Check Kiting Schemes on the Rise in Ireland
A growing concern in Ireland is the increasing incidence of check kiting, a sophisticated financial scam that allows perpetrators to access credit without authorization. In this article, we will explore the technique behind check kiting, its variations, and the measures being taken by banks to combat it.
What is Check Kiting?
Check kiting involves writing and issuing checks with the knowledge that the funds to cover them are not actually available. By exploiting the “float time” period between when a check is deposited and when it clears, perpetrators can withdraw funds from one bank before the check has cleared at another institution.
How Check Kiting Works
- Writing and issuing checks with insufficient funds
- Depositing these checks into an account at a different bank
- Withdrawing funds from the second account before the first check has cleared
- Repeating this process multiple times during the float time to accumulate unauthorized credit
Variations of Check Kiting
One common variation of check kiting is known as retail kiting, where fraudsters cash initial bad checks at retailers before using the funds to write subsequent checks with cashback amounts. This can be particularly problematic for retailers who offer cashback services via check.
Retail Kiting
- Cash initial bad checks at retailers
- Use the funds to write subsequent checks with cashback amounts
- Repeat this process multiple times during the float time
Long-term check kiting schemes can also be used by perpetrators to build relationships with banks based on mutual trust. In these cases, individuals may deposit checks from multiple accounts into a single account at another bank, only to withdraw the funds before the bad checks are returned.
Long-Term Check Kiting Schemes
- Build relationships with banks based on mutual trust
- Deposit checks from multiple accounts into a single account at another bank
- Withdraw funds before the bad checks are returned
Protecting Yourself Against Check Kiting
If you suspect that your business or individual account has been targeted by a check kiting scheme, it’s essential to contact financial experts for assistance. Our team can provide guidance on protecting yourself against this type of fraud and help you manage ad hoc payments or recurring payments securely.
What to Do if You Suspect Check Kiting
- Contact financial experts for assistance
- Seek guidance on protecting yourself against check kiting
- Manage ad hoc payments or recurring payments securely