How to combat the growing threat of check fraud with check positive pay

In 2022 alone, banks issued 680,000 reports of check fraud to the Financial Crimes Enforcement Network (FinCEN) — an increase of 94 percent over the previous year.

How does check fraud happen? And, what is the impact of check fraud on banks and credit unions?

Read on to learn more about this troubling trend and how financial institutions can protect themselves against the growing threat of check fraud.

Stolen, counterfeit, “washed:” How does check fraud happen?

Check fraud is the process of cashing stolen or counterfeit paper checks to steal funds directly from a victim’s bank account. The most common form is “check washing” where fraudsters steal a check from the mail, change the name of the payee and the amount, and then, cash the fraudulent check and pocket the funds. Criminals alter stolen checks using technology, household products like nail polish remover or cleaning solvents, and in some cases even by scraping ink off the check or lifting it with tape.

 

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