WASHINGTON—The Financial Crimes Enforcement Network (FinCEN) has issued an alert to financial institutions on what it said is a nationwide surge in check fraud schemes targeting the U.S. Mail.
FinCEN noted fraud, including check fraud, is the largest source of illicit proceeds in the United States and is one of the anti-money laundering/countering the financing of terrorism (AML/CFT) National Priorities. In coordination with the United States Postal Inspection Service (USPIS), FinCEN said it has identified red flags to help financial institutions detect, prevent, and report suspicious activity connected to mail theft-related check fraud.
According to FinCEN, criminals have been increasingly targeting the U.S. Mail and United States Postal Service mail carriers since the COVID-19 pandemic to commit check fraud.
Payment Checks Stolen
“Criminals typically steal personal checks, business checks, tax refund checks, and checks related to government assistance programs, such as Social Security payments and unemployment benefits,” FinCEN said. “Following the initial theft and fraudulent negotiation of the stolen checks, criminals may continue to exploit their victims by using the personal identifiable information found in the stolen mail for future fraud schemes, such as credit card fraud or credit account fraud.”
In addition, FinCEN said Bank Secrecy Act reporting for check fraud has increased significantly in the last three years. It noted that in 2021 financial institutions filed more than 350,000 Suspicious Activity Reports (SARs) to FinCEN to report potential check fraud, a 23% increase over the number of check fraud-related SARs filed in 2020.
“This upward trend continued into 2022, when the number of SARs related to check fraud reached over 680,000, nearly double from the previous year’s amount of filings,” FinCEN stated.
What Consumers Should Do
FinCen said in addition to filing a SAR, as applicable, when suspecting this type of fraud, financial institutions should refer their customers/members who may be victims of mail theft-related check fraud to the USPIS at 1-877-876-2455 or https://www.uspis.gov/report.
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