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Why is check fraud suddenly rampant?
The check is fading away as a consumer payment method – the number of checks collected by the Federal Reserve annually has plummeted 82% over the last 30 years. So why is check fraud suddenly rampant?
Last year, banks issued about 680,000 reports of check fraud, nearly double what they reported in 2021. And one expert predicted total check fraud will hit $24 billion in losses this year, roughly twice what it was just five years ago.
How has check fraud come back into vogue at a time when paying by check is less popular? The answer is opportunity. It’s a low-tech and relatively easy crime to pull off, and there is still a sizeable pool of potential victims.
Individuals and organized criminal operations are swiping checks from residential mailboxes or the iconic blue drop-off boxes. Then, they’re removing the ink and selling the newly blank check or writing in whatever they want. They’re also picking off checks paying government assistance, Social Security, or unemployment benefits.