Traditional Fraud & How to Stay Safe

In addition to the growing types of online fraud, you still have to be on the lookout for traditional fraud. This type of fraud can include the following:

Credit Card Fraud

Check Fraud

Cashier’s Check Fraud


Credit Card Safety Measures

  • Obtain a copy of your credit report once a year to monitor credit activity happening in your name. Your credit report will list any credit cards or loans that have been opened in your name. The Fair Credit Reporting Act guarantees you the right to access a free credit report from each of the three credit reporting agencies - Equifax, Experian and TransUnion - every year. To get your free report, visit www.AnnualCreditReport.com.
  • Keep an eye on your mail. Credit card thieves often steal statements right out of your mailbox. Contact your credit card company if your bills from them are late.
  • Promptly open your credit card and credit union statements, and check carefully for unauthorized purchases, withdrawals or transfers. If you notice any discrepancies, call the credit union immediately.
  • Never give out your credit card numbers or expiration dates to someone who calls you on the phone. It's okay to give your credit card information to a reputable company or catalog merchant that you've called to place an order. But, if a stranger calls you and wants to know your account number - to send you a prize, to audit your account number or for any other reason - it's probably a scam.
  • Keep a list of your credit cards including account numbers, expiration dates and contact numbers for the issuing companies.
  • Make sure that no other customer in a store sees your name, credit card number and expiration date. Someone who knows this information can make charges on your card by phone.
  • Always make sure you get a receipt for your purchases. Double check that the amount is accurate, and be sure to cross out all blank lines so that no one can add additional charges after you've signed the receipt.
  • Carry only the cards you plan on using.
  • Destroy carbon copies of receipts.
  • Do not trust everyone who contacts you about credit card protection plans. These plans do not always exist.
  • Be wary of anyone who calls you with scare tactics or who implies that they are calling to activate protection features on your card.
  • Always sign your new cards immediately.

Check Fraud

Check fraud is one of the largest challenges facing consumers, businesses and financial institutions today. Readily available technology like personal computers, scanners and color photocopiers has made it easy for criminals to manipulate checks. These criminals can defraud you and your financial institution with a blank check taken from your check book, a canceled check found in your garbage or a check you mailed to pay a bill.

Using a process known as check washing, mail snatchers erase the ink on a check with chemicals found in common household cleaning products and then rewrite the checks to themselves, increasing the amount payable by hundreds and even thousands of dollars. In addition to the cost associated with fraud, the amount of inconvenience and anxiety caused by resolving problems with the account and local merchants, as well as possible repercussions with credit bureaus, can be considerable.

How to Avoid Becoming a Victim of Check Fraud:

  • Pay bills online instead of writing a check. If you have to write and mail a check, do not mail it from your home mailbox, where it can be easily stolen. Take it to the post office or a secure, locked mailbox.
  • Limit the amount of personal information on your check so that it's harder for thieves to steal your identity or open a checking account in your name. Do not include your Social Security, driver's license, credit card or telephone numbers.
  • When you receive your box of checks in the mail, make sure no checks are missing. Alert your financial institution if you have missing checks or do not receive them in the mail.
  • If someone pays you with a cashier's check, have them accompany you to cash it.
  • Be sure your checks are endorsed by your financial institution and incorporate security features that help combat counterfeiting and alteration.
  • Never give your checking account number to people you don't know, especially over the phone.
  • Reconcile your bank statement within 30 days of receipt in order to detect any irregularities.
  • Don't leave blank spaces on the payee and amount lines and, use dark ink that can't be easily erased or covered over.
  • When you order checks, have them mailed to your financial institution instead of your residence.
  • Use a gel ink pen to write personal checks. It prevents thieves from "washing" your checks and cashing them in their own name.

Cashier’s Check Fraud

How can you tell if a cashier’s check is fraudulent? It can be very difficult for either you or your financial institution to tell. When you deposit a check into your account, your financial institution generally is required by law to make the funds available within a specific period of time (usually, one business day for a cashier’s check or other official instrument). This is true even if the check has not yet cleared through the financial institutions system. Therefore, even if the funds have been made available in your account, you cannot be certain that the check has cleared or is “good”.

Your financial institution also may not be able to determine that the check is fraudulent when you deposit it. Rather, your financial institution may learn of the problem only when the check is returned unpaid by the other financial institution – which may take a couple weeks or more. Scammers try to make the item look genuine, which will delay discovery of the fraud. Once the item has been returned unpaid, your financial institution, generally, will be able to reverse the deposit to your account and collect the amount of the deposit from you.

What are your rights? If you find yourself in this situation, you ordinarily would have a remedy against the person who wrote the check. However, you will have great difficulty pursuing any remedy against these scammers, especially if they reside in a foreign country or have disguised their identities.

How to Avoid Becoming a Victim of Cashier’s Check Fraud:

  • Try to know the people with whom you do business. When possible, verify information about the buyer from an independent third party such as a telephone directory.
  • Be cautious about accepting checks – even a cashier’s check – from people that you do not know, especially since it may be difficult to pursue a remedy if the transaction goes wrong.
  • When you use the Internet to sell goods or services, consider other options such as escrow services or online payment systems rather than payment by a cashier’s check.
  • If you do accept a cashier’s check for payment, never accept a check for more than your selling price if you are expected to pay the excess to someone else. Ask yourself why the buyer would be willing to trust you, who may be a perfect stranger, with funds that properly belong to a third party.
  • A cashier’s check is less risky than other types of checks only if the item is genuine. If you can, ask for a cashier’s check drawn on a financial institution with a branch in your area.
  • If you want to find out whether a check is genuine, call or visit the financial institution on which the check is written. That financial institution will be in a better position to tell you whether the check is one they issued and is genuine.
  • Know the difference between funds being available for withdrawal from your account and a check having finally cleared. Your financial institution may be required by law to make funds available to you even if the check has not yet cleared. However, it could take several weeks to know if the check will clear or not.
  • Be wary of taking action before you can be sure that the payment you received is good.
  • Be suspicious if someone insists that you send funds by wire transfer or otherwise pressures you to act quickly before you know the payment you received is good.
  • If you receive a letter offering you a large sum of money for little effort other than sending a “processing” fee, remember: if something sounds too good to be true, it probably is.
  • Reject any offer that asks you to pay for a “prize” or “gift.”
  • Save your documents – you may need this paperwork if something goes wrong.
  • If you have become victimized by a fraudulent check scam, please follow these guidelines:
  • Anytime a scam involves a cashier’s check, official check, or money order from a financial institution, and you believe that it could be counterfeit, you should contact the issuing financial institution directly to report receipt of the check and to verify authenticity. When contacting the financial institution, do not use the telephone number provided on the instrument, as this number is probably not associated with the financial institution, but rather with the scam artist.
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