An altered check is one where some detail has been changed after it was originally written, specifically when that change has been made without the check-writer’s knowledge. The legal consequences if and when this alteration is discovered depend on the prevailing jurisdiction. An altered check should not be confused with a bounced check or a crossed check.
The most likely form of an altered check is one where the recipient’s name has been changed by a person in possession of the check, meaning he or she can collect the payment. In some situations the alteration may be to the amount, though this tends not to happen if the recipient and issuer know one another, as the alteration will soon become clear. It could be the date that was altered, for example if the issuer intended the check to be post-dated to avoid potential scams and the recipient alters the check to allow immediate cashing without delivering the relevant good or services.
In the United States, altered checks are covered by section 3-407 of the Uniform Commercial Code. This is a set of standard regulations regarding commercial transactions that has been adopted into the laws of all US states. Under the UCC, alteration covers both changing what has been written on a check, and adding information where the check was incomplete, for example if the amount was left blank.
The rules mean that if somebody fraudulently alters a check, anyone who would have had an obligation resulting from that check is no longer required to meet that obligation. This means that not only does the issuer not have to pay the money, but neither the issuer nor recipient’s bank has to act upon the check. If, however, the issuer’s bank pays out the money on an altered check in good faith, it cannot necessarily be forced to recover or return the money.
Banks are allowed to put time limits for the issuer to spot the alteration and require the transaction to be overturned. The maximum time for such a limit imposed by the bank is 30 days. If the bank does not have a policy, there is also a legal limit of one year for the customer to make a complaint.
An altered check is not the same as a bounced check. This is better known as a non-sufficient funds case and means that the issuer does not have enough money in her account to cover the payment; if the issuer knew this upon writing the check she may be guilty of a criminal offense. The altered check also differs from a crossed check, which can only be deposited at a specific bank, rather than cashed elsewhere.