The oldest trick in the chequebook

With all the recent horror stories about identity theft, credit and debit card cloning and breaches of online banking security, we seem almost to expect to be duped of our cash via internet hackers or card cloners.

But how many people worry these days about being conned via that almost obsolete tattered chequebook lying in the bottom of their bag?

I was happily oblivious to the idea of cheque fraud until a few weeks ago when I was on the receiving end of what I have since learnt is an increasingly common scam.

The first I knew that anything was awry came when I checked my bank account online and discovered my balance was in the red due to a cheque withdrawal to the tune of £920. Like most people I only use my cheque book occasionally and then for amounts of less than £100.

Checking the serial number of the cheque against those on my existing cheque book it soon became clear that a new cheque book had been sent to me by my bank, HSBC, and was intercepted in the post.

A cheque was subsequently fraudulently written for the missing sum - and the signature had obviously never been checked against my own before it was cleared.

But this was just the beginning of a saga in which, rather than being treated as a victim, I began to feel like the criminal as I was continually passed from one call centre to another. And, almost two weeks after reporting the fraud, I have only now been able to retrieve my £920 following the intervention of the bank's press office.

"There isn't a standard time scale for being reimbursed as each case varies," said a bank spokesperson, "However, it is standard procedure for the cheque to first be retrieved from the service centre to be examined and this can take up to seven days. Once it has been established as fraudulent the branch does need to submit a report to the fraud department and to do this they will need your signature first for authorisation."

Yet to top it all off, the day after reporting the theft I was charged £7.50 for putting a stop on the rest of the cheques in my stolen cheque book.

If you do have the misfortune to suffer at the hands of a fraudster - and then your bank - it's a good idea to examine your rights under the banking code. This exists to protect UK banking customers but in reality few people know the details of it.

One point in the code states: "If there is an unreasonable delay after you have told us about it [the forged cheque], we will add the amount of the cheque to your account until we have sorted the matter out."

After I pointed out to HSBC that I considered the time lapse an "unreasonable delay" they were very forthcoming. Somehow my cheque was examined immediately and confirmed as a forgery. Again, it was only after I mentioned that by applying the stopped cheque charge without first giving me 14 days notification that they had breached the banking code, that my £7.50 was reimbursed.

With fraud seemingly this easy to carry out it was hardly surprising to discover that I'm not alone in my experience. Although cheque use is falling each year, the amount of money lost to cheque fraud is rising. We wrote out 2.8bn cheques in 1999 and it is expected to drop to 1.7bn by 2009. Yet, according to the Association for Payment Clearing Services (Apacs), £36m was lost to cheque fraud in 2002 - up from £34.5m the year before.

Cheque fraud can be divided into three categories - lost and stolen cheques, counterfeit cheques and fraudulent alteration. While cases of the latter two have fallen over the past year thanks to improved technology and enhanced techniques to detect and prevent forgery and alteration, the amount lost to cheques where the signature is forged has increased and made up a massive £23m of the £36m lost in 2002.

Although the British Bankers Association says banks have "pretty robust systems" to prevent cheque fraud, they don't always include scrutinizing signatures.