Check Fraud In Cincinnati

Key Points:

  • Businesses face many security risks and threats, and check fraud is now a growing criminal activity.
  • The critical element in all check tampering crimes is a check.
  • The best protection against check fraud is to limit the number of checks you write and always keep your checking information secure.

In cybersecurity, it can often be easy to forget that other crimes exist. But let’s face it, criminals will do anything they can to steal your money, and recently there has been an increase in an old favorite, check fraud.

Check fraud is incredibly widespread. Unfortunately, because there are several different types of check fraud, no one knows the exact number of people and businesses affected or the total losses victims incur.

However, a 2016 global fraud study estimated that the average organization loses around 5% of its revenue due to fraud every year. Check fraud is one of the most significant threats facing organizations today, and you need to take precautions to protect yourself.

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What Is Check Fraud?

Fraud occurs when a person intentionally acts to deprive another person or business of money using deceptive means. There are several ways that criminals attempt to commit check fraud, including:

  • Forgery – signing or endorsing a check that is payable to someone else
  • Theft – stealing checks to use for fraudulent purposes
  • Paper hanging – writing checks on a closed account
  • Check kiting – intentionally accessing funds deposited in an account before the bank can collect them from another account
  • Washing – using chemicals to remove printed information from a check
  • Counterfeiting – printing checks using information from the victim’s account

How Do Criminals Steal Checks and Commit Fraud?

Criminals find many ways to get hold of your checks and personal information. The setup is easy. First, the thief looks through your outgoing mail for anything that looks like it might contain a check. For example, a criminal can intercept mail addressed to your mortgage company, the IRS, or a local vendor.

If they find an outgoing statement containing a check, they use a few avenues to commit fraud.

The criminal may attempt to cash the check themselves by fraudulently opening an account in the name of the person or entity the check was initially intended to pay. For example, a criminal could open an account and alter the “I” in IRS to an “M” and add a name, making the check read payable to “MRS Whoever,” or they may simply create an account in a name that has the initials IRS and claim that’s their initials on the check.

Criminals can also make a new check with their company bank account but change the recipient. They use the same check number and payment amount, so it can be challenging to spot. Even if you were paying attention, the name change could quickly go unnoticed because the check number and amount match your records.

In a recent incident, a client had mail stolen which led to a $50,000 loss. In this instance, criminals stole multiple checks from the business. Consequently, an invoice for $50,000 was paid to a criminal instead of the vendor. Luckily, the fraud was eventually caught, and authorities could apprehend the criminal. Fortunately, in this case, the bank was tipped off by a spelling error in the company name. Had it not been for the vigilance of a bank teller, the business could have suffered a devastating loss.

How Can I Protect Myself and My Business?

Your first step should be to limit the number of checks you send through the mail. That little red flag on your mailbox to alert the mailman that there is outgoing mail is also a red flag alert to criminals that something valuable, such as an outgoing check, may be inside.

Instead, make payments to vendors electronically through trusted, verified online locations. Reducing the number of traditional paper checks you write and mail significantly lessens the risk of your information being stolen. Sometimes, there may be no way to pay a vendor other than with a check, but if you must mail it, take precautions and drop it in a mailbox or take it to the post office.

While criminals use several methods, the critical element needed to commit check fraud is a check. Therefore, it’s vital to do everything in your power to keep your checks and the information on them safe. Because checks are relatively simple to reproduce, they protect your account number, routing number, and other information a criminal could use to print a fake check.

Monitor your bank account and reconcile your bank statements regularly to look for discrepancies. Many banks have programs to ensure the money in your account stays safe. Work with your bank’s fraud department to set up processes to spot fraud faster, such as setting up text alerts when a check from your account is drawn over a certain dollar amount.

Always keep your checks and statements locked up out of sight and away from prying eyes. If you allow a housekeeper, contractor, or another service person inside your home, you don’t want your account information easily accessible to them. Also, never leave your checkbook in public, even if you store it in your vehicle. It’s an easy task for a criminal to break into your car and steal your checks.

Keep Yourself and Your Business Safe

Check fraud is an unfortunate occurrence that is increasing in frequency. It’s critical to take the threat seriously and take steps to protect yourself and your business. The negative fallout from becoming the victim of check fraud can be devastating.

At 4BIS.COM, we are the leading security experts in Cincinnati and the surrounding area. Whether it’s protecting you and your business from the latest cyber threat or a more traditional crime such as fraud, we are here to help. We have bank contacts that can help you manage your risk and make your company more secure. Contact us today to learn how we can help keep you and your company safe.

Written by James Forbis
Posted on: October 7, 2022
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