Check fraud cases spiked 94% in 2022 despite drop in check usage

Cases of check fraud nearly doubled between 2021 and 2022, according to the Financial Crimes Enforcement Network (FinCEN). The network received about 680,000 reports of check fraud from banks in 2022, up from 350,000 reports in 2021. Part of the increase is due to the COVID-19 pandemic, as government relief checks became an attractive target for criminals.

“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 in an alert it sent out back in February. “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.”

The U.S. Postal Inspection Service reported roughly 300,000 complaints of mail theft in 2021, as well–more than double the prior year’s total.

Check fraud increased despite a significant drop in check usage. Americans have largely switched to paying for their services with credit and debit cards.

According to the Federal Reserve, Americans wrote roughly 3.4 billion checks in 2022, down from nearly 19 billion checks in 1990. Small businesses still use checks frequently.

In response to the rise in check fraud cases, postal authorities and bank officials have warned Americans to avoid mailing checks if possible, or at least to use a secure mail drop such as inside the post office. Banks have begun watching for signs of fraud at branches and through mobile check deposit services.

Banks have also started training branch employees to look at check numbers and notice when a check is being written for a larger amount than someone’s bank history would indicate. Banks also now deploy software at their branches that can tell how risky a check might be.