Financial experts are reporting an alarming rise in check fraud scams this 2023. At the time, crime rates in such instances increased to 400%. Thieves siphoned off a staggering $26.2 billion from unsuspecting victims across the United States.
Despite the increasing incidence of high-tech scams like crypto catfishing and AI deepfakes, old-school check fraud has proven just as effective – although more catastrophic in its impact on individuals and banks.
The Evolution of Check Fraud
Check Fraud Spikes 400% in 2023—Here’s How Thieves Steal Money
Money Knack/Unsplash
It is hard to imagine how something as old-fashioned as check fraud could resurface and make a major comeback, but fraudsters have found new ways to exploit these old-school methods. According to the Financial Crimes Enforcement Network or FinCEN, one tactic that criminals are using is to purchase universal keys that can open any USPS drop box or purchase books of blank checks from the Dark Web.
Others just target unsuspecting victims by swiping checks directly from their mailboxes.
Once they have the checks in hand, criminals use household chemicals such as acetone to remove the original ink so that they can rewrite their own checks with enormous amounts. They either put the changed checks in an ATM or deposit them using bank apps so that money goes into their account instantly before the bank can trace any possible fraudulence.
Once the money is available, fraudsters are off and running, using the embezzled cash to purchase everything from luxury goods to real estate investments.
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What Are Banks to Combat Check Fraud?
As check fraud becomes more rampant, banks are stepping up their efforts to fight back. To prevent fraud, many financial institutions have implemented stricter deposit policies, including longer hold times on deposited checks.
This means that if you’ve noticed that your funds are taking longer to clear, it’s likely due to banks taking extra precautions to verify deposits and ensure they aren’t fraudulent.
Recently, a glitch on TikTok exposed how vulnerable J.P. Morgan’s instant access is, and bad checks were deposited fraudulently, leading to lawsuits. It shows how check fraud has grown and is in a constant evolution, including that between banks and criminals.
Practical Ways to Defend Yourself from Check Fraud
Fortunately, there are some simple, effective steps you can take to avoid falling victim to check fraud, according to USA Today.
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