From Risk to Resilience: Stopping Check Fraud Before It Starts
Check Fraud Is on the Rise—Are You Ready?
A United States Postal Service employee was recently sentenced for stealing $24 million worth of checks—just one example of a growing financial crime that’s costing banks billions.
Check fraud is fast-growing threat. In 2024 alone, banks reported over 718,000 suspicious check fraud incidents. That’s nearly double from just three years ago. The problem isn’t going away. In fact, 46% of bank leaders say check fraud is one of their biggest security concerns for 2025, and financial institutions are ramping up their technology investments to stop fraud before it happens.
So, what’s driving this surge in check fraud—and more importantly, how can banks and credit unions protect their customers and bottom line?
The Growing Threat of Check Fraud
How Fraudsters Operate
Check fraud often starts with mail theft. Criminals intercept checks, gain access to account details and manipulate them through:
Check washing – using chemicals to erase and alter check details
Check cooking – digitally altering checks before printing counterfeit versions
These altered checks are then deposited by money mules, who withdraw the funds before the fraudulent activity is detected—leaving financial institutions to absorb hefty losses.
According to the Financial Crimes Enforcement Network (FinCEN), fraudsters most commonly:
Alter stolen checks before depositing them (44% of cases).
Use stolen checks to create counterfeit versions (26%).
Forge signatures on stolen checks and deposit them (20%)
Related Case Study: National Bank Stops Fraud Before It Starts with Customer Alerts
The Impact: Why Banks Can’t Ignore Check Fraud
Even as digital payment use grows, checks remain a major target for fraud. Nearly 61% of Americans still use checks, and banks are financially responsible when fraud occurs.
For Financial Institutions, the Risks Are High
Financial losses – In just three quarters of 2023, Regions Financial Corp., a major U.S. bank, lost $135 million to check fraud. Truist, the nation’s eighth-largest bank, reported a $33 million increase in fraud-related losses in a single quarter.
