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How to Protect Yourself When Using Paper Checks

hand writing out a personal check
February 28 2020 • by Deirdre Jannerelli • Money Management, Security

Have you ever noticed how much sensitive information is on your personal checks? Your checks contain your name and address, your account and routing numbers, and in some cases even your phone number. And to make matters worse, sometimes you’re required to write your social security number or driver’s license number on a check. With such a treasure trove of personal information, you certainly wouldn’t want one of your bank checks falling into the wrong hands.

But the problem is, checks do fall into the wrong hands. And if a criminal ends up with one of your checks, they could do some major damage. They could create counterfeit checks and use them to steal money from your account, or they could use your account information to purchase things online, using “echeck” or “electronic check” payment options.

Here are some of the reasons why checks can be risky:
  • Potential mail theft. While it’s generally considered safe to send a check via postal mail, mail theft is an ongoing issue that the U.S. Postal Service works to combat, with thousands of mail thieves arrested each year.
  • Too many eyes on your sensitive information. When you pay a bill by mailing in a check, there’s really no telling how many people will be handling it once it reaches its destination. That means a lot of potential people with access to your account details and personal info.
  • Improper disposal of checks. Even if you’re sending a check to a trusted friend or loved one, you may have cause for concern. With the convenience of mobile deposit, people can now deposit checks into their bank account with the click of their phone’s camera. But what happens to the check afterward? Hopefully, whoever you send a check to will promptly destroy it once it has been deposited, but you’ll have no guarantee. If they simply toss the check into the garbage without shredding it, it could be very easy for a criminal to dig it out and steal your account number, routing number and personal information.
  • Checks don’t offer the same protection as credit cards. If a thief steals money from your checking account, you must report the fraud within 2 days, or you could be on the hook for up to $500 of the fraudulent transactions. And if you don’t report the fraud within 60 days, you could be liable for every penny. While some financial institutions do offer more extensive protection to their customers for check-related fraud, they are not required to by law. 

With all of the risks associated with paper checks, you may be wondering if you should even be using them. But while checks can be risky, there are still many instances where a personal check is ideal. For instance, some businesses and government agencies charge extra fees for credit card payments, so paying by check can help you avoid those additional charges. There are also many independent contractors and small businesses out there like plumbers, florists, and photographers that prefer checks and don’t accept credit card payments.

Since getting rid of checks entirely is out of the question for many people, the trick is to keep your checking account as safe as possible by following some basic precautions. Here are some tips to help limit the risks of paper checks:
  • Whenever possible, make payments online. You can pay many service providers by logging into your online account and making a one-time payment. Another option is to set up recurring payments with your service providers, or use your bank’s online bill pay service, if they offer one.
  • Use P2P electronic payments. Instead of writing out checks for gift payments, consider using a person-to-person payment system like PopMoney, PayPal or Venmo to send money electronically. These services may also be an option for paying contractors who don’t accept credit card payments. Many banks, like BankFive, offer P2P payments within their online and mobile banking platforms.
  • Send checks securely. If you must send a check in the mail, use a security envelope, or position the check between the other papers in the envelope so the check cannot be seen. You should also avoid mailing checks from your home mailbox. Visiting the post office or using an official U.S. Postal Service mailbox is a safer bet, as they are generally much more secure than a personal mailbox.
  • Track your checks. After paying by check, you should monitor your account to verify that the check has been cashed. If you notice that a service provider or a loved one hasn’t cashed a check, call them to verify that they received it. If the check appears to have been lost in the mail, contact your bank to have a stop payment placed on the check.
  • Keep your checks safe. Store your checkbooks in a secure place at home, and never carry a checkbook around with you. You should also be sure to properly dispose of old checks and checkbooks. Shredding them is the best way to protect the sensitive information on them.
  • Write out your checks to a specific person or business. When writing out a check, always include a specific name on the line that says “Pay to the order of.” Never write “Cash” in this space, or leave it blank, as doing so will allow anyone to cash it.
  • Monitor your bank accounts regularly and report any suspicious activity immediately. Online banking and mobile banking make it easy to check your accounts on a daily basis, and many banks allow you to set up automatic alerts so you’ll be informed of any suspicious logins or transactions.
While using checks is necessary in many cases, it’s important to be aware of the risks they present. By limiting the number of checks you write, ensuring they are mailed securely, and taking the time to monitor your account’s activity, you can help create a line of defense against check fraud.