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The Risks of Writing Checks to Cash

Posted by Sherlogix Holmes on 7/16/2018

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Imagine finding a pile of cash on the ground, let’s say $1,000. No one’s around and you can’t spot the person who may have dropped it. What do you do? Many of us would pick it up and turn it in, possibly to the police, but there are people out there for whom the dollar signs would take over and that money would end up in their pocket.

Now let’s pretend that’s your pile of cash on the ground, your vacation fund for that cruise to the Bahamas. You found out who picked it up and you reported it to your bank or credit union, telling them that the money wasn’t meant for them, and that it’s rightfully yours. Unfortunately, because it’s cash, there’s nothing that can be done. Cash is universal and can be spent by anyone.

Now, instead of a pile of cash on the ground, picture one of your checks. You knew that the cost to pay your travel agent for the cruise was going to be $1,000, but you didn’t know who exactly to make the check out to, so you wrote it to “Cash.” You’re out running errands and that check you carefully wrote out slips from your pocket and lands on the ground. It’s shortly picked up by someone who is most certainly NOT your travel agent and cashed at a local bank. Unfortunately, your trip to the Bahamas just turned into a “stay-cation,” since your money is now gone.

When you write a check to “Cash” or leave the payee line blank, you have essentially created a pile of cash for anyone to spend, leaving you no recourse after the fact.  Since you don’t specify WHO gets the money, ANYONE can take it.

If you want to write a check to withdraw cash from a different bank or credit union, write the check to yourself. That way, if someone gets their hands on your check and changes the name to their own, your bank or credit union can legally claim that the check was altered and get the funds back from the other institution.

If you aren’t quite sure who to make the check out to, DON’T WRITE IT. Wait for confirmation from the person you are paying in how they would like the check filled out; never sign a blank check. That’s just asking for trouble. If they request the check be made out to “Cash,” let them know that it’s a very risky practice, and that you would prefer to write it in their name to ensure that they get the funds. You could also use other methods, such as the Bill Pay service, offered free through your Logix online banking, or PopMoney, a peer-to-peer money transfer service offered by Logix.

Long story short, a check to “Cash” or a blank payee line is like carrying around cash: convenient at times, but very risky, with no way to get it back if someone with bad intentions gets their hands on it.

Topics: Fraud & Identity Theft

Meet the blogger

Sherlogix Holmes

Sherlogix Holmes

All things fraud news and fraud prevention tips presented by Logix Fraud Risk Management. We know the importance of staying apprised of fraud trends and want to share our knowledge so you, too, can combat fraud and spread the word to family and friends.

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