Let’s Talk Check Fraud

The Federal Reserve processed 1,468,000,000 checks in the second quarter of 2014, compared to only 754,000,000 in the second quarter of 2024. However, the value of checks processed increased from $2,027,000 to $2,135,000 for the same time period.

It would be easy to think a decrease in checks being written and new payment technologies would mean check fraud is going away. However, according to data from the Financial Crimes Enforcement Network (FinCEN) the number of check fraud cases being reported by financial institutions has increased over 400% since 2014.

How Does Check Fraud Work?

Check fraud can happen in different ways. Typically, mail theft is a common way for criminals to obtain checks for fraudulent purposes. Criminals may steal outgoing checks from United States Postal Service facilities, blue collection boxes or private mailboxes located in buildings or homes or incoming checks from the offices where they are delivered.

In a recent study, FinCEN identified three primary outcomes after checks were stolen from the U.S. Mail: (a) 44 percent were altered and then deposited; (b) 26 percent were used as templates to create counterfeit checks; and (c) 20 percent were fraudulently signed and deposited.

• Altered Checks

An altered check is a check that has been changed in some way from the original intent. This can include changing the dollar amount or the name of the payee.

• Counterfeit Checks

A counterfeit check is a check that has been made fraudulently to steal money. Using information on the stolen check - including the logos, authorized signature, account number, and routing number - criminals use imaging software, printers and scanners, and blank check stock to produce counterfeit checks. These checks are often difficult to identify.

Preventing Check Fraud

• Avoid using paper checks. Instead, use online payments, credit cards, or peer-to-peer apps.
• Review your accounts daily. If you make it part of your routine, you’ll pick up on fraudulent activity much faster.
• Verify the payee and amounts on each check that clears your account.
• Use a secure, locked mailbox and check it frequently. Do not let mail sit in your mailbox.
• Deposit outgoing mail inside the post office.
• Stop payment and reissue a lost check.
• Keep your checks secure when you are not using them.

If you believe you are a victim of check fraud, contact us immediately.