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Protecting Yourself from Check Fraud
Tom Sattler:
Welcome back to the Smart Start Podcast. Today I'm joined by Scott Birrenkott, Director of Legal Affairs for the Wisconsin Bankers Association. We're discussing the growing problem of check fraud, why it's increasing, and the practical steps consumers and businesses can take to protect themselves.
Why Is Check Fraud Increasing?
Tom Sattler:
In today's digital world, many people assume paper checks are becoming less common. Why are we seeing such a significant increase in check fraud?
Scott Birrenkott:
While digital payments continue to grow, paper checks remain an attractive target for criminals.
Fraudsters have found that stealing checks from mailboxes, altering them, or creating counterfeit checks can often be easier than bypassing sophisticated electronic security systems.
Recent federal data highlights just how significant the problem has become, with hundreds of millions of dollars in suspected check fraud reported over a six-month period.
How Criminals Target Checks
Scott explained that fraud often begins long before a check reaches the bank.
Mail theft, stolen mail keys, check washing, counterfeit checks, and identity theft all contribute to today's fraud environment.
Once criminals obtain personal or banking information, they can use it to create fraudulent accounts, alter checks, or impersonate legitimate businesses and individuals.
Simple Ways to Reduce Your Risk
One of the easiest ways to protect yourself is to reduce the number of paper checks you use whenever possible.
When checks are necessary, Scott recommends avoiding leaving outgoing mail in residential mailboxes with the flag raised for extended periods and being mindful of where checks are mailed.
He also encourages consumers to keep checkbooks secure and avoid leaving them unattended at home, in vehicles, or at the workplace.
Monitor Your Accounts Regularly
Tom Sattler:
What's the single most important thing consumers can do?
Scott Birrenkott:
Review your accounts frequently.
Whether through online banking, mobile banking, or monthly statements, regularly monitoring account activity allows customers to identify suspicious transactions quickly and notify their financial institution before additional fraud occurs.
The sooner unauthorized activity is reported, the greater the opportunity for the bank to respond.
Fraud Prevention for Businesses
Businesses face many of the same risks as consumers, but often on a larger scale.
Scott discussed how business email compromise, payroll fraud, counterfeit vendors, and unauthorized account changes can create significant financial losses.
He encouraged businesses to maintain strong internal controls, keep account authorizations current, and communicate regularly with their financial institution whenever something appears unusual.
Using Fraud Protection Tools
Many financial institutions offer additional services designed to help detect fraud before money leaves an account.
For businesses that issue checks regularly, services such as Positive Pay can provide another layer of protection by verifying issued checks before they're processed.
Scott recommends asking your bank what fraud prevention tools are available based on your banking relationship.
Communication Is One of the Best Defenses
Throughout the conversation, Scott emphasized that fraud prevention is a partnership between customers and their financial institution.
If something doesn't seem right—whether it's an unexpected phone call, suspicious email, unfamiliar transaction, or unusual account activity—it's always better to ask questions.
Likewise, banks regularly contact customers when they notice unusual account behavior, helping prevent fraudulent transactions before they're completed.
Practical Tips to Help Protect Yourself
Scott shared several simple habits that can reduce fraud risk:
- Limit the use of paper checks whenever possible.
- Mail checks securely and avoid leaving outgoing mail unattended.
- Store checkbooks in a safe location.
- Review your bank accounts regularly.
- Report suspicious activity immediately.
- Ask your bank about fraud monitoring tools and account alerts.
- Be cautious of unexpected emails, phone calls, or text messages requesting financial information.
Final Takeaway
Financial fraud continues to evolve, but awareness remains one of the strongest defenses.
By monitoring your accounts, protecting your personal information, and maintaining open communication with your financial institution, you can significantly reduce your risk while responding quickly if suspicious activity occurs.
As Scott explains throughout the conversation, fraud prevention isn't just about technology—it's about staying informed, paying attention, and working together with your bank to protect what matters most.