The Definition of Altered Check: Examples & Liability


Key Takeaway:

  • An altered check is a check that has been modified in some way after it was issued by the account holder, typically with the intent to fraudulently receive funds.
  • Examples of common alterations on checks include changing the payee name, the amount, or the check date. When receiving a check, look for red flags such as erasures, different handwriting, or missing information that indicates potential alterations.
  • The liability for altered checks falls on the person who issued the check, but banks and financial institutions also have responsibilities to ensure the authenticity and validity of the checks. If faced with an altered check, report it immediately to the bank and take steps to protect yourself from further fraudulent activity.

Are you confused about what an altered check is and the potential liability it carries? This article will explore the definition and implications of altered checks, as well as provide an example to better understand the concept.

Definition of Altered Check

Altered checks refer to checks that have been modified or tampered with in some way, such as changing the payee name or the amount of money. These modifications can be made with the intent to deceive and defraud the recipient of the check. Altered checks are illegal and can result in severe consequences for both the person who altered the check and the person who cashed or attempted to cash the altered check.

When a check is altered, it no longer represents a legally binding obligation to pay a specific amount of money to the original payee. Instead, it becomes a fraudulent document that can cause financial loss and legal troubles for all parties involved. Therefore, it is critical to verify the authenticity of any check received before cashing it or depositing it into an account.

It is vital to take preventative measures to avoid the risk of altered checks, including verifying the signature, checking the payee name, and ensuring the amount matches the written and numerical amounts. Furthermore, individuals should be cautious when performing transactions with unfamiliar parties and be aware of the signs of altered checks.

Pro tip: Always exercise caution and diligence when dealing with financial transactions involving checks to prevent potential financial loss and legal troubles.

Examples of Altered Checks

To spot changed checks with usual changes or warning signs, take a look at the subsections in the "Examples of Altered Checks" section. It's key to know typical ways to alter checks and what to search for when getting one.

Common alterations on checks

Many alterations can be made on checks to deceive or commit fraud. These alterations can have legal and financial implications for the parties involved.

The following table shows common check alterations, their definitions, and examples:

   Alteration Definition Example     Date Changing the date on a check A forged check with altered payment or deposit date   Amount Changing the amount written on a check $100 becomes $1,000   Payee Changing the name of the person receiving Pay to: John Doe becomes Pay to: Jack Smith   Signature Forging a signature on a check Forged signature of account holder    

It is crucial to be vigilant when receiving or issuing checks as these alterations can go unnoticed at first glance.

It is estimated that altered checks scheme accounted for $172 million in U.S. losses in 2020 (American Bankers Association).

Receiving a check is like playing a game of poker; watch out for any suspicious bluffs or you might end up losing big.

Red flags to watch out for when receiving a check

When accepting a check payment, it is important to remain vigilant towards telltale signs of fraudulent activity. Here are some indicators that the check may not be legitimate:  

  • Amount: Watch out for checks with unusually large sums or values.
  • Date: Be cautious of checks that have a date that does not match the current timeframe.
  • Signature: Verify that the signature on the check matches that of the account owner and it's not digitized.
  • Banks: Check if the bank name and routing number corresponds with those provided by your customer or payer.

 In addition to these red flags, there are other unique details to watch out for when receiving a check. This can include subtle variations in font styles or colors, altered payee names, and differences in handwriting. As a best practice, always verify checks with your financial institution before depositing them.  To avoid potential financial losses and safeguard yourself from fraud, vigilance is necessary when receiving checks. Keep an eye on these red flags and remember to double-check any suspicious payments before accepting them. Don't fall into the trap of negligence and assure strict protocol while checking all aspects mentioned above so you don't miss any warning signs and stay secured!  Unfortunately, the only thing altered checks are good for is causing liability headaches for all parties involved.

Liability for Altered Checks

To comprehend the accountability for changed checks in banking, dive into the subsections.

Who is liable for a changed check?

And, what are the steps to take when presented with one?

These two subsections provide answers to usual issues that come up with altered checks.

Who is responsible for an altered check?

The liability for altered checks falls on the drawer of the check. Any modification made to a check without authorization is considered an altered check. The drawer needs to be vigilant when filling out the details, signing and handing over the check. Alterations can lead to fraudulent activities, resulting in loss of funds.

To prevent such mishaps, individuals must avoid leaving blank spaces or gaps in the check and sign immediately after filling it out. Using machine-printed checks with security features, such as watermarks and microprinting, can also help reduce the risk of alterations.

Steps to take when faced with an altered check

When presented with an altered check, one must take appropriate measures to ensure financial safety. Here's how:

  1. Verify the payee name, amount, and signature with the original check.
  2. Contact the issuing bank or credit union to report the altered check and request a stop payment immediately.
  3. File a police report and provide details of the altered check along with any supporting evidence.
  4. Keep copies of all relevant documents regarding the altered check for future reference.
  5. Avoid accepting checks from unfamiliar sources in the future, especially those that appear to have alterations or corrections made on them.

It is important to note that attempting to deposit an altered check can result in legal action and potentially face criminal charges.

Pro Tip: Always be cautious when dealing with checks and investigate every detail before taking any further steps.

Five Facts About Altered Checks:

  • ✅ An altered check is one that has been tampered with, usually to change the amount or payee. (Source: The Balance)
  • ✅ Altered checks are a common form of check fraud, and can be difficult to detect. (Source: Investopedia)
  • ✅ The liability for an altered check often falls on the person or entity who signed the check. (Source: LegalZoom)
  • ✅ Some ways to protect against altered checks include using security features like watermarks and choosing banks that offer fraud protection services. (Source: The Balance)
  • ✅ It's important to review bank statements regularly to identify any unauthorized or suspicious activity, including altered checks. (Source: Consumer Financial Protection Bureau)

FAQs about Altered Check: Definition, Example, Liability

What is an altered check?

An altered check is a check that has been illegally modified after it was originally written and signed by the account holder. This could be changing the payee, the amount, or any other information on the check.

Can you give an example of an altered check?

One common example of an altered check is when someone changes the payee on the check. For instance, if John writes a check to Jane for $100, but Jane alters the check and writes her own name on it, she can cash the check for herself instead of John.

Who is liable for an altered check?

The account holder is usually held liable for an altered check. However, if the bank fails to detect the alteration before cashing the check, the bank may also be held liable for the loss.

How can I protect myself from altered checks?

To protect yourself from altered checks, make sure to write your checks carefully and completely, using a pen that cannot be erased. You should also monitor your bank account regularly to detect any unauthorized transactions.

What should I do if I receive an altered check?

If you receive an altered check, do not cash or deposit it. Contact the account holder and let them know about the alteration, and return the check to them.

What legal actions can I take if someone alters my check?

If someone alters your check, you can take legal actions against them by filing a police report and suing them for damages. You can also report the incident to your bank and request a stop payment on the altered check.