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Think Before You Write That Check

Written by Nickel - 19 Comments

Bank Deal: Earn 1.00% APY on an FDIC-insured savings account at Barclays.

In the past, I’ve wondered about the risks inherent in check writing — after all, every check has your name, address, bank routing number and account number printed on it, and it comes complete with your signature. Sounds like a recipe for disaster if it were to fall into the wrong hands… After all, this is exactly the type of information (minus the signature) that got out when CardSystems was hacked. So what should you do to protect yourself?

I’m not going to suggest that you stop writing checks outright for a fear of having your checking account compromised, but it seems like you should protect this information as jealously as you protect your credit card data — and perhaps moreso, as bank accounts don’t have the same level of fraud protection as credit cards do.

Here are just a few examples of things that I wouldn’t feel comfortable writing a check for: eBay purchases, itinerant laborers, door-to-door sales, etc. I actually don’t make a habit of hiring itinerant laborers or buying from door-to-door salesmen at all, but if I did I sure wouldn’t want to hand out my banking information (nor would I feel comfortable handing over my credit card number). I always pay for pizza delivery with a check, but maybe I should use cash — this seems like a great line of work if you want ready access to people’s banking info. When it comes to eBay, I always use the much maligned PayPal, or use a US Postal Service money order if the seller requires it. Maybe I’m just being paranoid but, as they say, an ounce of prevention is worth a pound of cure.

Update: This entry is featured in the Carnival of Personal Finance over at Smart Money Daily.

Published on July 1st, 2005 - 19 Comments
Filed under: Banking

About the author: is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

Comments (scroll down to add your own):

  1. I think they should revise the way checks work, there has to be some sort of encryption of the number or something – at least add a step to the process of calculating the account number. Sure someone will be able to crack it, but it’ll cut down on crimes of opportunity.

    You should be using a credit card anyway.

    Comment by Anonymous — Jul 1st 2005 @ 8:02 am
  2. Currently my checking account is with BankOne/Chase. I know that when I cash a check (and not deposit the full amount) they ask for picture ID & record my DL# with the transaction. Of course, that is only a safeguard for cashing the check and not for obtaining the account information…

    Comment by Anonymous — Jul 1st 2005 @ 1:32 pm
  3. The really evil criminals will not merely steal all the money you _have_ when they get your checking account information, they will steal thousands of dollars you _don’t_ have…and then your bank will come after you for the difference, and you won’t be able to open another checking account until 7 years after you finish paying it off.

    It was a very, very expensive lesson, but I learned it well. When paying someone in whom your trust is less than complete and absolute, use a credit card or money order or cash. The numbers printed on the bottom of checks are more than sufficient to destroy one’s life in a single stroke, and (unlike with a credit card) once the money is gone, your bank will not help you get it back.

    Comment by Anonymous — Jul 2nd 2005 @ 4:53 am
  4. We not have such fear of cheques. Rather our cheque books even though have such enclding identification number, it still neeeds to be physically signed.
    For my knowledge, will it be possible for you to send me a copy of one of your cheques. you can scan it and send it to me, if it not too risky.

    Comment by Anonymous — Jul 3rd 2005 @ 2:59 am
  5. Matt: That sounds absolutely horrible! I guess I’m not just being paranoid. By the way… I just ran across another place that you should use cash: roadside fireworks stands.

    Comment by Nickel — Jul 3rd 2005 @ 3:28 pm
  6. cvrk: Ummm… No, I won’t scan one of my checks and e-mail it to you.

    Comment by Nickel — Jul 3rd 2005 @ 3:28 pm
  7. The verification systems in place on checks are only ever used for checks over $15,000. Look it up, my number may be a little off, but it’s right. Anyway, does the bank really have everyone’s signature on record (possibly on paper, but probably not electronically) and, more importantly, will they really verify that check you signed for $100? No.

