In today’s digital age, many people are becoming increasingly aware of the growing threat of high-tech scams. There are cryptocurrency frauds, mobile malware that target cellphone data, and even artificial intelligence that can clone voices to trick people into giving up personal information. But what many bankers are seeing most is old-fashioned check fraud.
“Fraudsters have reverted back to stealing checks,” said Jeff Taylor, head of commercial fraud forensics for Regions Bank.
While electronic transactions and online banking have become the norm, traditional paper checks may seem outdated. So, it is understandable to forget about this classic scam, but fraudsters are banking on that. They have become increasingly aggressive in their methods, making it crucial for people and businesses to be aware.
“Thieves steal from the mail and then alter the checks to suit their fraudulent activity and criminal enterprise,” said Taylor. “Assaults on US Postal Service workers have increased dramatically, enabling fraudsters to acquire checks and documents to facilitate this fraud.”
According to the 2023 Association for Financial Professionals Payments Fraud and Control survey, business-to-business checks are declining, but they are still the number-one payment channel subject to fraud attack. 63% of responding companies reported being a victim of check fraud in 2022.
Scammers have become more sophisticated in their approaches to check fraud.
Their methods may include:
- Mail Theft – Checks are being stolen from the mail, then “washed” and altered – and then scammers try to deposit them at various banks. You may have even seen the headlines about scammers getting a hold of the universal keys that unlock those big, blue mailboxes the Post Office uses. They want the keys so they can get the checks.
- Social Media – The criminal underground network is creating a booming black market for stolen checks.
- New Accounts or Unexpected Checks – Another twist is fraudsters trying to open new accounts to deposit stolen checks and quickly get the cash. Banks have various safeguards in place, but that doesn’t keep fraudsters from trying. Or they might convince legitimate customers to cash unexpected checks. The scammers then take off with the funds.
“If your business still writes checks, and you are unable to convert those payments to a digital alternative, please contact your financial institution and enroll in Positive Pay with Payee Name Verification,” said Taylor.
There are additional measures people and businesses can take to help keep their money secure. Regions Bank suggests these steps:
- Guard and control your check stock.
- Never sign checks in advance, leaving the payee name and amount fields blank.
- Convert check payments to digital or electronic payment channels.
- If you aren’t expecting a check, don’t deposit or cash it and then follow with an outgoing wire at someone else’s instruction.
- Avoid unattended or remote mailboxes for mailing checks.
- Balance your checkbook regularly, review all transactions posting to your account, and report anything unusual to the bank immediately.
If you find that you may have been the victim of check fraud, notify your banker immediately to have the best chance of getting your money back. Regions’ branch teams are happy to discuss these and other fraud-prevention steps. You can also learn more at regions.com/stopfraud. By taking a new look at an old scam, you can help keep your money protected.
The information presented is general in nature and should not be considered, legal, accounting or tax advice. Regions reminds its customers that they should be vigilant about fraud and security and that they are responsible for taking action to protect their computer systems. Fraud prevention requires a continuous review of your policies and practices, as the threat evolves daily. There is no guarantee that all fraudulent transactions will be prevented or that related financial losses will not occur. Visit regions.com/STOPFRAUD or speak with your Banker for further information on how you can help prevent fraud.
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