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
It is illegal. When you try to deposit a fake check in your account it might go through for a short time until the bank actually tries to transfer the money and it gets detected as a fraudulent transaction. Then the money gets taken back out of your account and the police come looking for you with some serious questions. Your photoshopped check is going to lack all the security features like microprinting and upon closer inspection will be obviously fake.
Then you go to jail for check fraud.
What stops you is that the person or company that owns the account you tried to fake a check from says “Hey, I didn’t write that check.”
Regardless of the method of deposit, the money still has to come from somewhere.
In pretty sure, check fraud is a federal crime.
How they work is they look at the routing number and the account number.
The routing number is the number that tells you where to move the money from, and the account number is whose account at that bank to subtract that money from.
Since you’re depositing it, you then just need the amount. So if you are depositing a check for $100, they would take $100 out of the account number at the routing number and put it in your account.
Checks have always been a really bad system, im honestly shocked they were used ever. (especialy in stores)
Basically the only thing stopping you is the law, and the knowledge that someone will notice and reverse it.
I can’t belive we’ve gotten so far away from checks that people have forgotten that Check Fraud is a crime.
Next let us explain what “Bouncing” a check is.
A check is a promise to pay. Name, amount, bank information, and a signature to say it is you making the promise.
The banks use federal clearing houses to get the banks sorted and forwarded to the correct bank, that is the routing number. It tells the fed what bank to send the check to.
Once the bank has the check from the clearing house, the account number is used to match it to an account in their system. They can verify the check is *reasonably* valid by matching the name and signature to what they have on file. If they think it is good, they release the funds to the clearing house. if they don’t like it, they send the check back to the clearing house as a reject.
that 5-10 days it can take for a check to be sent through the system is called the float. When you write a check to purchase something it might not actually hit your account for several days due to this processing delay.
The new digital submission is based on your contracted agreement with your bank. They submit a digital copy of the check to the clearing house and it is treated the same as a physical check.
“They’re teaching us a lot of new things in here, momma,
Things like,
there ain’t no good in an evil hearted woman,
And I ain’t cut out to be no Jesse James,
And you don’t go writing hot checks down in Mississippi,
And there ain’t no good chain gang.”
It’s a crime, you will get caught, and you will go to prison,
You know your name is on the account, right?
You can make your own check in Photoshop (with real numbers on the bottom) and it will work just fine. They are inherently massively insecure, and banks don’t even check signatures for values below their floor amount. https://www.wsj.com/articles/catch-me-if-you-can-scam-artist-has-a-warning-for-todays-consumers-1506002560
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.
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