In an era of fast-moving technology and digital payments, it may be surprising that one of the biggest increases in recent financial fraud stems from an old-fashioned scheme: check fraud.
There has been a dramatic increase in check fraud over the last several years. According to the U.S. Treasury Department, check fraud has increased by 385% nationwide since the COVID-19 pandemic, with the annual volume increasing by 84% to $815 million in the U.S. in 2022, according to the Financial Crimes Enforcement Network (FinCEN).
FinCEN noted that one of the most common tactics driving the increase in check fraud is mail theft. Fraudsters are stealing mail, searching for checks, and selling the checks — sometimes on the dark web.
How can a fraudster use my stolen checks?
A few of the methods fraudsters commonly use to commit check fraud include:
- Altering information: A scammer may use common household chemicals to change the dollar amount and payee name on a check, also known as “check washing.”
- Forging endorsements and engaging in identity theft: Checks typically include name and address information that criminals can use to steal someone’s identity. A fraudster may attempt to open a bank account to negotiate the check payable to the intended payee by forging the endorsement, and then proceed to leverage that stolen identity to apply for credit products using the victim’s personal data.
- Creating counterfeit checks: By using the information on a stolen check, fraudsters may further exploit the victim’s account information by creating additional counterfeit copies of the check.
How can I prevent check fraud?
Consider these 4 tips to help prevent check fraud when sending money to others:
- Pay digitally. Reduce the number of checks you send and use card or digital payment methods instead.
- Consider the type of pen you use. If you do write a check, use a black gel pen. This type of ink is more difficult to remove.
- Use secure mailboxes. If you need to send a check by mail, use the mailbox inside of a U.S. Postal Service facility rather than a curbside mailbox or your residential outgoing mail.
- Keep your bank account information safe. Do not share or post your bank account information anywhere publicly, and never share account information with anyone with whom you did not initiate the communication. Do not allow websites to save your routing/transit and account number information.
Your bank account security is a top priority at Amegy Bank. Visit the Amegy Bank Security Center to learn more about how you can remain vigilant. With a little caution and know-how, you can avoid becoming the victim of a check fraud scam.
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Amegy Bank.