cheques or using an electronic payment method such as CHAPS payment.• Separate cheque writing and account reconciliation functions within your business.• Limit the number of signatories to the account, regularly review account authorities and consider implementing a two sign policy.Banks will deal with each case of cheque fraud on an individual basis but, as a general rule, if you are an innocent victim of cheque fraud who has had a cheque or chequebook stolen and used fraudulently, you will be refunded by your bank.When accepting cheques:• Do not accept a cheque or banker’s draft from someone unless you know and trust them especially when it is of high value.• Consider alternative electronic payment methods.Be aware that even after the value of the cheque has been credited to your account, the funds could be reclaimed if the cheque subsequently turns out to be stolen or counterfeit.Sarah Daunt and Mark Heath are lawyers in the Commercial Fraud Team at Watson Burton LLP. For further information on cheque fraud contact Mark Heath, Head of Commercial Fraud on 0191 2444306 or mark.heath@watsonburton.com.

This was posted in Bdaily's Members' News section by Ruth Mitchell .