Check fraud is on the rise, at least in the US

Back in the day, I printed my business checks on my plain ole laserjet printer. NO special, magnetic MICR ink. I printed a few at a time and they were kept in the safe.
All the banks accepted them with no question.
 
@britechguy most any Laser Printer you can find a MICR toner for them.

I will say however simply printing and cashing/depositing a check is dangerous as often you need and account or they require photo ID to cash the check. This means you would need to invest more in other fraud to plausibly have any hope of getting away or be long gone before the fraud was discovered and be wanted for fraud & theft after discovery.
 
Porthos said:
Back in the day
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Key words. Banking regulations have changed over the years. What's required of a check itself has changed extensively since I was a small child.

There was a time where checks were essentially just printed on check paper, with no other requirements at all. I'm old enough to remember when MICR (Magnetic Ink Character Recognition) "became a widespread thing."


The advent of mobile check deposit makes it possible to attempt to deposit a check sans any MICR checking. But there are controls over mobile deposits that don't exist for in-person ones.

https://www.fdic.gov/regulations/ex.../insights/sisum09/sisummer2009-article02.html

All things in banking are pretty highly regulated.
 
Blues said:
@britechguy most any Laser Printer you can find a MICR toner for them.
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I'm aware of that. Hence the reason I brought up the need for MICR ink/toner.

While check fraud is a "high dollar" problem when taken as a whole, it becomes one because so many "small time" actors engage in it. It's another crime that's "smash and grab" in nature because you can't set up months and years long check fraud with any ease. You've noted several reasons for the impossibility of "big time check fraud" on the part of any individual actor.

Credit card fraud is largely the same. The total dollars involved are absolutely huge. The amount any single fraudster gets from any single card are generally not.

Money transfers are monitored starting with financial institutions and, as amounts go up past certain limits, by governments as well.
 
I think from a business stand point the worries around checks are check fraud on your own account and simply getting a bad check, one for which the funds don't exist, and the 2nd being the more common and immediate concern. I continue to accept checks myself but I tend to have enough client info that were they to write a bad check I wouldn't have to track them down or anything.
 
Blues said:
I continue to accept checks myself but I tend to have enough client info that were they to write a bad check I wouldn't have to track them down or anything.
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I have no choice but to accept checks. I don't accept credit cards, so it's either check or cash. I have many repeat customers and, of course, know them well. When people ask if I'll take a check I say, "Of course," then add, jokingly, "I also know where you live."

It may just be the area that I live in, coupled with having a good "sixth sense," but I have never, even once, had a check bounce on me, and I have taken a lot of checks. I just shredded a pile from the last several months of remote check deposit (RDC) via my smartphone two days ago.

One thing I learned about RDC, at least at my financial institution, is that you never destroy the check until you are certain that the deposit has actually cleared. I once did a remote deposit and had promptly shredded the check afterward, but something went wrong, I believe I had screwed up one of the check images with out realizing it, and they needed it sent through again. I had to ask the customer to write that check again. I've not repeated that mistake (in either sense, as the whole situation has never recurred, either). I know that each and every RDC is actually reviewed by a human teller before final approval at my CU.
 
Sky-Knight said:
The only reason the system functions is due to it being subsidized by the US taxpayer via FDIC insurance, and other anti-risk measures banks pay for also called insurance.

This injects measurable inflationary pressures into our monetary system... something that we all suffer from daily. But by all means! "The risk is low".
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In complex industrial societies, all sorts of services society as a whole (or most of it, anyway) either wants or needs from its government are paid for by taxes (and fees). No one ever said it better:

Taxes are what we pay for a civilized society.
~ Oliver Wendell Holmes, Jr.

with a pretty close second being:

Progressive income taxation is based on the very reasonable principle that those who have benefited the most from living in an ordered society should contribute the most to meeting the social needs of the nation.
~ Sheldon H. Laskin

Your opinion about inflationary pressures is just that: your opinion. Checking has been a part of the monetary system since before either one of us were born and worrying about it is like worrying about the sky being blue. It's a fact and will remain one, by your own admission, likely for decades to come.

In a modern society where everyone thinks their opinion deserves to be heard nothing annoys me more than individuals who mistake their personal preferences for fact.
~ "TheCruyffGurn" in comments on The Guardian, 8/13/2014
 
@britechguy All of that is true, but it doesn't change the fact that the way check processing works is as insecure as email was in the 60s. The process needs hardening, but it never gets it.

What it has gotten is AGGRESSIVE monitoring. If you pass a bad check they will find you. A mitigating control that has for the most part left the system in a mostly usable state. That is... until economic reality pushes entire populations into desperation status. That's what we're seeing here, reported by multiple media outlets. The percentages though, are certainly inflammatory.

Take for example this lovely bit of "journalism": https://orbograph.com/banks-reporte...m-2021-to-2022-according-to-us-treasury-fcen/

It reports the national cases of check fraud in 2021 were "nearly 250,000", and in 2022 increased to 460,000.

Now sure, that's an increase of 84% as they calculated that's true. But a half a million incidents over the entire nation over an entire year is statistically nothing to be worried about.

I get annoyed because the controls we have in place could be better, should be better, and were they better not only would this be a solved problem entirely, eliminating this statistic functionally entirely. But it would also have a positive impact in other areas of our sociopolitical structure. All of which acts to reduce costs in banking, which is fundamental in reducing costs to exist in our civilization.

