What Is Check Kiting? | Chime

Check kiting can take a few different forms and vary in complexity. Some check kiters might use a couple of bank accounts and perform check kiting just when they’re in a financial pinch (still illegal, by the way). Other fraudsters may use several accounts across multiple banks, performing check kiting for as long as they can before getting caught. 

The reason check kiting works is because check funds are usually available within a day. You deposit a check on a Monday and have access to the funds on Tuesday. But it takes a few days for a check to completely clear. By playing into the timeframe it takes for checks to clear, fraudsters are able to pass money between accounts without the checks actually bouncing. 

Check Kiting Example #1 

1. A fraudster needs $500 they don’t have in any of their accounts. 
2. They write a check from bank account A for $500 on Monday and deposit it into bank account B the same day. 
3. On Tuesday, they withdraw the full $500 from bank account B and use the funds. 
4. On Wednesday, the fraudster comes up with extra funds and quickly deposits the $500 bank into bank account A before the check can be returned. 

Check kiters might just consider this a temporary loan from the bank. However, it’s unauthorized and fraudulent.  

Check Kiting Example #2 

1. A fraudster has 3 bank accounts: bank account A, B, and C. 
2. They write a check for $5,000 from bank account A and deposit it into bank account C. 
3. They write a check for $5,000 from bank account B and deposit it into bank account C. 
4. They withdraw $10,000 from bank account C as quickly as possible. 
5. The checks are returned, and bank account C is now short $10,000. 

In this example, the check kiter used the processing times to get access to a large amount of funds they didn’t have. Essentially, they took money from the bank as a form of credit. This use of money was illegal and unauthorized. 

Check Kiting Shell Game

Check kiting can also take the form of a “shell game.” In this case, fraudsters move non-existent funds back and forth between accounts over and over again. Through a series of withdrawals and partial deposits, banks collect money from each other without realizing the person doesn’t have the money to begin with. 

The amount of funds grows with each transaction, and serious fraudsters might even bring more bank accounts into the mix. In a check kiting shell game, the funds are the “prize,” and the bank accounts are the “shells.” The prize gets passed back and forth between shells and can even grow if they earn interest on the non-existent funds.