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Fraudulent Banking: Where’s My Money? Essay

1865 words - 7 pages

Every day we make purchases, use our credit cards, write checks, and shop online. Money becomes bigger each day and so does greed. As technology continues to improve and change over the years, so has banking fraud. Despite banks and businesses finding new ways to protect their customers from fraud, it still occurs all around the world. The main types of fraud can be classified as check fraud, credit and debit card fraud, identity theft, and corporate fraud. There is a lot that differentiates these types of fraud, the criminal’s actions, the repercussions of their actions, and the indicators of possible fraud. Thankfully, businesses and banks are becoming more proactive by informing customers about fraud and their characteristics, which are usually explained on their website.

Check Fraud
The first type of banking fraud is check fraud. This is the action of writing checks with insufficient funds or using checks that are counterfeit. The guilty party is usually the person who signs the check, but sometimes in can be a third party or someone who merely passes the check along to someone else (“Bad Check Laws,” sec. 1). Victims can be either businesses or individuals, but the same goes for being a criminal; either party can be considered guilty in a situation. Technology today enhances the chances of check fraud or any fraud, actually.
Some types of check fraud would be forgery, counterfeiting and alteration, paperhanging, and check kiting (“Check Fraud Prevention,” sec. 2). A website called provides a description of each type. Forgery is when someone signs a check and uses it without that person’s permission and most times without them knowing it. Counterfeiting is more complicated than forgery, but is still the same concept. It is the process of taking a copy of a used check and making a copy of it to reproduce it using a printer. This can be quite dangerous if the criminal is successful with the copy creation, because then they have a blank copy that they can continue to print off and use illegally (“WiseGeek-Check Fraud,” par. 1-3).
Check alteration is similar to forgery, but different from counterfeiting. Alteration is literally changing who the check is paid to and sometimes by how much. The guilty party can use simple household cleaners and chemicals to change this information on a check. The final type of check fraud is check kiting, which is probably the most complicated. In this instance, an individual opens two banking accounts. They will write a check from one account. The bank will process the check and discover there is not enough funds in the account. Before the account is overdrawn, the individual writes another check to cover the amount but puts it into the other account. This allows the individual to create illegal, fake balances in these accounts (“WiseGeek-Check Fraud,” par. 4-5).
If caught, there are civil penalties that are mandated by each state that can be ensued. According to Indiana Law, committing...

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