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Submitted By: Janice T. Jasinski on Nov 4, 2024 2:00:00 PM
Although fewer paper checks are being issued now than in the past, old-fashioned paper checks remain the "go-to" payment method for many individuals and organizations. While checks may be convenient and familiar, fraud is a persistent problem. According to the Federal Reserve Bank of Boston, the total losses from check fraud were estimated at $24 billion in 2023, nearly double the amount from five years earlier.
These schemes are on the rise, partly because check theft is an easy, low-tech crime to pull off. Plus, there's still a sizeable pool of potential victims. Dishonest individuals and organized crime networks often steal checks from residential mailboxes and public mail drop boxes.
Recent Statistics
A recent government report from the Financial Crimes Enforcement Network (FinCEN) highlighted common ways checks stolen from U.S. mail were used to commit fraud:
The FinCEN report revealed over $688 million in suspicious activity linked to checks in just six months. In addition to direct financial losses, check fraud can adversely impact credit scores and business goodwill, as well as result in bank fees and payment delays.
Nip Check Fraud in the Bud
After a check has been stolen, the thief may continue to conduct fraudulent transactions until theft has been detected. So, it pays to prevent fraud from happening in the first place. Consider the following seven preventive measures:
Awareness Is Key
While opportunity is fueling check fraud schemes, knowledge and vigilance can help individuals and businesses reduce their risks. Alternative payment methods are the first line of defense against check theft, but that's not a realistic solution for every situation. So, implementing additional security measures is crucial for those who still write and accept paper checks.
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