Shielding Your Checks: How Consumers and Businesses Can Prevent Check Fraud

Check fraud remains a threat, despite the rise of digital payments. In 2023, the Federal Trade Commission reported that 3.6 million reports of fraud and ID theft were received with a fraud loss totaling approximately $10 billion. Of the fraud reported, 8603 reports were that of check fraud, with a loss totaling $209 million.¹  

Here are some key strategies to safeguard yourself and your business:

For Consumers:

• Minimize Check Usage: Whenever possible, opt for secure digital payment methods like online bill pay, ACH transfers, or wires. 
• Guard Your Checks: Keep your checks in a secure location and never leave blank checks unattended.
• Secure Mail: Avoid sending checks through unsecured mailboxes. Use the post office’s internal mailboxes or consider registered mail for high-value checks. 
• Monitor Bank Statements: Regularly review your bank statements for any suspicious activity. Report any discrepancies immediately to your bank.
• Shred Properly: Shred any documents containing your bank account information before throwing them away.

For Businesses:

• Positive Pay: This bank service allows the client to upload a file with authorized check information. Any check presented for payment that does not match the check issue file is flagged as an exception for the clients to review and decision to either pay or return.
• Segregate Duties: Separate check-writing and reconciliation tasks to prevent internal fraud. 
• Reconcile Bank Statements: Implement regular reviews of account activity and reconcile bank statements frequently. 
• Invest in Security Features: Utilize checks with advanced security features like watermarks, microprinting, and chemical reaction ink.
• Employee Training: Educate employees about check fraud and best practices for handling checks securely.

Additional Tips for Both Consumers and Businesses:

• Report Fraudulent Activity: Consumers and businesses should promptly report suspected check fraud to their bank and law enforcement.
• Consumer Education: Businesses can educate their customers about check security measures and encourage them to use secure payment methods whenever possible.

By following these steps and fostering open communication, consumers and businesses can reduce the risk of check fraud and protect their hard-earned money. 

If you think you may be a victim of a scam, report it to the Federal Trade Commission, your financial institution and your local police.

For additional fraud prevention resources, please visit our E-Fraud Prevention Portal.