What Is an Altered Check?

John Lister
John Lister
An altered check contains information that has been changed from its original.
An altered check contains information that has been changed from its original.

An altered check is one where some detail has been changed after it was originally written, specifically when that change has been made without the check-writer's knowledge. The legal consequences if and when this alteration is discovered depend on the prevailing jurisdiction. An altered check should not be confused with a bounced check or a crossed check.

An altered check is one in which a detail was altered after the check was written, and this can be grounds for a check not being honored by a bank.
An altered check is one in which a detail was altered after the check was written, and this can be grounds for a check not being honored by a bank.

The most likely form of an altered check is one where the recipient's name has been changed by a person in possession of the check, meaning he or she can collect the payment. In some situations the alteration may be to the amount, though this tends not to happen if the recipient and issuer know one another, as the alteration will soon become clear. It could be the date that was altered, for example if the issuer intended the check to be post-dated to avoid potential scams and the recipient alters the check to allow immediate cashing without delivering the relevant good or services.

Regulations regarding the changing of information on a check are included in the Uniform Commercial Code.
Regulations regarding the changing of information on a check are included in the Uniform Commercial Code.

In the United States, altered checks are covered by section 3-407 of the Uniform Commercial Code. This is a set of standard regulations regarding commercial transactions that has been adopted into the laws of all US states. Under the UCC, alteration covers both changing what has been written on a check, and adding information where the check was incomplete, for example if the amount was left blank.

The rules mean that if somebody fraudulently alters a check, anyone who would have had an obligation resulting from that check is no longer required to meet that obligation. This means that not only does the issuer not have to pay the money, but neither the issuer nor recipient's bank has to act upon the check. If, however, the issuer's bank pays out the money on an altered check in good faith, it cannot necessarily be forced to recover or return the money.

Banks are allowed to put time limits for the issuer to spot the alteration and require the transaction to be overturned. The maximum time for such a limit imposed by the bank is 30 days. If the bank does not have a policy, there is also a legal limit of one year for the customer to make a complaint.

An altered check is not the same as a bounced check. This is better known as a non-sufficient funds case and means that the issuer does not have enough money in her account to cover the payment; if the issuer knew this upon writing the check she may be guilty of a criminal offense. The altered check also differs from a crossed check, which can only be deposited at a specific bank, rather than cashed elsewhere.

Who Is Liable for an Altered Check?

In addition to defining what constitutes an altered check, the Uniform Commercial Code also allocates liability and specifies the rights and responsibilities of all parties involved. Ultimately, the person who altered the check for fraudulent purposes is the guilty party, who faces the appropriate penalty under the laws in the jurisdiction where the act took place. However, the UCC also considers all persons and institutions, including:

  • the person who wrote the check (the "drawer")
  • the bank on which the check is drawn
  • the bank into which it is deposited
  • the clearing service

Broadly speaking, the law says that every person or institution that transfers the check does so with the implicit warranty that it is unaltered since the drawer filled it out. Therefore, responsibility is assigned based on a combination of general liability and a determination of whichever individual or institution was in the best position to catch the alteration and failed to do so. At that point, it is the liable party who goes after the person who originally altered the check.

Does The UCC Apply Specifically to Personal Checks?

Legally, a personal check is a promissory note, or a promise to pay the stated amount on the check. However, the UCC considers this to be only one category of what is known as "negotiable instruments." In addition to personal checks, these can also be any or all of the following:

Not all of these are promissory notes. Cashier's and teller checks and money orders are categorized as "drafts," or orders; the person or institution that is authorized to pay is under an order (in this case, the person who originally purchased the check) to do so.

Can You Cash an Altered Check?

This does happen on rare occasions, most often with personal checks. However, with today's high-tech watermarks and other ways of authentication and fraud detection, it would be very difficult for a potential fraudster to cash an altered check.

The real problem here is that, as discussed earlier, liability may rest with anyone along the chain of endorsements from drawee (the institution funding the check) to the payor (the institution who pays the bearer).

There was a recent situation in which a remitter (the person writing the check) was held liable by the payee when they failed to receive payment. This did not come to the remitter's attention until he saw his monthly statement. Somehow, the check had been stolen and the name of the payee cleverly replaced with that of the thief.

The thief ultimately faces criminal charges, when and if caught. However, the remitter could be held liable and forced to write a new check to the payee along with any penalties and fees. In this case, the remitter would need to demonstrate to the court that the check had been altered in a way that any competent bank teller or another financial professional should have detected.

Is it a Felony to Alter a Check?

The answer is yes if the amount involved is $1,000 or more. Otherwise, it is prosecuted as a misdemeanor. Penalties will vary from one jurisdiction to another, and depend on factors such as recidivism and the exact amount involved. Convictions for higher amounts result in harsher penalties in addition to restitution.

Check alteration is one of several related financial crimes under the broader category of check fraud. While check alteration is very common, other forms include:

"Paperhanging" simply refers to issuing checks on a closed or non-existent account. People get away with this on occasion, but most verification methods today can at least confirm the existence of an account, if not its balance.

"Kiting," or "Flashing," is more sophisticated and involves the circular transfer of funds among multiple accounts. Here is a simple step-by-step example:

  1. John has $50 in his account at First National.
  2. He writes himself a check against that account for $100. 
  3. John then deposits that check into a different account he maintains at State Bank.
  4. Immediately, John withdraws that $100 from State Bank
  5. He returns to First National and re-deposits the $100 before the check clears.
  6. The $100 is then paid into his account at State Bank

In essence, John just made himself $50.

Motives for this form of white-collar crime vary but usually involve businesses that are trying to stay in operation during economic downturns. Unlike altering a check, schemes such as kiting cross the line into a federal crime, and are prosecuted accordingly.

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    • An altered check contains information that has been changed from its original.
      By: JJ'Studio
      An altered check contains information that has been changed from its original.
    • An altered check is one in which a detail was altered after the check was written, and this can be grounds for a check not being honored by a bank.
      By: Pefkos
      An altered check is one in which a detail was altered after the check was written, and this can be grounds for a check not being honored by a bank.
    • Regulations regarding the changing of information on a check are included in the Uniform Commercial Code.
      By: Alex Hinds
      Regulations regarding the changing of information on a check are included in the Uniform Commercial Code.