Last year alone, 74 percent of organizations experienced check fraud, according to the AFP Payments Fraud and Control Survey. Given the frequency of check fraud scams, what can financial institutions do to protect themselves and their customers from financial losses?
To start, be wary of the common scams and risks associated with checks. Counterfeiting and check alteration are two methods we have seen on a large scale lately. Using state-of-the-art photocopiers, fraudsters can fabricate a check or duplicate a check. Check altering or check washing can also happen when fraudsters use chemicals to remove or alter the ink on a check. This allows them to erase the payee’s name and replace it with their own, or replace the dollar amount with a larger value.