Downs Law Firm, P.C.

personal check

How Safe is Paying with a Personal Check?

Please Share!
Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on email
Email

Every time you pay by check, you hand your bank account numbers to a stranger.

Is paying with a Personal check a good idea?

According to the Federal Reserve, more than 14.5 billion checks, totaling $25.8 trillion, were written in 2018. Although that number has decreased by about 7% every year since 2015, checks are still being written by Americans, including seniors.

Money Talk News’ recent article entitled “Is Writing a Check Still Safe?” says that in an era of identity theft and bank fraud, how safe is writing a check? Remember, when you pay by personal check, you are handing a piece of paper with your bank account number and other personal details like your name and address to another person. This is often a stranger! Once the data is available, you can forge personal checks, and identity thieves could steal your personal and banking details from a paper check. Let’s look at what you need to know about writing a Personal check and how to minimize your risk.

Banks apply security measures, like watermarks and gradient backgrounds to prevent checks from being reproduced by fraudsters. This also lets financial institutions and businesses validate paper checks easily. In 2018, measures such as these prevented 90% of attempted fraud, according to the American Bankers Association. Nonetheless, check fraud—which includes forgery, theft, and counterfeiting—accounted for $1.3 billion that year.

Often purchases are made online using only the checking account bank information and account number.

Know that the risk of trouble increases if you don’t specify a recipient on the check. If you write a check to “cash,” anybody who gets a hold of it could cash it. If you need cash, it’s safer to use your debit card at an ATM or visit your bank and write a check out to yourself.

Seniors are more likely to write paper checks still, and because the elderly are more likely to be the targets of financial fraud than the general population, check-writing can compound their risk. Here are some steps you can take to safeguard your information and reduce your risk of fraud:

  1. Complete the “payee” line in full, along with the current date on every check you write in ink.
  2. Restrict the information pre-printed on your check to just your name and address, and don’t include your birth date, phone number, or driver’s license number. Of course, if a merchant requires these details, you can always write them in.
  3. Keep your checks in a safe place, not in your purse or briefcase, which can be lost or stolen; and
  4. Watch your bank account activity regularly. By keeping an eye on your finances, you also reduce your risk of fraud.

Even if you prefer paying electronically, you probably shouldn’t dismiss checks altogether. There are small businesses that still don’t accept debit or credit cards. If they do, they might charge a fee for it.

Personal checks also offer a paper trail, so they’re usually preferred for a down payment on a home or an IRS tax bill. Therefore, if there’s an issue, you’ll have a copy of the deposited check and a record of when payment was made, received, and applied.

Of course, no payment method is 100% fraud-proof. However, with proper handling, paying with a personal check is an extremely safe banking method, as they have been for many years.

Reference: Money Talk News (Feb. 17, 2021) “Is Writing a Check Still Safe?”