Check Fraud Is One of the Fastest Growing Types of Fraud

(Adapted from “What is Check Fraud? How it Happens and Why It’s Increasing”, written by Amy Miller, AFC® in partnership with the American Association of Credit Union Leagues, America's Credit Unions, and TruStage.)

Check fraud may sound like an old problem, but it’s still one of the fastest-growing types of financial fraud, and it can affect anyone. While many payments now happen online, millions of people still use paper checks to pay rent, send gifts, make business payments, or cover bills. And any time money is moving, fraudsters are paying attention. Today, criminals use a mix of theft, scams, and technology to steal money and personal banking information.  

WHAT IS CHECK FRAUD? 

Check fraud happens when someone steals, alters, or misuses a check to access money or banking information. Common examples include stolen checks, altered checks, fake checks, forged signatures, and scam-related fake payments.

 CHECK FRAUD CAN ALSO BE DIGITAL

Check fraud isn’t limited to paper checks anymore. Today, scammers may also use electronic checks or digital methods, including:

·      Sending fake checks electronically via email or messaging apps

·      Asking you to deposit checks through a mobile banking app

·      Combining fake checks with requests to send money back quickly

Even if a check appears in your account, it does not always mean the money is real or finalized.

Why Is Check Fraud Increasing? 

One of the biggest reasons check fraud continues to rise is mail theft. Criminals often target residential mailboxes, apartment mailrooms, and public mail collection boxes looking for outgoing payments like rent checks, utility bills or gifts. Once a check is stolen, it can be altered, copied, or used to access personal banking information…turning one stolen envelope into a much larger financial problem.  

Scams Are Evolving 

Check fraud is no longer limited to physical theft. Scammers now use fake job offers, prize notifications, and online marketplace scams to send fake checks and pressure victims into sending money back. 

Fraud Spreads Faster Online 

Social media, online job boards, and digital marketplaces make it easier for scammers to reach more people, especially younger adults. A fake opportunity can spread quickly and look legitimate. 

WHO IS MOST AT RISK? 

 Anyone who uses checks, or receives them, can be at risk. But some groups may face greater exposure. 

·      Renters paying by check

·      Small business owners

·      Families managing shared finances

·      Older adults 

·      Young adults targeted by job scams 

 WHY IT MATTERS 

Check fraud can create more than just financial loss - it can disrupt your life. 

·      Victims may face: 

·      Unauthorized withdrawals

·      Delayed bill payments

·      Missed rent or utility payments

·      Overdraft fees

·      Account freezes

·      Stress and time spent resolving fraud  

For some households, even a temporary loss of funds can create serious challenges.  

Simple Ways to Protect Yourself

·      Mail checks from inside the post office

·      Avoid leaving outgoing checks in your mailbox overnight

·      Use gel ink and avoid leaving blank spaces on checks (blank space can make it easier for scammers to alter information)

·      Monitor your bank account

·      Set up account alerts

·      Be cautious of unexpected checks, checks received electronically or through messaging apps

·     Never send money back on “pending” deposits alone

The more you understand how check fraud works, the better prepared you are to recognize suspicious situations and protect yourself. For more tips, visit AmericaSaves.org.