What is cheque fraud?

Estimated reading time
5 min

Even though cheque payments are becoming less common, cheque fraud is still occurring and costing Australians millions.
Whether it’s stealing a chequebook from your home, tampering with a chequebook or depositing a cheque made out to someone else, there are different types of cheque fraud you’ll learn about.
Keeping your chequebooks in a safe location and maintaining a record of your cheque payments are just some of the steps you might take to stay safe from cheque fraud.

According to the Department of Treasury, cheque payments are becoming less common in the digital age and account for just 0.1% of retail payments.¹

However, they remain a widely accepted form of payment for many older people, businesses and government agencies, which means they might still be a target for scammers.

In 2022, cheque fraud accounted for $2.44 million in stolen funds – so it's important to be able to spot the signs before it’s too late. We’re exploring the different kinds of cheque fraud you might encounter and provide practical ways to help protect yourself and your business.

What is cheque fraud?

Cheque fraud is when a payment is made with a cheque that has been altered, stolen, forged, or drawn from an account with insufficient funds to cover it.

The delay between when you receive a cheque, and when you will have access to the funds might allow someone time to commit fraud before you notice any issues. For example, if you receive a cheque for a large product order, you might not realise it’s fraudulent until after you have already shipped the goods, or provided a refund before the funds have cleared.

According to Ashley Pratap, an ANZ Cheque Fraud and Identity Fraud Officer, the development of new technologies such as mobile banking apps that allow cheque deposits, can create new opportunities for scammers to perpetrate cheque fraud. She says, “Scammers might deposit a cheque via the app and then also present it at a branch to deposit it a second time.”

6 types of cheque fraud

There are several ways that cheque payments might be used to deceive you out of your hard-earned money. These are some common ways in which the fraud might occur.

Cheque overpayment scams
Where someone pays for a service or product with a cheque that exceeds the amount on the invoice. They might then ask for a refund of the amount they overpaid. Later, you might discover that the cheque has bounced, potentially leaving you out of pocket for the entire amount.
Cheque tampering
Where someone materially alters an existing cheque. They might adjust the amount, the sender, or the recipient’s details. It can be very tricky to spot these changes with the naked eye.
Counterfeit cheques
These are cheques that have been created to closely imitate a legitimate cheque. The famous story of fraudster Frank Abagnale (featured in the major motion picture Catch Me If You Can) details his sophisticated counterfeit cheque scheme, but even these days a counterfeit cheque might be printed with slightly different bank details or replicate a legitimate cheque with an updated payee or amount.
Cheque payments with insufficient funds
Because there is a processing period between when a cheque is received and cashed, a person might write a cheque for an amount they do not have. This is called a ‘bounced cheque’.
Depositing cheques made out to someone else
It may be possible to deposit a cheque that is not made out to you if the recipient has signed the back of it, making it payable to you. This is called a third-party cheque, and different banks have varying rules regarding their acceptance. Third party cheques can be forged by a person committing the fraud, so banks are careful when they accept them.

For example, if you present a cheque which is payable to someone else ANZ may, at its discretion, refuse to accept that cheque for deposit, refuse to cash it or might require you to comply with additional conditions before accepting the cheque.²
Stolen chequebooks
If your personal or business chequebook is stolen by someone capable of forging your signature, then it’s possible that payments might be made fraudulently from your accounts.

Signs of cheque fraud

If a cheque appears to be materially altered in any way – like a carefully forged number or signature, or different fonts on the same cheque.
When someone pays you with a cheque for an amount well over what is due and requests a refund for the difference.
If the signature on the cheque does not match signatures on other documentation.
If you run a business and a customer pays with a cheque, then returns to buy more expensive items. In this case, the first purchase may have been an attempt to test your store policies.
If the figures on the cheque do not match the written amount

How you might avoid cheque fraud

Although spotting fraudulent or counterfeit cheques might be difficult, there are some things you can consider doing to help protect yourself and your business.

“Dispose chequebooks you no longer use in a safe manner,” explains Ashley. “If you’re not sure how to do this, consider bringing them to your bank.”
Settle your accounts regularly and on time to help you identify any fraudulent activity that might occur.
Never sign a blank cheque – only sign a cheque once you have all the details filled out.
Store your chequebook in a secure location, such as inside a safe, to minimise the likelihood of theft.
Tear up or shred any cheques you’ve made a mistake on – fraudsters might be able to use the information on cheques with errors to conduct fraudulent activity.
Maintain a record of your payments using the cheque stubs left in your chequebook. Watch for any cheques that have been removed from your chequebook without your authority.
Closely monitor your banking statements and cross-reference them with your chequebook, which is sometimes referred to as balancing your chequebook.
Thoroughly review the cheque before signing or processing – you might sometimes spot alterations to numbers or details.
Do not refund anyone for overpayment until you have successfully cashed their cheque and the funds have cleared.
Cross-reference any details on the cheque to ensure they align with the person or company making the payment.
Consider using electronic payment methods for high-value amounts.
Don’t provide the goods or services until the cheque payment has cleared.

What can you do if you think you’ve been scammed?

Contact the Australian Cyber Security hotline, 24 hours a day, seven days a week on 1300 CYBER1 (or 1300 292 371).
Help others by reporting to Scamwatch or to the Australian Signals Directorate’s Australian Cyber Security Centre’s ReportCyber.
For phishing or identity theft associated with government accounts such as Centrelink, Medicare, or Child Support, contact the Services Australia scams and identity helpdesk on 1800 941 126 or visit their website.
You can also contact IDCare, a not-for-profit organisation providing support to those experiencing identity and cyber security concerns.
Contact your bank immediately if you have shared personal or financial information.
If you’re an ANZ customer, you can report fraud or suspicious activity in multiple ways, such as through the ANZ app or by calling us

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