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Fraud Threat Halts Knuth's Hexadecimal-Dollar Checks
Barence writes "You may be aware of Donald Knuth, the creator of TeX and author of The Art of Computer Programming, who used to post checks to anyone who spotted an error in one of his books — one hexadecimal dollar, or $2.56. No one cashed them though. This blogger has two of them proudly on his wall, but the sad news is that modern day bank fraud has put a stop to Knuth's much-loved way of keeping his books free of errors." (Here's Knuth's own post about the sad change.)
Think of a dollar as "100" cents. 0x100 cents = 256 (decimal) cents.
Regarding checks, with their watermarks, UV-readable text,and what not, I don't think they would fall under the category of 'absurdly easy to fake'. However, people are absurdly easy to fool. So the result is the same. And with credit cards, are you talking about making physical fake cards? Because that's not exactly something one can whip up with supplies from the local hardware store. Generating valid numbers however, along with a little social engineering, the same results can be had with little effort.
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No, it most likely won't. What you say may have been true 10 or even 5 years ago, but is generally not true with modern check imaging systems. The "Check 21" legislation basically enabled all banks to move to electronic check image storage. Of course, they had to upgrade all of their imaging systems to recognize that cost savings, and these new systems are quite discerning, especially for higher-value checks. Manual inspection is required for most high-value checks, and even things like a changed paper stock or layout can be flagged for manual review.
Also, nearly every company of reasonable size is required to implement positive pay, meaning they send a list of check numbers, dollar amounts, and payees to the bank before the checks are actually cut. So when you go to cash a fake check, the bank knows it is fake immediately. There are of course ways to get around this, especially with personal accounts (which usually do not offer positive pay), but check fraud is no longer as simple as portrayed in Catch me if you Can.
That said, check still fraud remains a major cost for banks, and believe it or not they are working hard to make it less possible. But there is as yet no "magic bullet" technology to replace paper checks. Chip-and-PIN, smartcards, etc. all suffer from different security and operational issues. They also cost a lot to implement worldwide, even after including the costs of paper check fraud. A paper check is fairly easily validated, can be sent through the mail, and requires no "secure" hardware terminals at every merchant.