Kiting

What is Kiting?

Kiting is a fraudulent activity that involves the manipulation of bank accounts to artificially inflate funds. This is achieved by transferring checks between different bank accounts, creating a float—a false balance—while the checks are in the process of being cleared. This method can mislead financial statements by showing inflated account balances temporarily.

Short Description: A fraudulent scheme involving the manipulation of funds between bank accounts to create artificial float and inflate account balances.

• Check Kiting: Writing a check from one account and depositing it into another while insufficient funds exist to cover the check in the originating account.
• Bank Float: The time it takes for a check to clear through the banking system, during which the funds may appear available in both accounts.
• Detection and Prevention: Banks utilize sophisticated software to detect unusual patterns and prevent kiting schemes.

Kiting skews financial records and can result in severe legal consequences for the perpetrator if detected. Educational initiatives and advanced banking software significantly reduce the risks of such fraudulent activities occurring.