Cases of check fraud are on the rise; officials warn about sending checks by mail

Check fraud has increased over the past few years, forcing individuals and small businesses to take additional safety measures or to stop sending checks through the mail altogether.

Around 680,000 instances of check fraud were reported by banks last year to the Financial Crimes Enforcement Network, also known as FinCEN, representing a sharp increase from the 350,000 reports in 2021. 

The U.S. Postal Inspection Service reported around 300,000 complaints of mail theft in 2021, more than double the previous year’s total, according to The Associated Press. 

Government relief checks became an attractive target for criminals at the start of the Covid pandemic. The problem has become worse and bank officials and postal authorities are warning Americans to use secure mail drops such as inside the post office or to avoid mailing checks altogether if possible. Victims of check fraud are also waiting longer for banks to reimburse their money due to the increase in reports.

Check usage among Americans has fallen for decades, as many have transitioned to paying with credit and debit cards. Americans wrote around 3.4 billion checks in 2022, down from almost 19 billion checks in 1990, according to the Federal Reserve. The average dollar amount of checks written has risen despite declining usage, from $673 in 1990 — or $1,602 adjusted for inflation — to $2,652 last year.

About 15 checks were stolen from a New York small business called FischTank PR in March after having been mailed, according to the AP Ten of them were successfully cashed by criminals. Eric Fischgrund, who runs FischTank PR, became aware of the issue in April and was able to recover about 70% of the revenue, but some of the cases have yet to be resolved.

Fischgrund said he’d never experienced issues with check fraud in the nearly 10 years he has run his own business. He now has a clause in invoices and new client contracts that asks for electronic payments only.

“I don’t think we’ll ever go back to asking for checks as an option,” Fischgrund said.