Imagine receiving a check only to get it stolen and cashed. The check bearer would certainly be distraught, and would possibly be thinking, what next? If this is the case, keep reading to find out what happens in this scenario.
The moment you get a check stolen from you, you should immediately notify the drawer so they know you weren’t the one who cashed the check (if it has already been cashed). It is necessary to contact the authorities and file an identity theft affidavit. The bank would investigate who cashed the check. So it is possible to get your money back.
Read below for more information on what to do about stolen checks.
How a Stolen Check is Cashed?
When writing a check, the drawer gives a specific order to the bank to pay a specific sum to a specified person called the payee.
The check can be drawn from any financial institution. When a stolen check is cashed, you often wonder why the bank couldn’t detect it. The thief could be anyone, someone close to you, capable of forging your signature and identity. It could be a total stranger, an expert at identification forgery.
Nevertheless, it is possible to cash a stolen check. More so if the drawer signed a blank check.
What To Do After The Check Has Been Stolen
- Inform the payor/drawer.
- Inform the drawee.
- Inform the authorities.
The Payor
The payor is the person who has written the check. It is necessary to inform the payor first because they would be able to determine whether the check has been cashed or not from their bank.
The Drawee
Once the drawee has been identified, investigations will be started by the fraud detection unit of the bank. Identification theft is a punishable offense. The bank can succeed in finding the check thief, and you will have your money refunded.
The Authorities
The payee would have to report to local authorities for more investigation because it was their identity that was forged. That means someone is walking around, capable of forging your signature anywhere, anytime.
What The Bank Does During Investigation
Usually, when banks detect suspicious activities on a holder’s account, like frequent large payments, the holder is notified. So that the bank would make sure no fraudulent activities are happening.
However, in a stolen check investigation, the bank wouldn’t contact the payor, because they wrote a check which was cashed, the only problem is it was cashed by the wrong person.
The bank takes measures by blocking the drawer’s account for the time being. Then they seek to find the identification of the person who came to cash the check by going through security footage and whatnot. It is also possible for the thief to deposit the check online. Online deposition of checks is convenient and doesn’t always go through. Sometimes the bank would ask for the check to be brought to any of its branches so the issue can be resolved.
The bank where the check was cashed would have its records. When someone comes to cash a check, the person is often required to show a government-issued id, and the transaction is recorded.
When the check is worth over $10,000, it would be recorded by the Internal Revenue Service (IRS) which is responsible for the imposition of taxes in the United States.
What Happens When the Check Hasn’t Been Cashed
When the check is missing or stolen and hasn’t been cashed, the payee should inform the payor, so they can request their bank to stop payment.
Stopping payment of a check can last up to six months. This usually attracts fees, depending on the bank and its policies.
By stopping the payment, when the thief eventually decides to cash the check, they would be unable to, because the account would be disconnected from the transaction.
After six months expire and the stolen or missing check still hasn’t been found, the bank would ask you to pay another fee to have the payment stopped again. The fee can range between $25 and $30, depending on the bank.
Better still, closing the account and opening a new one might be a better option for the drawer of the missing check.
Usually, banks don’t ask for fees to be paid if the missing check is a blank check.
Conclusion
Sometimes, it is unlikely for a stolen check to be cashed, but it is possible. In any situation, the first thing is to notify the necessary persons and wait hopefully on a result from the investigation.
Frequently Asked Questions
- When a check is deposited online how long will it take before it is available?
Once the check has been deposited successfully, the funds should reflect in your account by the next day or two. However, they are not available for withdrawal for a while.
- What happens if a check I cashed turns out to be fraudulent?
When a bank cashes a check to the payee, they have done everything right to see the check is authentic. If the check turns out to be fraudulent, the bank can take back the money in your account.
- Do I need to report a missing check after it has already been deposited?
Yes! A check has the drawer’s bank and sometimes personal information. You would have to inform the drawer so they can monitor their account, or even close it to prevent fraud.
- What happens when a drawer doesn’t have sufficient funds in their account after issuing a check?
The check would ‘bounce,’ if the drawer doesn’t have a second supporting account. The payee can be paid by the payor before the issue is resolved.
