Rising Threat of Mail Theft and Check Fraud: How Businesses Can Safeguard Their Payments

The latest Financial Trend Analysis (FTA) from FinCEN sheds light on a growing issue that has caused significant financial losses across the United States: check fraud linked to mail theft. Financial institutions reported more than $688 million in suspicious activity, primarily stemming from stolen checks, between February and August 2023. This staggering figure highlights a critical vulnerability in the payment ecosystem—one that affects businesses, individuals, and financial institutions alike.

The Problem: Mail Theft and Check Fraud

According to FinCEN, mail theft has emerged as a key entry point for check fraudsters. Once stolen, checks are often altered, counterfeited, or fraudulently signed and deposited, leading to devastating financial consequences for both businesses and consumers. The FTA identified three main outcomes:

• 44% of stolen checks were altered and deposited
• 26% were used as templates to create counterfeit checks
• 20% were fraudulently signed and deposited

As criminals become more sophisticated, the risks for businesses relying on traditional check payments have escalated.

Financial and Operational Consequences

For businesses, check fraud is not just a minor inconvenience—it can cause significant disruptions. Beyond the immediate financial loss, companies often face operational hurdles in recovering funds, addressing fraudulent transactions, and managing customer relationships. Financial institutions that cover check fraud losses also feel the strain.

Preventing Fraud Before It Happens

While FinCEN and the U.S. Postal Inspection Service are collaborating to combat mail theft and check fraud, businesses can take proactive steps to safeguard their payment processes. One of the most effective strategies is to reduce reliance on paper checks altogether.

One of the most effective strategies to combat check fraud is to reduce reliance on paper checks altogether.

Shifting to digital payments can help mitigate the risks posed by mail theft and fraud. Online payment platforms offer greater security, as transactions are encrypted and processed through secure channels, leaving less room for interference or manipulation. By digitizing payments, businesses can not only streamline their operations but also protect themselves from the growing threat of check fraud.

A Digital Solution for the Modern Business

For businesses looking to fortify their payment systems, solutions like our Catch! electronic lockbox offer a reliable way to ensure payments remain digital and secure. As part of a comprehensive payment strategy, Catch! helps businesses avoid the pitfalls of paper checks by keeping online banking bill pay payments flowing online, eliminating the risk of physical theft or fraud. By preventing these payments from converting to checks, businesses can protect their transactions, reduce delays, and improve cash flow—all while mitigating fraud risks.

As check fraud continues to rise, businesses must prioritize payment security. The combination of industry vigilance, like that from FinCEN and the Postal Inspection Service, along with a shift to more secure digital payment solutions, offers a strong defense against fraud. By embracing digital payments, businesses can safeguard their money—and their customers' trust.

Take a Stand Against Check Fraud

If you’re ready to join the fight against check fraud, contact us today or explore the resources below:

• Catch!, our electronic lockbox solution, ensures online banking bill payments stay online—as intended.   
• Online Payments offer an alternative to check payments, letting you accept ACH, debit, and credit card payments online, any time
• For more on check fraud trends and financial safety measures, check out our “Check Fraud Exposed” white paper.

It’s time to take a stand against check fraud. The first step? Reducing the number of checks sent through the mail altogether. Get started today!