Multiple Faces Detected
February 14th, 2025
As digital transactions grow, so do financial fraud schemes.
According to Nasdaq’s 2024 Global Financial Crime Report, fraud scams led to $485.6 billion in global losses in 2023, with criminals targeting both digital and traditional payment methods.
Check fraud accounted for $21 billion in losses across the Americas, a 25% increase from the previous year, making up 80% of all check fraud worldwide.
Scammers continue to find new ways to alter, forge, and intercept checks, taking advantage of outdated security measures. As financial crime evolves, knowing how these scams work is the first step to avoiding them.
Here’s what you need to know:
Why is Check Fraud Still a Major Problem?
Despite the shift to digital payments, checks are still widely used, especially for large transactions and in industries that rely on traditional payment methods. This makes them a frequent target for fraud.
Here’s why check fraud continues to be a concern:
- Checks are still in use – Many businesses and individuals rely on them, keeping fraud opportunities open.
- New fraud methods – Scammers alter, counterfeit, or steal checks to manipulate transactions.
- Security gaps – Some banks and businesses haven’t fully adopted fraud detection measures.
- Slow detection – Unlike digital payments, checks take time to clear, giving scammers a chance to take advantage.
- Easy access to information – Checks include account and routing numbers, which can be misused.
New Tricks Scammers Are Using in Check Fraud
The Financial Trend Analysis Report 2024 declared check fraud as a growing concern, with criminals adapting their methods to exploit digital banking tools and outdated security measures.
Here is how scammers pull check fraud tricks in the digital age:
1. Mail Theft and Check Alteration
Mail theft-related check fraud remains the most common type of check fraud, making up nearly half of the reported cases. USPIS received nearly 300,000 mail theft complaints in just one year, a 161% increase from the previous period.
Fraudsters often intercept newly ordered blank checks or those sent for payments. They erase and rewrite details, changing payee names and amounts before cashing them. Since checks take time to process, scammers can withdraw funds before the fraud is detected.
2. Check Washing
Check washing is one of the most frequently used check fraud techniques. Altered checks made up 44% of bank fraud reports, making it one of the most effective scams.
In this scam, fraudsters use household chemicals to erase ink from stolen checks, replacing payee names and amounts while keeping the original signature intact.
Even if the check appears unchanged, account and routing numbers remain the same, giving criminals a way to commit further fraud. Many washed checks are then deposited through ATMs or mobile banking apps, avoiding direct verification by bank staff.
3. Mobile Deposit Fraud
Scammers are exploiting remote check deposits as mobile banking expands. In 2023, 61% of cases were reported where fraud was executed from mobile devices.
Fraudsters deposit fake or stolen checks through mobile banking apps, often using fake names or forged IDs to bypass verification.
They pressure victims to withdraw the money before the check clears, making it seem like a routine transaction. When the check is later flagged as fraudulent, the victim is left responsible for the full amount.
This method is especially common in online marketplace scams, where criminals offer to pay via remote deposit but demand fast cash withdrawals. By the time the fraud is detected, the scammer has already taken the money and vanished. It’s important to spot unfamiliar transactions in your online accounts early to prevent fraud.
4. Business Email Compromise (BEC) & Payroll Fraud
Scammers are using email deception to manipulate businesses into making fraudulent payments. Business Email Compromise (BEC) scams contributed to $10 billion in global losses, making it one of the most damaging cyber-enabled frauds.
In many cases, fraudsters use fake bank websites and phishing emails to trick employees into providing sensitive financial information. They hack or spoof company email accounts, posing as employees, vendors, or executives, and send convincing payment requests, tricking payroll departments or finance teams into issuing checks or direct deposits to fraudulent accounts.
Since these emails appear legitimate, businesses often detect the fraud only after the funds are gone.
For example, scammers have been known to impersonate employers on job sites like Indeed, tricking job seekers into depositing fake checks. This scheme works well in large organizations where payment approvals are routine. Running a background check before processing transactions can help prevent these losses.
5. Fake Cryptocurrency Investment Scam
Scammers are exploiting the cryptocurrency boom with fraudulent investment schemes. In the first three quarters of 2024 alone, more than 65,000 investment scams were reported, many involving fraudulent checks.
Victims receive a check, supposedly their “initial earnings” from a crypto deal. The scammer instructs them to deposit the check and use the funds to buy more cryptocurrency, promising even bigger returns. Once the money is sent, the check bounces, leaving the victim with nothing.
This scheme relies on fake profits to build trust, making it appear like a legitimate investment opportunity until the fraud is uncovered.
6. Counterfeit Check Fraud
Scammers are using stolen checks as templates to create realistic fakes, replicating banking details and signatures to trick victims into depositing fraudulent checks. Counterfeit checks accounted for 26% of reported check fraud cases, making this a widespread tactic.
Fraudsters scan and replicate stolen checks using design software, then print and cash them using remote deposit capture (RDC) or ATMs. Some criminals mail counterfeit checks as part of fake job offers or prize scams, convincing victims to deposit the funds and send back a portion before the check ultimately bounces.
Because counterfeit checks often look legitimate, victims may not realize they’ve been scammed until the funds are reversed, leaving them responsible for the losses.
7. Selling Check Information Online
The use of dark web marketplaces has turned stolen checks into a commodity. According to Georgia State University research, personal checks typically sell for $175, while business checks go for $250.
Rather than cashing stolen checks themselves, fraudsters sell account numbers, signatures, and payee information to others who use the data to create counterfeit checks, commit identity theft, or conduct wire fraud.
This method allows criminals to profit while avoiding direct involvement in fraudulent transactions, making it a growing part of the underground economy. Hence, it’s important to keep personal information secure to prevent identity theft and financial fraud.
How to Spot and Protect Yourself from Check Fraud?
Recognizing fraud early can prevent financial loss. Here are five key ways to protect yourself:
- Verify Unexpected Payments: Be cautious if you receive a check from an unknown sender or for an amount higher than expected, especially in job or investment offers.
- Monitor Your Bank Statements: Regularly review your transactions for unfamiliar payments or withdrawals linked to your checks.
- Use Secure Payment Methods: Whenever possible, avoid mailing checks and opt for secure online transactions such as direct bank transfers, digital wallets, or credit card payments,
- Know Your Digital Footprint – Running a background check on yourself can help you detect if your personal or financial information has been exposed.
