ATLANTA—Even in 2024, U.S. consumers and businesses have an appetite for check payments, according to one new report, which further noted that, unfortunately, so do fraudsters.
Those fraudsters are preying on payment processing gaps, the report states.
“Check volume has been declining, but check fraud is booming,” the Atlanta Federal Reserve said in a blog post.
The Atlanta Fed cited the Fed’s 2023 Small Business Credit Survey that found firms are more likely to accept checks than any other form of payment–even cash or credit cards.
“Even the U.S. Treasury sends checks–approximately 45 million in 2023 and most during tax season,” the Fed noted.
The Fed further stated that 2023 AFP Payments Fraud and Control Survey finds that "checks continue to be the payment method most vulnerable to fraud, with 63% of respondents reporting their organizations faced fraud activity via checks.
‘Unprecedented Loss’
In 2023, financial institutions reported “unprecedented” financial loss due to soaring check fraud, the Fe reported.
“One institution reported $135 million in losses and totals in the Americas were near $21 billion, according to Nasdaq's Global Financial Crime Report,” the Fed stated. “Also in 2023, suspicious activity reports filed to report check fraud reached 665,505, about a 90% increase over 2021 totals, according to the Financial Crimes Enforcement Network.”
The Root Causes
The Fed said the root causes of the current surge in check fraud include:
- Mail theft from mailboxes and mail trucks
- Images of checks sold on the dark web that can be manipulated and misdirected with imaging tools
- Fake check ATM deposits
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