Intelligence Report | November 2026 - Flipbook - Page 8
Check fraud on the rise
Suspicious activity reports related to check fraud by depository institutions
145,272
2017
228,469
216,963
2019
2020
166,511
2018
501,477
528,864
521,036
2022
2023
2024
249,812
2021
Source: Financial Crimes Enforcement Network
80%
Check fraud “remains a problem
because it’s been established for
so long. Everyone understands
what the solid lines of demarcation
are, and the bad actors are able to
exploit those lines.”
beyond the simple number of suspicious activity reports filed
for check fraud, Felix says. For example, what’s the aggregate dollar amount lost to check fraud? How much is the
bank able to successfully recover? How much is ultimately
charged off as a loss?
“Revisiting the insurance policy to see what they can
actually recoup from their losses would be another measure,” she adds. The insurance policy may cover some types
Scott Baranowski, Wolf & Co.
of check fraud but not others, so that’s why it’s important to
get a handle on how those losses break down by counterfeit
checks versus stolen and altered checks.
The downside risk of filing claims on the insurance policy
is a potential for increased premiums, Baranowski says. At the
94%
of bank leaders reported that their
institution had been directly affected by
check fraud over the prior 18 months
end of the day, it may be a matter of managing losses. Though
checks make up an ever-smaller percentage of payments, eliminating checks altogether is a tough sell and one that could
alienate older customers and business clients in particular.
Community banks “try to be friendly, customer centric,
customer focused, but that opens them up to abuses by
Source: Bank Director’s 2025 Risk Survey
bad actors who are shopping around checks, trying to send
some couriers in to try to cash a check, deposit a check
quickly and turn it around, or do a check kiting scheme,”
the check. Is the logo exactly where it’s supposed to be, or
Baranowski says.
is it just off a little bit? It’s a lot more than just signature
He adds that while most boards generally understand
comparison these days,” he says. “A lot of these things can
that some losses are the price of doing business, “whether it
be detected digitally that can’t be detected just with eyesight
be debit card scams or check scams, many of them take it
anymore.”
personally.”
Before investing in a new technology, however, the board
needs to get a handle on exactly what the check fraud problem looks like at their own organization. Dig into details
6 | BANK DIRECTOR INTELLIGENCE REPORT
Laura Alix is director of research at Bank Director.
