5 Ways to Safeguard Against Check Fraud

5 Ways to Safeguard Against Check Fraud

Today, the use of paper checks has steadily declined, with projections indicating their eventual obsolescence. Despite this, criminals continue to exploit vulnerabilities in the check system, resulting in a significant rise in check fraud incidents. According to the Associated Press, banks reported 680,000 cases of check fraud to the Financial Crimes Enforcement Network in 2023, marking a substantial increase from the previous year. Here are a few precautions you can take to prevent check fraud and protect your financial assets:

1. Use Security Features

Opt for checks that include features such as watermarks, microprinting, and security threads. Watermarks are visible under certain lighting conditions and are difficult to replicate, while microprinting involves printing tiny text that becomes illegible when photocopied. Moreover, security threads are embedded within the paper and can be detected with ultraviolet light. These features make it harder for counterfeiters to produce convincing forgeries, reducing the risk of check fraud.

2. Monitor Account Activity

Set up alerts with your bank to receive notifications for large withdrawals, unusual activity, or checks cashed above a certain threshold. It is important to review your bank statements promptly upon receipt and reconcile your accounts regularly. Make sure to look for any discrepancies or unfamiliar transactions and report them to your bank immediately. By staying vigilant and proactive, you can identify and address suspicious activity before it escalates into a more significant issue.

3. Avoid Mailing Bills from Your Mailbox

When bills containing checks or sensitive financial information are placed in your mailbox for pickup by postal carriers, they become vulnerable to interception by potential fraudsters. These individuals may tamper with or steal the mail, exploiting the contained checks and personal details for fraudulent purposes. To mitigate this risk, opt for alternative methods of sending outgoing mail, particularly those containing checks or sensitive financial information.

4. Secure Blank Spaces

Preventing unauthorized access to blank checks is essential for minimizing the risk of check fraud. Store your checkbook in a secure location, such as a locked drawer or safe, and limit access to authorized individuals only. Avoid leaving blank checks lying around or easily accessible to visitors or household members. When mailing checks, use secure envelopes and consider using a gel pen with acid-free ink, as it is more resistant to alteration attempts. 

5. Dispose of Canceled Checks Securely

Dispose of canceled checks securely by shredding them with a cross-cut or micro-cut shredder. Alternatively, use a professional shredding service for large volumes. Moreover, destroy the MICR line when shredding to prevent access to sensitive banking information. These practices help safeguard against fraud and identity theft, ensuring the protection of personal financial information.