Save yourself money - Check your Cheques

With the continuing advancement of modern technology such as EFTPOS, we have all noticed the decline in the number of payments made by cheque.  Despite this, we must continue to be vigilant in protecting ourselves and our businesses against the ever present risk of cheque fraud.

How Does it Happen?


In most cases, cheque fraud happens when a cheque has not been written correctly.  Here are two examples from the Consumer website:


In November 2006, Fair Go reported that a man sent a cheque for nearly $34,000 to a packaging company.  The cheque was stolen and deposited into the thief's account.  The words "or bearer" had not been crossed out on the cheque.  Westpac, the bank involved, eventually paid out even though it wasn't legally obliged to do so.


Then there's the case of a $20,000 cheque being stolen and deposited into another account.  Two parallel lines were drawn on the cheque, but the words "Not Transferrable" were missing.  The bank decided not to refund its customer as it wasn't legally liable.


Quite simply, if you do not complete a cheque correctly and it is stolen, you are still liable for the original payment.


How Can I Stop this Happening to Me?

  • Clearly write the person or company you are paying.

  • Write the amount of the cheque in words and figures leaving no gaps in between.  This will help stop the amount on your cheque being altered.

  • Cross the cheque by drawing two vertical parallel lines through the middle of the cheque.  In between the two lines write the words "not transferable", "non transferable, "account payee" or "a/c payee" and cross out the words "or bearer".  By doing this, your cheque can only be deposited in the bank account of the payee named on the cheque.  If you write the words "not negotiable", that cheque can still be transferred into a different bank account.

  • Keep your cheque book in a safe and secure place – that is not known to everybody.

  • Never sign blank cheques.  Only sign a cheque when payment needs to be made.

  • Notify the bank immediately if your cheque or cheque book has been lost and stolen.

By following these easy steps you can help keep your cheque payments safe.