Changing banks comes with many hassles, including getting rid of your unused checks when you close the account. Unfortunately, most people store their checks in out-of-the-way places, so if they’re not disposed of right away, they’re often forgotten. When a thief stumbles upon them years later, the original account holder can end up in hot water. Taking a few moments to safely dispose of old checks can save consumers and businesses time, money and legal troubles.
What’s the Worst That Can Happen?
Sometimes people just toss their old checkbooks in the trash. What’s the harm? The account is closed, so it doesn’t seem risky. However, they couldn’t be more mistaken.
Checks often include the following information:
- Account holder name.
- Phone number.
- Social security number.
- Account number.
- Driver’s license number.
Not only can someone try to pass a bad check in the account holder’s name, but having all this information makes it easy for a con artist to commit other crimes or even try to steal your identity.
A scammer can use someone’s personal information to access or create:
- Loans and credit card accounts.
- Income tax refunds.
- Fake IDs and working papers.
- Online payment portals.
The tax implications alone are frightening. Consumers and business owners should protect themselves by disposing of unused checks right away.
The Best Methods for Disposing of Old Checks
Shredding services provide the most secure disposal method of old banking records, checks included. Financial institutions sometimes offer their customers these benefits for free, often during a specific time period. The financial institution doesn’t want the hassle of dealing with checks written on closed accounts either.
However, you can also use some handy home options to safely dispose of your old checks. A cross-cut shredding machine is a secure checkbook disposal method. It turns old records into a handful of confetti in no time. Then again, so does a sharp pair of scissors. Basic shredders, which often leave strips of paper behind, make it easy for garbage combers to piece account information back together.
Cutting isn’t the only option. Savvy homeowners often drop checks in buckets of bleach water and wash them in fabric bags before tossing them out. Some people carefully add them to fire pits or use them for fireplace kindling. Professional shredding services aren’t necessary to dispose of a small amount of material as long as the account numbers and other identifying information end up illegible.
Read More: Rules for Stamped Signatures on Checks
Always Dispose of Checks Deposited Through Mobile Devices
Along with unused checks, checks deposited over a mobile banking app also put consumers and businesses at risk. Most financial institutions expect account holders to label these checks “DEPOSITED” or “VOID” to prevent scammers from trying to cash them a second time. Individuals can go the extra step and destroy the check after processing to limit the chances of that happening.
Special Rules for Business Disposal of Financial Records
Businesses often have to keep their financial records longer than the average consumer. The taxman can come knocking at any time. While the IRS recommends keeping these records for three to seven years, there’s no requirement for storing unused checks. However, company policy might require employees to keep them around.
If possible, employees should speak with company management about making an exception for old, unused checks. Considering the risk, there’s little benefit in keeping them. Hiring shredding services to handle bulk amounts of financial material is often the fastest, most secure method for dealing with old business checks.
For a business with a small amount of paperwork, purchasing a checkbook shredder might be a sound investment. Commercial options are similar in price to home shredders and can provide a small business with financial security for many years.
Use Encrypted Digital Storage
Also, it’s become commonplace for businesses to store copies of all kinds of financial records online. Before making the move to digital storage, companies should make sure those files are encrypted securely to prevent hackers from gaining access to them.
With over 20 years of professional writing experience, Hilary Ferrand knows her way around the interwebs. Find out more by following her at LinkedIn.