Check Fraud Making a Comeback

by | Oct 24, 2023 | Agriculture, Business, Personal Finance

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In a world of digital payments, online bill pay, and card transactions, it is hard to imagine an uptick in check fraud. Yet, that is exactly what is happening. The Federal Reserve recently released an article stating paper check payments “are seeing a sizable increase in fraudulent appeal” across the country.

 

Reduce Your Risks

Secure electronic payment methods can reduce risks for both businesses and individuals. Tools such as ACH payments, bill pay (through your bank or payee website), and person-to-person payments can be a quick and safe method to send money. The key to keeping electronic payments secure is using strong passwords and multi-factor authentication. If you prefer the “paper trail” of a paper check, choose a permanent black gel ink pen that cannot be washed off by fraudsters.

Regardless of your preferred payment method, everyone should closely monitor their bank account(s). Digital banking gives clients the ability to check their account activity at any time and more frequently than a monthly statement. If you are writing paper checks, be sure to look at the check image to ensure the payee has not been altered or a fraudulent check created. Business clients may wish to consider our Positive Pay check monitoring service.

 

“We ended up with a situation where a check had actually come through the Bank and Alliance caught that. They questioned it and notified us. With that notification, it became apparent we needed to do something new and different. That’s when we went with the Positive Pay and we’re so grateful we did.”  -Lois Shoup, Polymer Science

A Low-Tech Crime

Check fraud can be as simple as swiping a check from a mailbox or drop-off boxes and removing the ink to, essentially, rewrite the check. In other instances, readily available check stock is used to print checks that mimic legitimate businesses. Though there are many check security features, fraudsters are still able to sneak these checks into the payment system.

In the last thirty years, the number of checks written has decreased by 82%. Yet the Financial Crimes Enforcement Network (FinCEN) issued an alert earlier this year on a “nationwide surge in check fraud schemes targeting the U.S. Mail.” The U.S. Postal Inspection Service reported roughly 300,000 complaints of mail theft in 2021, more than double the previous year.

 

Fighting Fraud on the Front Line

Bankers are continuously monitoring banking activity for fraud to protect their clients. They are trained to watch for irregularities that may indicate a fraudulent check, ask questions to protect clients from scams, and take the necessary precautions when fraud is suspected. Try not to be alarmed or offended when your banker takes these steps with your best interest in mind.

If you suspect a check has been altered or are concerned about an unknown charge on your account, reach out to your bank immediately. You are your first line of defense against fraud. We also encourage you to report the incidence to the United States Postal Inspection service.



			

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