Check fraud is a billion dollar problem. Check fraud victims include banks, businesses and consumers. Our current system for cashing checks is somewhat flawed. Checks can be cashed and merchandise can be purchased even when there is no money in the checking account.

There are 5 main forms of check fraud to watch out for:

Forged signatures are the easiest form of check fraud. These are legitimate checks with a forged signature. This can occur when a checkbook is lost or stolen, or when a home or business is burglarized. An individual who is invited into your home or business can rip a single check from your checkbook and pay themselves as much as they like. Banks don’t often verify signatures until a problem arises that requires them to assign liability.

Forged endorsements generally occur when someone steals a check written to someone else, forges and endorsement and cashes or deposits it.

Counterfeit checks can be created by anyone with a desktop scanner and printer. They simply create a check and make it out to themselves.

Check kiting or check floating usually involves two bank accounts, where money is transferred back and forth, so that they appear to contain a balance which can then be withdrawn. A check is deposited in one account, then cash is withdrawn despite the lack of sufficient funds to cover the check.

Check washing involves altering a legitimate check, changing the name of the payee and often increasing the amount. This is the sneakiest form of check fraud. When checks or tax-related documents are stolen, either from the mail or by other means, the ink can be erased using common household chemicals such as nail polish remover. This allows the thieves to endorse checks to themselves.

Uni-ball pens contain specially formulated gel ink that is absorbed into the paper’s fibers and can never be washed out. The pen costs two bucks and is available at any office supply store.

Consider a locked mailbox so nobody can access your bank statements.

Using online banking and discontinuing paper statements.

Never toss old checks in the rubbish, always shred them.

Have checks delivered to the bank for pick up opposed to your home.

Guard your checks in your home or office, lock them up.

Go over your bank statements carefully.