There are three types of cheque fraud in the UK; counterfeit, forged, and fraudulently altered.
Counterfeit cheques are manufactured or printed on non-bank paper to
look exactly like genuine cheques and are drawn by a fraudster on genuine accounts held by the bank.
forged cheque is a genuine cheque that has been stolen from an
innocent customer and used by a fraudster with a forged signature.
fraudulently altered cheque is a genuine cheque that has been made out
by the genuine customer, but a fraudster has altered the cheque in some
way before it is paid in, e.g. by altering the beneficiary’s name or the
amount of the cheque.
The cost of cheque fraud
Following year-on-year increases in 2007 and 2008, 2009 saw a 29% drop
in cheque fraud losses.
The overwhelming majority of attempted cheque frauds are stopped before the cheque is paid. The industry’s ongoing work to prevent cheque fraud – particularly through its use of fraud prevention profiling – has played a key part in driving these losses down.
The continuing decline in cheque usage has also played a part in the decrease in cheque fraud losses.