Cheque Fraud
A guide for small businesses

Cheque fraud costs businesses thousands of dollars a year. Unfortunately, business owners are forced to compensate for financial losses by increasing the price of items for honest and responsible consumers.

Although fraudulent cheques cannot be entirely eliminated, the risks inherent in accepting a cheque can be reduced by adopting thorough checking practices.

Ways to limit the number of fraudulent cheques

1. Make sure the information offered is current and matches the physical description of the customer. Match the signature on the cheque against the signature on the identification. Ensure the customer signs the cheque in your presence.
2. Do not accept cheques that have been drawn in a bank interstate, even if the cheque is imprinted with a local address for the account holder.
3. Ask the customer for their residential address if the only address provided on the cheque is a post office box number or another non-specific address. Ask the customer if the address on the cheque is their current address and ask for their phone number. Write these details on the back of the cheque along with the initial of the employee accepting the cheque.
4. Do not accept post-dated or pre-dated cheques.
5. Be cautious of persons who buy an item with a cheque and then return later to purchase more items. In some cases the initial purchase may be a chance to test out your policies regarding the acceptance of cheques. Once the offender determines that you will accept a cheque without question, the offender will return to purchase items of higher value.

Customers are important to local merchants. The vast majority of customers are responsible people, however, a minority purposely use 'bad' cheques.

Awareness of interstate offenders

A business owner should be aware of persons who drive interstate in order to purchase items that are commonly available in their local city or town. The most common reason for this occurrance, is that the offending person is notorious for using bad cheques in their local community, forcing the offender to travel interstate to use fraudulent cheques.

Business owners must remember that they have no obligation to accept cheques for any purchase. As a business owner or employee, if you feel uncomfortable about accepting a cheque from a customer, you have the right to ask for further information or identification.