Check Fraud Is on the Rise: What You Should Know

“Making Money” host Charles Payne and Rep. Burgess Ownes, R-Utah, discuss the country’s crime epidemic.

While online banking and electronic payments are becoming more mainstream, many Americans still write paper checks and fraud is on the rise again.

If you think you’re immune because you pay bills online and don’t write paper checks often, think again. A variety of sneaky scams allow criminals to obtain your checking account information without physical verification.

“The increase in sophisticated check fraud is a serious problem, and the American Bankers Association is working with our members and other stakeholders to implement innovative solutions that address the real problem – the criminals, their customers, and the banks that serve them , “exploit,” Sarah Grano, an ABA spokesperson told FOX Business.

“Working together as an industry with law enforcement, the Postal Service and regulators gives us the best chance of success.”

OPENAI BOOTS ALTMAN; MICROSOFT HOLDS THE BAG AS CO-FOUNDER QUITS IN SOLIDARITY

Here’s how you can better protect yourself before the holiday season and beyond.

Why is check fraud increasing?

In recent years, the number of check fraud lawsuits filed by customers has increased significantly.

“Although fewer people are using paper checks each year, fraudsters have shown a preference for attacking this low-tech payment method,” said Joe Bernardo, global head of fraud and claims processing at Wells Fargo, based in Columbus, Ohio.

The Financial Crimes Enforcement Network (FinCEN), the investigative arm of the U.S. Treasury Department, tracks fraud trends and statistics.

“Just this year, FinCEN issued a warning that check fraud has more than doubled in the last three years,” Bernardo told FOX Business. There were 680,000 reported cases of possible check fraud last year, up from 350,000 in 2021, a 23% increase over reports in 2020, he said.

Compared to digital payment methods, paper checks remain frozen in time in many ways, Bernardo said.

Older Americans are drowning in debt: AARP

“Credit cards and other forms of digital payment systems have been routinely updated and modified with security enhancements, providing additional protection that paper checks do not,” he added.

A customer uses a credit card (Robert Nickelsberg/Getty Images/Getty Images)

What Makes Paper Check Users More Vulnerable?

Compared to other transactions that have become more secure, such as the chip on your debit or credit card, the check hasn’t really evolved, Bernardo said.

The methods fraudsters use to obtain a check can range from stealing checks in everyday business transactions to stealing check payments in the mail to obtaining customer information through phishing scams that allow them to review check images online and create a forgery Copy of a consumer check, Bernardo explained.

A mail carrier reaches out of his truck to deliver mail on October 1, 2021 in Fort Lauderdale, Florida. (iStock / iStock)

“Fraudsters steal mail looking for paper checks. When fraudsters find a check, they chemically wash the original ink off the check before changing the amount and payee name,” Bernardo told FOX Business. “From there, they cash the check to steal money from the account.”

CLICK HERE TO READ MORE ABOUT FOX BUSINESS

Another way for criminals to access your account is to obtain a customer’s routing number and account number to create counterfeit checks.

“By purchasing blank checks from an office supply store, the fraudster creates counterfeit checks using an actual customer’s account information, giving them access to steal money from that account,” he added. “Regardless of the situation, the criminal’s goal is always the same: to get your money.”

Personal checks are subject to fraud. (iStock / iStock)

How you can protect yourself better

• Use digital payment
• When writing a check, use non-erasable black gel ink, such as a permanent marker
• Mail checks at the US Post Office, no mailbox

Source: Joe Bernardo, Wells Fargo

Check your account regularly

Regularly review your accounts, statements, and pictures of your cashed checks.

“I highly recommend using your bank’s mobile app so you can monitor activity in real time,” Bernardo told FOX Business. “If something seems strange to you or you see a transaction that you did not make, make sure you dispute it as soon as possible.”

GET FOX BUSINESS ON THE GO by CLICKING HERE

He also noted that it is advisable to sign up for daily balance transactions and balance alerts from your bank.

“By receiving notifications, you will be updated daily in real time about your current account balance and transaction activity. This is a simple, automatic way to stay on top of your finances.”

For added security, make sure your phone and email contact information is up to date on your bank’s website.

“Many banks will use these channels to quickly reach you if they notice any questionable activity,” he advised.