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Reducing Risk & Fraud

Why Is Check Fraud So Rampant Again in the U.S.?

Ryan Boyer
Nov 15, 2022

Updated on May 29, 2024

In recent years, we have witnessed a lot of change in fraud and risk in the financial services industry. Although check circulation has been declining for some time, check fraud attempts have been dramatically increasing over the last several years.

In fact according to Aite, check fraud currently makes up around 60% of all attempted fraud against U.S. financial institutions.

Today’s Fraudsters Are Upping Their Game

With the push for EMV chip technology, we started seeing a pivot to those tried-and-true methods of virtual bank robbery. As most fraudsters do, they moved back to a well-known method of fraud – check fraud. In fact, because of sophisticated print, design, and production technologies, fraudulent checks can be virtually undetectable.

Here on our team at Jack Henry™, our manager received one of these fake checks mailed to his house. The check stock, security features, and embedded hologram features were all legitimate. In fact, these fraudsters had gone so far as to research bank executives and were able to duplicate an actual signature on the check. The only thing we could find that was an error was the MICR line check number did not match the check number in the upper right corner of the check. Aside from that, the check would be virtually impossible to detect as fraudulent. It could’ve easily resulted in a fraud loss for the financial institution accepting it and potentially the loss of an accountholder.

New and Emerging Scams

Unfortunately, check fraud isn’t stopping there. We have seen a large rise in the form of scams. Financial institutions we’ve worked with over the last several years are reporting that romance scams, secret shopper, and other scams continue to target new people. Fraudsters have been using social media to target potential victims as well.

Due to the rise of social media in a digital world, fraudsters are getting even more sophisticated. On the dark web, fraudsters are constantly sharing and selling personal information and best practices. With greater access to personally identifiable information in this digital world, we will continue to see check fraud increase.

We believe check fraud will continue to pose a significant threat to financial institutions for these reasons:

  1. Social Media – Telegram is creating a booming black market for stolen checks.
  2. New Accounts – Fraudsters open new accounts and exploit mobile deposits.
  3. Scams – Scams are rising, driving more check fraud attempts.
  4. Mail Theft – Checks are being stolen from the mail, then washed and deposited.
  5. Aging Tech Financial institutions aging check fraud tech can’t keep up with the newer schemes.

Social media continues to expand opportunities for fraudsters committing check fraud. A recent BlueVoyant released report states that check fraud channels in Telegram have now increased 500% (FrankonFraud).

The Postal Inspector of the U.S. also reported an alarming trend in robberies of both stand-alone mailboxes and of postal carriers. The recommendations went as far as to tell people to stop using the blue mailboxes until their state changes the locks since criminals have been able to get their hands on master keys. One of the items fraudsters are stealing is checks – especially from businesses – that they can whitewash and reuse fraudulently.

Staying Vigilant and Key Prevention Measures

What can you do when it comes to check fraud protection? As a financial institution, having a solid fraud prevention program and detection technology is a must. We expect to see check fraud attempts in many forms continue to rise. You’ll need to have solutions that are real-time and can connect to many different avenues where checks are presented: including teller, mobile, and remote deposit capture systems. Solutions that stop fraud losses in real time on suspected transactions across those channels are ideal because the funds will not leave your institution or post to an account until a fraud analyst can review the alert.

Financial institutions must remain vigilant because even “old school” check fraud attempts can be new again when there is an unsuspecting victim. Ensuring consumers are educated on how fraudsters attempt to defraud them is a proactive way to increase check fraud awareness.

Proactively stop fraud

Learn how you can get in front of rising check fraud with technology that seamlessly integrates with your Jack Henry solutions by attending our upcoming bank or credit union webinar.

For more information about Jack Henry, visit

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