Electronic payments continue to grow, but checks remain an important part of doing business for many organizations.
From paying vendors to handling specialized transactions, checks are still a trusted payment method across many industries.
Unfortunately, criminals continue to target businesses that use them.
Today’s check fraud often looks very different than it did years ago. Instead of simply stealing a check, criminals may alter it, create convincing counterfeit copies, or use information from a legitimate check to produce fraudulent payments.
The good news is that businesses can significantly reduce their risk by understanding how modern check fraud works and following a few consistent security practices.
Mail Theft Can Be the Beginning of Check Fraud
Many check fraud schemes begin long before a payment reaches its intended recipient.
Criminals may steal outgoing mail from mailboxes, collection boxes, or unsecured locations.
A single business check can provide valuable information, including:
- Your business name.
- Your bank’s routing number.
- Your account number.
- Authorized signatures.
- Vendor information.
That information can become the starting point for additional fraud attempts.
Whenever possible, deposit outgoing business mail directly inside a post office or use secure mailing methods rather than leaving checks in unattended mailboxes overnight.
Counterfeit Checks Look More Convincing Than Ever
Modern printers and graphic design software allow criminals to produce counterfeit checks that closely resemble legitimate business checks.
Some include:
- Business logos.
- Accurate routing numbers.
- Professional formatting.
- Copied signatures.
At first glance, they may appear authentic.
The difference is that the payment was never authorized by your business.
Regularly reviewing your account activity helps identify unauthorized checks before additional losses occur.
What Is Check Washing?
Check washing occurs when criminals chemically remove the ink from a legitimate check while leaving the paper and security features largely intact.
Once the original information has been removed, they rewrite the check with:
- A different payee.
- A higher dollar amount.
- New payment details.
The check may still contain your original signature.
Because of this, altered checks can be difficult to recognize without careful review.
Using pens with permanent, fraud-resistant ink and avoiding unnecessary blank spaces when writing checks can help reduce this risk.
Positive Pay Adds Another Layer of Protection
One of the most effective tools available to many businesses is Positive Pay.
Positive Pay allows your business to provide your bank with details about the checks you’ve issued, such as:
- Check number.
- Dollar amount.
- Payee (depending on the service).
- Issue date.
When a check is presented for payment, those details are compared against the information your business previously provided.
If something doesn’t match, the item can be flagged for review before payment is completed.
Positive Pay doesn’t replace good internal controls - but it provides an additional safeguard against counterfeit and altered checks.
Build Good Check Security Habits
Strong fraud prevention is built on consistent processes.
Consider these best practices:
- Store blank check stock in a secure location with limited access.
- Reconcile business accounts promptly and review transactions regularly.
- Mail checks securely or use alternative payment methods when appropriate.
- Shred unused or voided checks instead of discarding them.
- Monitor your account for unfamiliar or altered checks.
- Consider treasury management tools such as Positive Pay if they fit your business needs.
Small improvements to everyday processes can significantly reduce fraud risk.
Remember
Checks remain a valuable business payment tool.
Using them doesn’t increase your risk.
Failing to protect them does.
By understanding how modern check fraud works and combining thoughtful internal procedures with available fraud prevention tools, businesses can continue using checks confidently while reducing opportunities for criminals.
Need Help?
First Bank of Berne offers treasury management services and fraud prevention tools designed to help businesses protect their accounts, including solutions such as Positive Pay.
If you’d like to learn more about reducing check fraud risk or strengthening your payment controls, we’re here to help.