Watch where you keep your blank checks. Hide them! There were more than a million cases of check fraud in the U.S. in 1993. If someone filches a few checks from the middle or the back of your checkbook, it could be months before you noticed, if ever. Then it’s just a matter of getting your signature (how hard is that? They may already have it from a letter or check you paid them with already, or by grabbing a piece of outgoing mail from your mailbox) and forging the check.

The best way to catch fraud: Reconcile your checkbook promptly each month. Better still, switch to an on-line checking account of the type now becoming available through Citibank or linked through Quicken or Managing Your Money. You’ll be able to see your transactions promptly — and spot any that seem bogus. What’s more, most of them will be electronic to begin with. No checks, no check fraud.

Also, make a note someplace of the checks you’ve got in your wallet, so if it’s stolen you know which are gone and can stop payment without having to close out your whole account. Each time you grab some new blank checks for your wallet, update that note. (A good place for it: right there with your main stash of checks.)

Yes, your liability is limited when it comes to forged checks. But that assumes (a) you even notice you’ve been robbed (if you don’t reconcile, you may never know) and (b) that you ignore value your time (straightening out a mess like this can be a nightmare).

Tomorrow: Dumpster Divers


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