How To Protect Yourself From Cheque Frauds?

Even with strong security measures, fraudsters are still able to find new ways to scam people using forged or fake cheques

Frauds involving banking transactions are reported regularly. One of the common crimes in this context is cheque fraud. While forged signatures are common, these are not the only types of cheque frauds. You can face various other threats such as fake cheques, refund scam, impersonation, cloned cheques, etc. Let us take a look at how you can protect your money from cheque frauds.

Use Positive Pay System (PPS) – To deal with cheque frauds, the Reserve Bank of India (RBI) has introduced a more secure system known as Positive Pay System (PPS). Under this, cheques above Rs 50,000 will need to be verified by the issuer. This can be done via various methods such as mobile banking apps, net banking and OTP verification. PPS essentially works like a 2-factor authentication system. Until the issuer approves the transactions, the bank will not release the funds. With PPS, risk of cheque frauds can be reduced significantly.

Ask for cheques with special security features – Fraudsters can clone cheques by using advanced printers and other tools. This is something similar to how criminals make fake currency notes. To avoid such risks, you need to have cheques with unique safety features. For example, the cheque should have a CTS-INDIA watermark. Similarly, other security features should be there such as micro lettering, UV logos and perforated edges. A Void Pantograph shows ‘VOID’ on the lower left corner if the fraudster tries to copy the cheque. If you are using old cheques, you need to get new ones with these advanced security features.

Cheque refund scam – Fraudsters utilize this technique if you are expecting a cheque from another individual or company. At first, the fraudster will send a cheque that has a larger amount than what you were supposed to get. In the next step, the fraudster will contact you and tell you that the larger amount has been entered by mistake. He will then ask you to refund the excess amount via digital payment method. Since the fraudster may appear genuine, many people fall for this scam. They end up paying money even before the cheque is submitted into the bank.

Impersonation – Fraudsters can impersonate genuine individuals or organizations to whom you may be writing a cheque. This can be done by intercepting email systems or creating fake email IDs that look similar to that of the genuine recipient. You essentially end up writing a cheque to the fraudster’s account instead of the genuine person you were intending.

To prevent such cheque frauds, you need to store your cheques in a secure place. Unused cheques should be shredded or burnt to avoid the risk of copying. Also, you should avoid keeping pre-signed cheques. If you notice anything doubtful, you should immediately call your bank to block the transaction. If the crime has already occurred, you can file a complaint with the Cyber Crime Cell at www.cybercrime.gov.in.