Identity Theft by Check Fraud
Many people are careless with their checkbook. They may be sloppy about recording checks when they write them, or about balancing it and reconciling it with their monthly statements. As a result, they are setting themselves up for unpleasant surprises. The most obvious one is a bounced check, but careless use of a checkbook can also leave one open to identity theft.
Every time you write a check, particularly to a merchant with which you don't regularly do business or which you put in the mail, you run the risk of identity theft through check fraud. A criminal who gets one of your checks can do an appalling amount of damage with it.
First, every check has your bank account number on it. By using a stolen check, a thief can get into your checking account and drain it flat before you even notice. The next thing you know, you're dealing with bouncing checks and angry merchants. Although you know that you did not make the withdrawals that are appearing on your account, the bank is going to want proof before they give you back your money, and proving a negative is extremely difficult. In the meantime, you're out your money and your creditors have little sympathy for your status as crime victim. They want their money now, and you won't have any more until next payday -- at which time you're going to need a new bank account with new numbers that aren't compromised.
If it isn't bad enough to have someone use the bank account numbers on one of your checks to drain your entire checking account, you are also giving out all the personal information printed on your check. You have your own name, address, and phone number, and may even have your spouse's name on the checks as well. Now thieves are able to steal two identities at once.
Some people even put driver's license numbers and Social Security numbers on their checks. With that information, a thief can get into your home, your bank accounts, your credit cards, and even some of your utility bills. There is really no reason for you to place either bit of information on a check. If you are asked for it by a merchant, then you can write it in yourself. Even then, make sure that you really are required to put it down.
Because of the sheer ease with which a criminal can use a stolen check to commit identity theft against you, be very careful who you give checks to. Although debit cards carry their own risks in regard to identity theft, they are often a safer way to pay for purchases from your bank account. If you can use a credit card wisely and avoid carrying a balance long-term, you may find that the fraud protection of a credit card is worth it -- but just be careful how you pay off your balance each month. The check you mail to the credit card company could be your undoing. You may also look into buying stored-value cards from your financial institution. If they are lost or stolen, you'll be out that money, but the thief cannot use them to invade your entire financial life and make a mess of it.
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