    Comment by Anonymous — Jul 3rd 2005 @ 6:46 pm
  8. Thanks for the info, jim. By the way, if you want to scan one of your checks and send it to cvrk I can set you up with the necessary contact info. 😉

    Comment by Nickel — Jul 3rd 2005 @ 7:12 pm
  9. Avoid checks whenever possible.

    In the mid 90s (94-95) I was employed by a woman who ran a number of small businesses out of her home as a generic tech. One of the things she needed was to be able to run checks monthly. Since she ran multiple businesses she didn’t want to run checks on pre-printed checkstock, as that would lead to wastage, but rather on blank checkstock.

    We succeeded in doing that. Blank check stock was easy to come by. Magnetic toner was easy to come by. MICR fonts where a little harder, but not bad. Layout standards for checks where easy to come by. Laying out the checks (in WP 5.1) took some trial and error. Scanning the signature wasn’t hard. All told, after not terribly much work (10 years ago) we could print her checks on blank check stock.

    It occured to me at the time that it would be just as easy for an unscrupulous person to take *any* personal check I wrote and set up shop writing checks against my account. Checks that would clear, in some cases faster than the checks I wrote myself.

    Ever since then I’ve basically considered every check I wrote to be an opening for unlimited drawing power against my checking account. Since the check would bear my signature, I doubt very much I would get my money back from such a theft.

    As you may imagine, since then I don’t write many checks. Today I put almost everything on credit cards for payment, and use online bill pay to pay off my credit cards. Remember, writing someone a check is orders of magnitude more dangerous than giving them your credit card number.

    Comment by Anonymous — Jul 11th 2005 @ 10:37 pm
  10. Yea, I’ve been very hesitant to write checks for anything besides rent these days. I prefer to pay cash over check, even though I lose tracking ability. No way do I want to give out my account number and info more than I have to. You’d think routing/account numbers on checks would be masked somehow, to at least make it harder for thieves.

    Comment by Anonymous — Oct 23rd 2006 @ 12:22 pm
  11. Good info. That is exactly the way I think when purchasing anything.

    Be careful of gas stations that require you to leave a credit card at the counter while you pump. I’ve been burned by that one.

    Bottom Line:


    Comment by Anonymous — Jul 11th 2007 @ 9:17 pm
  12. Cash is safer than credit card, credit card is safer than debit card, debit card is safer than check. Yet many people, out of tradition I suppose, still feel safer writing checks than using credit/debit cards. Hmm, maybe it’s just that credit card fraud is much more rampant these days? I just read that with debit cards, if you notify your bank of fraudulent charges within 2 business days, your loss is limited to $50. If you notify them after 2 days but before 60 days, your loss is limited to $500. After this, you can lose all of the money in your account. So keep an eye on those statements if using a debit card. With a check, I guess you’re screwed if someone were to counterfeit one and draw down your entire account. BUT, how common is this, and don’t these criminals face a bigger chance of getting caught than if they had just gone for credit/debit card numbers?

    Comment by Anonymous — Sep 5th 2007 @ 11:45 pm
  13. Scott: What happens if you lose your cash? Or if it gets stolen? It’s gone forever. That’s not the case with credit cards. I don’t view cash as a particularly “safe” way of handling money (although it admittedly doesn’t carry a risk of identity theft).

    Comment by Nickel — Sep 6th 2007 @ 7:31 am
  14. I don’t know if this carries any weight or not, but think about it –

    Checks have been around a lot longer than credit cards. Has anyone ever heard of check crimes with bogus checks? I haven’t and I’ve been following fraud issues for years. That leads me to believe that checks just aren’t that easy to commit crimes with.

    But whether that’s true or not, the thing to remember is that you are protected by Federal law against fraudulent use of your credit card. There is no such protection for your checking account aside from the FDIC coverage that kicks in if your bank goes belly up.

