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Eight Tips for Writing Cheques

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Cheques are often used to perpetrate frauds, frequently costing from tens of thousands to millions of dollars.

Many of the frauds could easily be avoided if the cheques are written carefully. These tips will help you avoid being defrauded through cheque alterations:

1. Avoid Acronyms 

Many notorious frauds have been perpetrated by adding extra letters to an acronym so that the cheque becomes payable to someone else.

For example the payee S.A.R. was changed to S.A. Robinson to allow the perpetrator to get away with over a million dollars.

Acronym cheques are said to be often little better than cash cheques. 


2. Erasable Ink

This may sound very obvious, but we are aware of a number of frauds that have been perpetrated by a person erasing the payee name and substituting another.

In one fraud the cheque writer was unaware that the pen’s ink was erasable. His pen had been inadvertently swapped with his daughter’s.

She used the wrong pen during exams, which resulted in her panicking and doing poorly. Her father found it harder to face her than his boss.

Experts have advised that it is better to use a normal pen that leaves an indentation in the paper, rather than a felt tipped pen.


3. Spaces 

Do not leave a large space before writing the first word in the amounts.

Frauds have been perpetrated by adding an acronym or name in the space before the original name.

Amounts have also been altered by adding a word or two before the original amount stated.

It is invariably easy to add a figure before the first figure in the amounts box, so that the written and numerical amounts agree.


4. Signing Alterations 

The golden rule is that any alterations to a cheque should not be signed. It is better to keep or destroy the cheque and issue a new one. 

If an alteration is signed it is very easy for somebody to change the alteration, and the signature will usually be taken as authorising the change. 


5. Lines 

Use lines after writing or the word “only” after the name of the payee or the written amount. 

There have been frauds perpetrated by adding a dash and another name after the payee. Bank tellers have allowed cheques like this to be deposited into the account of the second name on the basis that there were two names. 


6. Crossings  

Put an adequate crossing on cheques so that they at least have to paid into a bank account or preferably into the bank account of the payee only. 


7. Storage 

Cheques should be kept in a secure place. 


8. Signatories 

Lists of cheque signatories should not be kept near the cheques.


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For more tips, advice and practical pointers see Fraudproof Your Business Manual.