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Check fraud: A low-tech and increasingly common crime

The Federal Reserve’s longstanding commitment to combat fraud and build awareness includes providing education on fraud trends and improving the security of all payments. One form of payment in particular – checks – is seeing a sizable increase in fraudulent appeal (Off-site).

Earlier this year, the Financial Crimes Enforcement Network (FinCEN) issued an alert (Off-site) on a “nationwide surge in check fraud schemes targeting the U.S. Mail.” Banks issued about 680,000 reports of check fraud in 2022, nearly double what they reported in 2021. Meanwhile, the U.S. Postal Inspection Service reported (Off-site) roughly 300,000 complaints of mail theft in 2021, more than double the 2020 level, despite actions taken to make mail collection boxes more secure.

Reports of check fraud have almost doubled from 2021 to 2022* 350,000 680,000 *According to the Financial Crimes Enforcement Network

Though these statistics are alarming, awareness and education are key to prevention. It is always important to regularly monitor and balance checking accounts to quickly spot anomalies, report suspected fraud and stop future fraud attempts.

The FedPayments® Reporter Service for Check Services allows your institution to offer additional fraud detection for both business customers and consumer accounts. For business accounts, the Corporate Payor Report allows corporate customers early access to review check details the morning of presentment (via scheduled, secure push emails) to help meet return time frames. For consumer accounts, a financial institution-level Check Advanced Notice Payor Report may provide internal staff more time to review the highest dollar checks for potential alterations and suspicious endorsements.

Contact your relationship manager to learn more about how FedPayments Reporter for Check Services could help your financial institution protect itself from check fraud. Stay informed of the Fed’s efforts to support payment security and mitigate fraud by exploring (Off-site) for the latest news and perspectives.