Check fraud is back in a big way, so much so that postal authorities and bank officials are warning Americans to avoid mailing checks if possible, or at least to use a secure mail drop such as inside the post office. Banks issued roughly 680,000 reports of check fraud to the Financial Crimes Enforcement Network, also known as FinCEN, last year. That's up from 350,000 reports in 2021. Meanwhile the US Postal Inspection Service reported roughly 300,000 complaints of mail theft in 2021, more than double the prior year's total, reports the AP.
Early in the pandemic, government relief checks became an attractive target for criminals. The problem has only gotten worse, despite the fact that check usage has been in decline for decades. Americans wrote roughly 3.4 billion checks in 2022, down from nearly 19 billion checks in 1990, according to the Federal Reserve. However, the average size of the checks Americans write rose from $673 in 1990—or $1,602 in today's dollars—to $2,652 last year.
Today's check fraud criminals aren't small operations or lone individuals. They're often sophisticated criminal operations, with participants infiltrating post office distribution centers, setting up fake businesses, or creating fake IDs to deposit the checks. The AP has the story of a small-business owner who found himself a victim: Eric Fischgrund, who runs FischTank PR, a 30-person public relations firm in New York, had about 15 checks that were being mailed to him from clients stolen after they all went through the same Postal Service distribution center. Ten of them were successfully cashed by criminals.
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The checks were stolen in March, and Fischgrund became aware of the problem in April, when several of his clients who were never late missed payments. The Postal Service investigated and Fischgrund has recovered about 70% of the revenue, but some of the cases haven't yet been resolved. According to the investigator on the case, the perpetrators used technology that melted ink in the "to" field of the checks so they could write in fake names. "I don't think we'll ever go back to asking for checks as an option," Fischgrund says.
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