Eli5, how do checks work. Especially now that we can deposit them via phone now. What stops us from creating (e.g., photoshooting) fake checks all day.

Question

Eli5, how do checks work. Especially now that we can deposit them via phone now. What stops us from creating (e.g., photoshooting) fake checks all day.

In: Economics

Answer 1

A check is, essentially, a promise to pay. It’s valid if, and only if, the entity that issued the check intends to pay out the money _and_ they have sufficient money to make the payment. It doesn’t really matter how the check is created – you can Photoshop it or spray paint it on the side of a cow (it’s been done). As long as you intend to pay up and the money is there, it’s good (although your bank may ask what you want them to do with the cow).

If one of the essential elements is missing, that’s fraud. If you Photoshop a bunch of fake checks, I’m guessing you either don’t intend to pay up when someone tries to cash one of those checks, or you don’t have money in the bank to cover them. The same logic applies to forged checks on someone else’s account – _they_ didn’t intend to make the money available. Likewise phony checks on a nonexistent or closed account – there’s no intent to pay up, and there’s no money to pay with anyhow.