Meanwhile, I stand by what I said... the entire system is nothing but risk. But I will clarify further to say it's more risky to write checks than it is to receive them. The check writer is the one exposing themselves to fraud by exposing their bank account and routing numbers. The only risk the check recipient accepts is the usual annoyances associated with a rubber check.

I do think however, that if people knew how weak that system was they'd be rather upset about it. Well, except you of course Brian... you seem perfectly content to operate systems with massive flaws in them just because they aren't a statistical problem yet. Are you sure you aren't a conservative? ;)
 
Sky-Knight said:
Well, except you of course Brian... you seem perfectly content to operate systems with massive flaws in them just because they aren't a statistical problem yet.
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Except me and millions upon millions of others. If ever there were an instance where, overall, "If it ain't broke, don't fix it," applies its with checks overall.

The perfect is the enemy of the perfectly functional, warts and all.

Massive flaws are only massive flaws when they cause massive problems on a daily basis. Hence, the checking/ACH system in the USA is not, by definition, filled with massive flaws. As I keep saying, and you choose to ignore for reasons I cannot fathom: There is virtually no business that's more concerned with preventing loss of money (and the need to reimburse, when it occurs through fault of the institutions) than banks.

The risk of checks (other, perhaps, than them bouncing) is just low. Period. End of sentence. If it weren't, the "hardening" you insist is needed would have been undertaken, long, long ago. There is, contrary to your oft-asserted opinion, "secure enough for the purposes intended."

------ Addendum ------
Credit Card Fraud Statistics ($27.86B in 2018, $28.65B in 2019, $28.43B in 2020, $32.34B in 2021. It was at $18.11B all the way back in 2014)

Check Fraud Statistics ($24 billion [estimated] in 2023, up from approximately $12 billion in 2018. There has been a recent significant uptick, no doubt.)

Now which of those two systems is “most hardened” and which has, and has had, significantly higher losses due to fraud, year over year, for many years now?

You can’t eliminate all fraud, ever, and there are compromises made for ease of use over much tighter security. But if I have to choose which system is more problematic, and definitely in need of more attention, it’s credit cards.

But neither is being ignored. Banks do NOT like losing money. They don’t like it AT ALL. But they also realize that they have to decide when “secure is secure enough.” Perfect security would completely preclude any real ease of use. And let’s not mention that this is, and always will be, an endless game of cat and mouse. No matter what the next “latest and greatest” security measures might be (chip credit cards, anyone?) those who wish to commit fraud will surely find a way to do so.
 
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@britechguy I don't want perfect, but I do expect a security arrangement approximate to what we use on Credit Cards as a minimum. There shouldn't be two systems at all... they're just authentication and authorization processes defining a fund transfer...

But oh.... wait... I forgot...

VISA/MC created PCI out of whole cloth just to avoid regulation... not to mention bribe the western governments of the world to enforce it.

And you're right, Banks do not like to lose money. Which is why fraud is allowed to perpetuate, they make more off watching it happen then actually stopping it.

You seem to think this problem isn't solvable, that's incorrect. It's only unsolvable within the current socioeconomic system we live in. Your owners have spoken, you'll just be used to all this pain all the time. How free you are...

P.S. Chip card transactions are basically unassailable. CC fraud remains on the transactions that cannot use the chip. Which is why merchants pay more for those.
 
This is why I don't do checks. At all. Not personally, not for my business. I don't accept them or pay with them. Cash or card. I'll even take crypto and have on several occasions but checks are just too easy a target for fraud. Checks were designed for a different world back when we lived in a high trust society. That society has been gone for a long time.
 
frase said:
Cheques are like fax machines to me, obsolete.
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I wish they could be for me, but they can't be. I do accept PayPal payment in addition to cash and check, but too many of my clients are of the age demographic where checks are still the most common form of payment.
 
britechguy said:
I wish they could be for me, but they can't be. I do accept PayPal payment in addition to cash and check, but too many of my clients are of the age demographic where checks are still the most common form of payment.
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Same here. I've gotten many to give me a credit card though if I ask for it. Most of the older folks around my area I trust not to screw me over on a check.
 
lan101 said:
Most of the older folks around my area I trust not to screw me over on a check.
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I have never had anyone bounce a check on me, and that includes college students (though they often pay cash). I don't mind accepting checks at all, as the risks of check fraud mostly involve their time "in transit" between the check writer and the intended recipient. In my case, they're in my hands immediately, in most cases, and since I use mobile banking the check itself never actually leaves my hands, and is shredded after the deposit has been confirmed as having cleared.

I realize I'm lucky, but given the track record 16 years in length with accepting checks, I just don't expect problems. My clients just aren't check bouncers.
 
britechguy said:
I have never had anyone bounce a check on me, and that includes college students (though they often pay cash). I don't mind accepting checks at all, as the risks of check fraud mostly involve their time "in transit" between the check writer and the intended recipient. In my case, they're in my hands immediately, in most cases, and since I use mobile banking the check itself never actually leaves my hands, and is shredded after the deposit has been confirmed as having cleared.

I realize I'm lucky, but given the track record 16 years in length with accepting checks, I just don't expect problems. My clients just aren't check bouncers.
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Yep same here...I've had a couple people before ask me to hold the check for a few days and I did so and it worked out fine.

I wouldn't do that on a big money job but small ones I don't mind at all.
 
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