Oct 10, 2019
TD Explains: Recognizing cheque fraud
How it works
Cheque fraud happens when a fraudster alters legitimate cheques or falsifies cheques in an effort to scam individuals for access to their money. While more and more people are banking electronically, it's important to remain vigilant about cheque fraud as criminals are still using it to take advantage of their victims:
It's important to be aware of the circumstances under which you accept a cheque as recipients are responsible for any funds deposited into their account. Deposited funds are subject to the bank's hold policy and available to a customer's account once the hold is lifted (if applicable). Importantly, a cheque may still be returned for any number of reasons, including if it is determined to be fraudulent, even if the funds are made available. If this happens after the funds have been used, the bank has the right to recover the amount of the cheque from your account.
Providing immediate access to funds from a cheque is a credit decision that is applied differently for each customer based on a variety of factors including credit history, the length of time a customer has banked with us, and the current status of a customer's existing accounts.
As fraudsters employ more creative and sophisticated methods for scamming individuals, it's important to have conversations with friends and family members to help them better understand how to identify, report, and avoid becoming a victim of fraud.
Tips to consider: Protecting your cheques from being used fraudulently
Make sure to keep your cheques in a secure location where they cannot be easily obtained. Destroy any unused cheques from closed accounts.
Reduce the use of cheques and opt for electronic payments like wire payments, direct deposit and pre-authorized payments instead. The money deposited comes directly from the payor and is credited directly into the account of the payee.
- Check your account statements regularly to ensure that there are no discrepancies.
Tips to Consider: Protecting yourself from fraudulent cheques
Whether you are accepting funds or making payments, it's always important to be comfortable with the transaction and aware of who you are accepting cheques from.
A general warning sign is when someone gives you a cheque as "payment" and asks you to send some of the funds elsewhere.
If receiving funds as payment for a sale or work completed, do not accept cheques. It's advisable to accept only a guaranteed form of payment instead (e.g. cash, bank draft, wire, etc.).
Don't accept cheques that have been altered in any way.
If you or someone you know have been a victim to a scam, report it to your local police, as well as the Canadian Anti-Fraud Centre.