Banks saw an 84% increase in check fraud in 2022, according to a recent CNBC report.
02/07/2023 3:10 P.M.
1.5 minute read
Check fraud scams, in which criminals steal checks, “wash out” the names, write in new ones and cash them under false identities, are increasing, thanks in part to the large number of paper checks issued for COVID-19 pandemic relief.
A recent CNBC article reported that:
- “In 2021, banks reported nearly 250,000 cases of check fraud nationwide, according to the Financial Crimes Enforcement Network, a unit of the U.S. Treasury Department. By last year, that number exploded: nearly 460,000 check fraud cases were reported – an increase of 84%.”
- “Check washing schemes can happen one of two ways: Criminals can steal checks out of mailboxes and physically erase the name of the payee using technology like photoshop and replace it with a bogus identity and deposit it into their account or they can take or create counterfeit checks under a real account number and deposit it under a fake identity.”
- “One app in particular, Telegram, has made it easier for organized crime groups to recruit, train, organize and execute the schemes” in part because the platform “allows users to send encrypted messages to each other and groups, [making it] popular among criminals because they can hide their identity behind anonymous usernames, according to U.S. law enforcement officials.”
The article explains how the age-old forgery scam—known as check washing—has been enhanced with today’s technology, as well as how banks, law enforcement and the U.S. Postal Service are responding.
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