Any change in the writing on a check made without the authority of the drawer or any other party to the check, such as an endorser, is considered an alteration.
Raising or otherwise changing the amount of the check, changing the name of the payee (the person to whom the check is given), or making other changes on the check, such as changing the date or the name of the drawee (the person from whose bank account the check is withdrawing funds) or payor bank, constitutes a material alteration.
Checks are frequently altered for fraudulent purposes.
The phrase “forged check” refers to a check on which the drawer’s signature is falsified or unauthorized. As far as the drawer whose signature is forged is concerned, such a check is useless.
In most cases, the drawee bank that pays a forged check is liable for the resulting loss. A counterfeit check is considered to be the same as a forged check.
What Changes Do Not Constitute Alterations?
In general, changes to the check that do not change the contract of which the check is a representation are not material.
For example, because of the commonly accepted rule that words control numbers on ambiguously written checks, there is no change when the number of checks in numbers is changed without changing the written-out amount.
Can I Change the Amount or Date on a Check?
In the financial industry, altering a check amount and forgeries are important problems.
In order to prevent such criminal activity, your bank will most likely return an unreadable check, a check that was filled out erroneously, or a check that appears to have been altered.
Although the ideal method for rectifying a mistake on a check is to invalidate it and start again, certain banks will accept amended checks if done correctly.
Review each new check order to ensure the written information is proper to maximize the chances of approval.
Always use a non-erasable, blue or black ink pen to make repairs. Never use whiteout to try to remove a mistake.
Contact your bank to learn how your financial institution handles errors. Bank policies govern whether a mistake can be corrected or whether a check is invalid. In every scenario, the bank has the option of accepting or rejecting the check.
The most common correctable errors are mismatched written and numerical quantities and erroneous dates. When check amounts differ, the written amount becomes the legal amount.
Words are always valued more than numbers in state statutes. Enter the correct total above the incorrect numerals, circle the right amount, and initial the change to correct the numeric amount.
If the written amount is inaccurate, there is no way to correct it in a way that the bank will accept. You’ll have to cancel the check and start anew.
Who Has the Burden of Showing That There Is an Alteration on a Check?
The individual seeking to avoid liability in an altered check fraud case generally bears the burden of establishing the existence of the material or improper alteration. Many courts suggest that where there is an alteration, the burden may be shifted.
In other words, where there is visible evidence of a change, a bank or holder cannot claim ignorance of the change.
What Are My Rights If I Have Unknowingly Received an Altered Check?
In most cases, the consumer must disclose fraud within a year to ensure that the loss is recovered.
If a bank suspects a check has been tampered with, it might refuse to honor it.
A person taking an altered check for value in good faith and without noticing the alteration may enforce their rights to the check in its original state.
If a person deliberately deposits a forged check with the goal of obtaining money that is not theirs or deceiving a bank staff, they will typically face criminal charges. Check fraud penalties may include incarceration or criminal fines.
The severity of the penalty is usually determined by the amount of money involved in the fraudulent act. Typically, the more money involved, the worse the criminal consequences.
However, if a person mistakenly deposits a fabricated or forged check, their ignorance may serve as a defense. This is determined by the facts of the case as well as state criminal defense statutes.
Check fraud penalties vary depending on whether the crime is classified as a misdemeanor or a felony. Misdemeanor check fraud is usually punishable by less than a year in jail and some criminal fines. Felony check fraud can result in more than a year in prison and higher criminal fines.
In either case, the defendant may be required to make restitution to the victim.
The amount involved determines whether a check fraud crime is a misdemeanor or a felony. For example, check fraud involving less than $1,000 can result in a misdemeanor charge in some states.
Check fraud involving more than that amount would subsequently be considered a felony. As a result, check fraud may be considered a “wobbler” offense in many states, which means it can be tried as either a misdemeanor or a felony, depending on the circumstances.
Check fraud, like any other sort of crime, may have several defenses. A common defense to such a crime is coercion. This is when a person is coerced into committing check fraud by the threat of danger (for instance, if a person is forced at gunpoint to forge a check). Other defenses may be available depending on the jurisdiction.
A prosecutor must show that the fraud was intentional when proving check fraud. That is, accidental changes or alterations to a check may not be sufficient to constitute check fraud. The fraudulent use or alteration of a check must include some element of deception and purposeful intent.
For example, if a person had the authority to issue themselves a check and there was no deception or misrepresentation, there may be no basis for a check fraud charge. An example of this would be if an accountant or human resources employee issued themselves a check in addition to the rest of the company’s paychecks.
What Is the Liability of the Bank for Paying an Altered Check?
Generally, a bank that makes a good faith payment to a holder may charge the indicated account of the bank’s customer in accordance with the original terms of the altered check.
If a $25 check is raised to $2,500 and paid in the increased amount, the bank may charge the drawer’s account, but only for the original $25 amount.
Should I Contact a Lawyer Regarding My Altered Check Issues?
A financial lawyer is a sort of lawyer who helps clients with legal concerns concerning money. A financial lawyer is necessary for a variety of reasons.
Some fields of finance can be complex, and the rules that govern them may necessitate the investigation and interpretation of a lawyer. This can include a variety of topics such as financial strategies, financial responsibility legislation, and even financial power of attorney agreements.
The falsified check policy of your bank is usually detailed in the information packet you receive when you create an account with them. If it is not, or if your bank refuses to answer questions about a possible forged check, you should consult with a finance lawyer who can speak with the bank and determine the best course of action.
If you are being sued for modifying a check or feel your bank has processed a plainly and unlawfully altered check, you should contact a financial lawyer immediately. Both have major ramifications on both the criminal and civil sides of the law.
An attorney can assist you in drafting, reviewing, filing paperwork, and explaining your legal rights at critical stages. If a financial dispute or legal conflict arises, your attorney will be familiar with your financial history and will be able to provide much more effective legal representation.