Cheque Fraud

Cheque fraud can easily occur and can cost an organisation significant amounts if appropriate controls are not in place.

Cheque fraud can occur in a number of ways:

• Using false invoices to have a cheque paid in favour of the false business;
• Changing a legitimate cheque (payee and amount) without having authority to do so;
• The theft of cheques and the use of those cheques at a later time;
• Duplication of cheques, especially if they are preprinted by the company;
• Depositing a cheque into another account without authority.
  

To prevent cheque fraud, there are a number of possible controls:

• Reconcile the bank account on a regular basis;
• Never sign blank cheques. Only sign cheques when details have been completed and there is documentation supporting the payment;
• Limit the number of signatories on the account and remove signatories when they are no longer required;
• Ensure that cheques require at least two signatories;
• Keep all cheques in a safe place to deter theft;
• Avoid the use of acronyms when completing the Payee;
• If you are expecting more cheques and they have not arrived, contact the bank and cancel them.