Altered Check

AAA

DEFINITION of 'Altered Check'

A check or another negotiable instrument that has been materially and maliciously altered to effect a fraud. Usually either the name of the payee or the amount of the check is changed.

INVESTOPEDIA EXPLAINS 'Altered Check'

Altered checks are specifically addressed in the Uniform Commercial Code (UCC) Section 3-407. The term "alteration" is defined as either:
(1) an unauthorized change in an instrument that purports to modify in any respect the obligation of a party; or
(2) the unauthorized addition of words or numbers or another change to an incomplete instrument relating to the obligation of a party.

Under the UCC, the liability for an altered check can reside with the various parties involved - including the customer drawing the check, the bank on which the check is drawn and the bank that presents the check - depending on the evident negligence. Ordinarily, a customer needs to examine his or her bank statement and report the loss within 30 days. Regardless of any negligence by the drawee bank, a customer will be barred from recovery if he or she does not report the loss within one year.

RELATED TERMS
  1. Check

    A written, dated and signed instrument that contains an unconditional ...
  2. Instrument

    1) A tradeable asset or negotiable item such as a security, commodity, ...
  3. Crossed Check

    Any check that is crossed with two parallel lines, either across ...
  4. Negotiable

    1. Describing the price of a good or security that is not firmly ...
  5. Bounced Check

    A slang word for a check that cannot be processed because the ...
  6. Financial Action Task Force (FATF)

    An intergovernmental organization that designs and promotes policies ...
RELATED FAQS
  1. What are some high-profile examples of wash trading schemes?

    In 2012, the Royal Bank of Canada (RBC) was accused of a complex wash trading scheme to profit from a Canadian tax provision, ... Read Full Answer >>
  2. What are examples of inherent risk?

    Inherent risk is the risk imposed by complex transactions that require significant estimation in assessing the impact on ... Read Full Answer >>
  3. What is the difference between wash trading and insider trading?

    Wash trading is an illegal trading activity that artificially pumps up trading volume in a stock without the stock ever changing ... Read Full Answer >>
  4. What impact did the Sarbanes-Oxley Act have on corporate governance in the United ...

    After a prolonged period of corporate scandals involving large public companies from 2000 to 2002, the Sarbanes-Oxley Act ... Read Full Answer >>
  5. Who are the most famous people convicted of insider trading?

    In finance, insider trading refers to the buying and selling of security by a person who has access to material non-public ... Read Full Answer >>
  6. What's the difference between insider trading and insider information?

    Insider information is the knowledge of nonpublic material about a publicly traded company that may affect the stock's price. ... Read Full Answer >>
Related Articles
  1. Insurance

    Credit Scams To Watch Out For

    More than 30 million people were victims of fraud in 2007. Will you be next?
  2. Insurance

    Your First Checking Account

    This owner's manual will show you what to expect from your bank.
  3. Credit & Loans

    Identity Theft: Who To Call For Help

    If your identity is stolen, it's critical to act fast. Find out what to do if it happens.
  4. Budgeting

    When Good People Write Bad Checks

    Overdraft protection can help when you overestimate your balance, but it will cost you.
  5. Professionals

    Are You Sure You Aren't Ponzi Scheme-Susceptible?

    Anyone can be a victim of a Ponzi scheme — even the most financially literate. Here's how to avoid the next Madoff.
  6. Professionals

    7 Cybersecurity Tips for Advisors

    The digital age has created a new breed of thief who can break into client files at any time, but there are ways to minimize risk exposure.
  7. Professionals

    Tips for Protecting Clients from Scammers

    Predators now have more access to vulnerable clients than ever before; advisors should communicate with clients to better spot potential scams.
  8. Investing News

    Why FIFA Can't Give the 2022 World Cup to Qatar

    Learn about the high price tag for the 2022 World Cup in Qatar, along with allegations of human rights abuses and bribery scandals in the bidding process.
  9. Investing Basics

    Explaining Insider Trading

    While often associated with illegal activity, insider trading actually encompasses both illegal and legal trading of securities.
  10. Economics

    Understanding Money Laundering

    The process of creating the appearance that large amounts of money obtained from serious crimes actually originated from a legitimate source.

You May Also Like

Hot Definitions
  1. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  2. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  3. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  4. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  5. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
  6. Grandfathered Activities

    Nonbank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!