Rising Check Fraud Threatens Americans Despite Digital Advances
As online banking gains traction, the resurgence of paper check fraud becomes a serious concern
In an era dominated by digital transactions, paper checks are making an unexpected comeback, and with them, a surge in fraudulent activities. While many Americans may assume that their reliance on online banking and infrequent use of paper checks shield them from fraud, experts warn that criminals are finding crafty ways to exploit vulnerabilities even without a physical check in hand.
Sarah Grano, a spokesperson for the American Bankers Association (ABA), emphasized the severity of the issue. “The rise in sophisticated check fraud is a serious issue, and the American Bankers Association is working collaboratively with our members and other stakeholders to implement innovative solutions that target the real problem — the bad actors preying on customers and the banks that serve them.”
Check Fraud Numbers on the Rise
Recent years have witnessed a noticeable uptick in check fraud claims despite the declining use of paper checks. Joe Bernardo, global head of fraud and claim operations with Wells Fargo, revealed that the Financial Crimes Enforcement Network (FinCEN) reported a staggering 23% increase in possible check fraud cases in 2022, with 680,000 cases compared to 350,000 in 2021.
Bernardo attributed the rise in paper check fraud to its outdated security measures. While digital payment methods, such as credit cards, have evolved with enhanced security features, paper checks have remained relatively frozen in time.
Vulnerabilities of Paper Checks
Compared to more secure transactions like chip-enabled credit or debit card payments, paper checks are susceptible to various fraud schemes. Criminals can steal checks through everyday commerce, pilfer check payments from the mail, or obtain customer credentials through phishing scams, allowing them to create counterfeit copies of checks.
Bernardo outlined some methods fraudsters use to access accounts, including stealing mail to chemically alter checks, washing off the original ink, and altering the amount and payee’s name. Another tactic involves obtaining bank routing and account numbers to create fake checks purchased from office supply stores.
Safeguarding Yourself Against Check Fraud
To better protect oneself from check fraud, experts recommend the following measures:
- Use Digital Payments: Embrace digital payment methods that come with enhanced security features.
- Secure Check Writing: When using paper checks, employ non-erasable black gel ink, such as a permanent marker.
- Mail Checks Securely: Use the U.S. post office instead of public mailboxes to reduce the risk of theft.
- Regular Account Review: Regularly review bank statements and cashed-check images. Utilize your bank’s mobile app for real-time monitoring.
- Set Up Alerts: Sign up for daily balance transactions and balance alerts to stay informed about your account activity.
By adopting these practices, individuals can fortify their defenses against the growing threat of check fraud, particularly as the holiday season approaches.
Note: Stock market information provided is for reference and not directly related to the topic of check fraud.
