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In an era of digital banking and online fraud alerts, it might seem surprising that mail theft check fraud has surged to alarming levels. Criminals are increasingly targeting physical checks, exploiting vulnerabilities in traditional mail processes to steal money. This type of fraud, particularly the theft of mailed checks, has cost Americans hundreds of millions of dollars in recent years. Today, we’re breaking down the findings from a recent report on mail check fraud by the Financial Crimes Enforcement Network (FinCEN) and sharing actionable steps you can take to protect yourself and your business from this resurgence in mail theft.

The Alarming Rise of Mail Theft Check Fraud

FinCEN reported that between February and August 2023 alone, over 15,000 cases of mail theft-related check fraud were documented, with the total fraud amount reaching over $688 million. This six-month window saw staggering levels of attempted and completed check fraud cases, underscoring how critical it has become for both individuals and businesses to stay vigilant.

Mail theft check fraud doesn’t just pose risks for large metropolitan areas; it’s affecting communities of all sizes. In fact, Illinois ranked as one of the top five states for check fraud, showing that this issue hits home for many. Even in an age of heightened digital fraud concerns, these criminals are reverting to old-fashioned methods, making traditional checks a primary target.

Why Is Mail Check Fraud Rising Now?

A significant spike in mail theft occurred during the COVID-19 pandemic, driven by an increase in checks sent through the mail for government aid and unemployment relief. According to the U.S. Postal Inspection Service, between March 2020 and February 2021, they received over 299,000 mail theft complaints, marking a 161% increase from the previous year. Even as the world has moved on from pandemic-era stimulus, the trend of mail check fraud has only worsened.

Between October 2021 and October 2022, there were more than 38,000 high-volume mail theft incidents reported by the U.S. Postal Service. Additionally, during just the first half of 2023, an additional 25,000 incidents of mail theft occurred. To make matters worse, hundreds of mail carriers have been targeted by criminals for the checks and sensitive documents they carry, demonstrating how brazen some of these criminals have become.

How Criminals Are Exploiting Mail Checks

The techniques used to commit mail check fraud vary from simple forgery to more sophisticated, organized schemes. Understanding these methods can help you detect red flags and safeguard your checks:

1. Basic Forgery and Fraudulent Endorsement: A simple tactic involves forging a stolen check by signing a fake name on the back. These criminals count on tellers missing these fake signatures or people not closely reviewing their accounts.

2. Check Alteration (Check Washing): This more advanced method uses chemicals to remove ink from a stolen check. Once washed, criminals rewrite the check with new information, often increasing the payment amount or adding a different payee.

3. Counterfeit Checks: Some fraudsters even recreate checks using graphic design and high-quality printers. Using details from stolen checks, they duplicate checks for fraudulent transactions.

4. New Account Fraud: By stealing identities, criminals can open new bank accounts and use them to cash checks or perform fraudulent transactions under someone else's name.

5. The Dark Web and Insider Assistance: Criminals can sell stolen check information on the dark web, providing data to other bad actors. In some rare cases, even postal workers or employees in banks have been involved in stealing checks or assisting in fraudulent schemes, further emphasizing the need for secure handling.

How Mail Check Fraud Impacts Us All

The effects of mail check fraud extend far beyond the individuals directly impacted. Banks often cover losses from fraud to protect their customers, and they must recoup these losses through policies and fees, impacting all account holders. For business owners, the stakes are especially high. Imagine if a large check to a vendor is stolen, leaving the business unable to pay for supplies or make payroll. When such issues arise, they can strain relationships with employees, suppliers, and customers, potentially damaging a company’s reputation.

Protecting Yourself from Mail Theft Check Fraud

The good news? There are concrete steps you can take to protect yourself and your business from becoming victims of mail check fraud:

1. Monitor Accounts Regularly

One of the simplest but most effective methods to prevent check fraud is to check your bank accounts daily. Keeping a close eye on your transactions enables you to quickly catch suspicious activity. Early detection can help prevent fraud from escalating, and if an unauthorized transaction does occur, you can notify your bank to begin the resolution process right away.

2. Use Positive Pay for Added Security

For businesses, adopting tools like Positive Pay can make a huge difference. Positive Pay is a service provided by banks to verify checks before they’re cashed. By uploading a list of checks you’ve issued, the bank can confirm that the checks being presented match your records. If there’s a discrepancy, the bank will flag it, adding an additional layer of security.

3. Avoid Writing Checks if Possible

With various digital payment options now available, it’s safer to use electronic methods rather than mailing checks. Services like Venmo, Zelle, or even bank-to-bank wire transfers provide more secure payment methods. Many banks also offer business tools like Autobooks, which allow you to invoice clients or vendors electronically and receive payments directly into your account.

4. Mail Checks Securely

If you need to mail a check, don’t leave it in your personal mailbox. Instead, take it to a post office, where it’s less likely to be intercepted. The iconic blue mailboxes on city streets may seem convenient, but even they have been targeted by mail thieves. Taking the extra step to hand your check over directly to a postal worker is worth the added security.

5. Fill Out Checks Carefully

When writing a check, fill in all blank spaces to prevent unauthorized alterations. Leave no extra space where additional information could be added, and if possible, write in all capital letters. This small step can help prevent criminals from adding extra amounts or payee names.

6. Store Your Checkbooks in a Secure Location

Always keep your checkbooks in a secure place, such as a locked drawer or safe. Don’t leave them in your car or an accessible area in your home. If you have old checks you no longer need, shred them instead of tossing them in the trash to prevent anyone from recovering your information.

7. Use Dual Verification in Business

For businesses, it’s important to have checks and balances within the organization. The person writing the checks should not be the same person reviewing bank statements. This dual-verification system can help catch any suspicious activity within the company before it becomes a larger issue.

8. Move Towards Digital Payments

If you’re hesitant to give up checks entirely, consider adopting payment systems that offer a more secure “paper trail.” Digital payments often come with built-in tracking and digital receipts, allowing for clearer evidence of payment and delivery. Services like Autobooks allow businesses to handle customer payments seamlessly, creating added convenience and security.

A Future Without Checks?

The growing popularity of digital payments raises the question: will checks eventually become obsolete? While some businesses and customers still prefer checks, especially in rural areas, banks and financial institutions continue to encourage safer, more efficient electronic payment options. Transitioning to electronic methods not only reduces the risk of fraud but also saves time and money for everyone involved.

Stay Informed and Vigilant

The rise in mail theft check fraud is a reminder that while technology can enhance security, old-school scams are still a significant threat. By following these best practices, both individuals and businesses can protect themselves from this alarming trend. From carefully monitoring account activity to adopting tools like Positive Pay, small steps can make a big difference in avoiding check fraud.

Remember, if you notice any suspicious activity or think your check has been stolen, contact your bank immediately. Banks work closely with customers to address fraud issues, but your quick action can prevent further damage. We hope this post has shed light on the realities of mail check fraud and provided you with practical steps to stay safe. Let's keep check fraud in the past—where it belongs!