    Comment by Anonymous — Sep 6th 2007 @ 7:40 am
  15. The guy whose life is featured in “Catch me if you can” was doing check fraud ARE bogus checks and we saw it every day at the credit union where I used to work. People have the capability to make real-looking checks with today’s computing technology.

    The people who make the bogus checks have even put bogus phone numbers for those companies or financial institutions that check those things. If you get a check that you are unsure of, look up the phone number of the financial institution online or elsewhere and do NOT trust the number on the check. If it’s bogus, you’re likely to get a line set up just for that. If someone doesn’t answer with their financial name, etc. that’s a clue as well.

    It is hard to stay on top of the bogus check industry, but clues include a missing MICR number, wrong routing numbers (there are places to look these up for banks, etc.), missing bank information, etc. Please don’t believe that fake checks aren’t out there. They are and the people making them get better every day.

    Since I mentioned the guy who was featured in the movie “Catch me if you can,” I should also mention that he today works with the FBI and other organizations to help them detect and avoid check fraud and identity theft. He has a book that details how HE created fake checks (as a teenager!) and other information on identity fraud as well as how to avoid being caught by these scams by check and money order. (Yes, there are fake money orders AND traveler’s checks running around out there, too. If in doubt, take the person to the bank/credit union and have trained people determine if the negotiable item is real or not.)

    Please be aware of the real risks inherent in today’s technologically advanced society that surround checks and other paper negotiables. I could go on about check washing, etc., but the fact remains that check fraud, bogus items like this, lottery scams, etc. are real and that they happen EVERY DAY.

    Comment by Anonymous — Oct 29th 2007 @ 6:39 pm
  16. Checks and bank routing #’s not being encrypted is one of the worst things that is wrong with our banking system.

    Nightline or 60 Minutes did a story where they questioned the safety of checks. They opened a bank account and then went to the office supply store and got blank check paper. Using that and the supplied software they then made up checks where ALL of the information EXCEPT for the account number and routing number were wrong.

    They were able to cash these bogus checks almost everywhere INCLUDING the bank that they were drawn on.

    The banks declined to comment.

    When a thief has your numbers they don’t even need to write checks. They can set up an automatic withdrawal that the bank PRESUMES you allowed it and makes it hard to stop it. That may be changed now but a few years ago they just referred you back to the merchant.

    I stopped using checks years ago for these reasons. I do ALL of my transacting through ATM/Credit cards, online bill pay, and PayPal. Very very rarely I will give someone my account information so that they can wire me money. In those situations I trust the other party enough to feel secure.

    Years ago I used a service on line that would print and send checks out. The receiver could opt to get the check by mail or through email and could then print the checks on normal paper and the banks would accept it. I signed up all my bank accounts just to prevent anyone else from doing it.

    Checks are really dangerous in today’s world. They are an outdated form of payment. I understand that there are still a lot of situations where they are convenient but for me personally they are obsolete.

    Comment by Anonymous — Oct 13th 2008 @ 11:23 pm
  17. I think, in 99% of life’s situations, checks are the wrong choice. If you write checks at the grocery store, i consider you a waste of space on this earth! Slow and painful to be behind in line.

    My strategy suggestion would be this: carry no more than $20 in cash, and a couple of credit cards. Checks? Besides rent, (being that they may not accept online payments), or gov’t offices (where occasionally there’s a surcharge for credit cards), checks belong in museums for future generations to learn about.

    Comment by Anonymous — Dec 11th 2008 @ 6:14 pm
  18. Never write a check for furniture bought by truck sales claiming to be Thomasville. For that matter, don’t buy the furniture. If you have any problems with the furniture, like we did, you will never hear from the company again.

    Comment by Anonymous — Jan 16th 2009 @ 1:04 pm
  19. I hope that you will acepted checks when I don’t have any credit cards to have any clubs that will except it. What should do when I have want to be a music and DVD that will take oly credit cards to which I can’t have.

    Comment by Anonymous — Oct 31st 2009 @ 9:17 pm

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