What Are the Dangers of Writing Checks?

Business and personal checks offer alternatives to debit and credit cards if you want to pay someone with money from your bank account. But they come with their own set of dangers.

Identity thieves can forge them or steal your personal information and try to withdraw money from your bank account or claim Social Security benefits on your behalf. And someone can cash your money even if you don’t owe them anything. You may also mistakenly write a bad check, attracting additional bank and merchant charges or criminal charges. And even if someone else does so without your consent, their actions may attract criminal charges, fines, and possible jail term against you.

According to the Federal Reserve, 3.657 billion commercial checks were written in 2021 alone. So, clearly, people still trust them.

However, the safety they offer bank account holders varies. Paper checks are the most dangerous because you can easily lose them or expose the information on it to the wrong people and become an identity theft victim. On the other hand, cashier’s checks are the safest since the money is drawn from the bank’s own accounts, and not yours. So, banks will be very diligent about transferring money to a payee.

Identity thieves can steal financial information from your check then steal your money.

Personal checks contain the names of financial institutions, routing numbers and the bank account numbers of the issuer. Therefore, fraudsters may use that sensitive information to create counterfeit checks, shop online with your money or steal the money directly from your bank account and redirect it to theirs.

If check fraud occurs and identity thieves steal your money or cash your check because you forgot to write the recipient’s name, you will not only have trouble paying your bills, but also be left on the hook for their bills.

It’s even worse if check scammers claim Social Security checks on your behalf. According to the Social Security's Office of Inspector General, between 2013 and mid-2018, 20,878 beneficiaries lost $33.5 million worth of benefit payments to identity thieves. You may find yourself in the same boat, missing your much-needed retirement benefits.

Alternatively, identity thieves could illegally claim Social Security benefits using your details, putting you in serious trouble that may take a lot of time and money to get yourself out of.

It is also dangerous to write checks when there are insufficient monies in your bank account. If fraudsters have already made away with your funds, you could end up writing a bad check, causing the bank and vendor to charge you additional fees. The payee may also sue you for writing a bounced check, leaving you liable for legal costs. Also, you could attract felony or misdemeanor charges, depending on the size of the check.

On the other hand, if you are the recipient of a forged or bounced check, you will not receive what is due to you unless you take legal measures against the check issuer.

According to Forbes, writing a check safely involves observing these rules:

• Never write blank checks.
• Always use a pen to ensure your information is never erased.
• Never sign a check until you have written the recipient’s name and amount.
• Keep a record of the checks you write.
• Avoid designating the check as payable to cash.
• Keep track of your check until you hand it over to avoid adjustments.

It is also essential to keep your checkbook away from prying eyes.

It is best to use checks when large sums of money are involved and handling cash would be dangerous, such as when paying a down deposit for a car or home. Also, paper checks may be the best option if the payee lives far from you. You can mail them their payment via secure mail.

Some landlords also require rent money via checks. So, you may have no choice but to write one. Also, when dealing with people without bank accounts, writing a check may be the best way to pay them other than using cash, since they can obtain money from check cashing stores.

If you don’t want to risk money leaving your checking account without your consent, you should consider the following alternatives:

• debit cards
• credit cards
• money orders paid via the post office
• your bank or credit union’s online bill pay services for recurring expenses
• electronic payments such as electronic funds transfer (EFT) for bank-to-bank transactions
• digital wallets available as mobile payment apps such as Venmo, Google Pay, etc.

It is important that you understand the dangers of writing checks and take measures to protect yourself. By doing so, you reduce your chances of losing money via scams and getting into legal trouble. Also, you will be less likely to watch your credit scores plummet due to debts accumulated by scammers.