Check fraud, an old-fashioned crime making a modern comeback, surged by 400% in 2023, stealing $26.2 billion from Americans, according to the Financial Crimes Enforcement Network of the U.S. Department of the Treasury. Criminals are finding new ways to exploit checks, prompting banks to adopt stricter policies to combat the rising threat.
Scammers use various methods to steal checks, often targeting mailboxes. Some use universal keys to unlock U.S. Postal Service drop boxes, while others retrieve checks directly from residential mailboxes. Once they obtain a check, fraudsters employ common chemicals like acetone to erase the original details and rewrite the check for their own gain.
After altering the checks, criminals deposit them through ATMs or mobile banking apps, withdrawing the funds in increments to avoid detection. These tactics often allow fraudsters to deplete accounts before victims or banks can intervene.
Social media platforms such as Telegram, Facebook, and TikTok have become hubs for scammers to exchange tips and sell tools, making it easier for fraudulent activities to spread. Blank checks, for example, are widely available for purchase on the dark web.
Banks Tighten Policies to Curb Fraud
In response to the surge in check fraud, banks have implemented stricter deposit policies and extended hold times on deposits to ensure proper verification. These measures have led to delays in funds clearing, frustrating some customers but providing a necessary safeguard against potential scams.
Notably, JPMorgan Chase recently faced a significant challenge after a glitch in its instant deposit feature was exploited by scammers depositing fraudulent checks. The incident led to lawsuits and highlighted the need for stronger measures to prevent such crimes.
Tips to Protect Yourself Against Check Fraud
Financial experts recommend several proactive steps to guard against check fraud:
- Invest in a secure mailbox: A USPS-approved locking mailbox adds an extra layer of security, deterring casual theft.
- Monitor your accounts: Set up notifications for suspicious activity and review your bank statements regularly to spot any anomalies.
- Avoid mailing checks when possible: Use digital payment methods like Zelle, Venmo, PayPal, or ACH transfers for bills and payments to minimize risks. For sensitive items, drop mail directly at a post office instead of outdoor mailboxes.
- Sign up for USPS Informed Delivery: This free service allows you to track incoming mail and identify missing items before they arrive.
- Use fraud-resistant pens: Specialized pens designed to prevent ink alteration can help protect your checks from being tampered with.
If you suspect check fraud or notice any irregularities, immediately report the issue to your bank, the USPS, and local law enforcement. Obtain a case number to track the progress of your claim.
Check fraud may be an old scam, but its resurgence in the digital age highlights the need for vigilance and modern solutions to protect your finances.
Check fraud is on the rise, with scammers stealing billions annually. Learn how to protect your bank account with these expert tips and insights on new fraud prevention measures.
