Common Schemes Used for Check Fraud
Criminals continuously evolve their tactics to perpetrate check fraud. While the level of sophistication often varies, certain schemes follow similar patterns. Check fraud could be the result of authorized party fraud, where the account holder willingly sends or writes a check for the purpose of committing fraud — or unauthorized party fraud, where criminals use stolen checks or account information for their own financial gain. Maintaining awareness of the schemes being used to perpetrate check fraud can help fine-tune prevention strategies, educate employees, and design and deliver customer education.
For an overview of the different types of check fraud schemes, watch this video.
One way check fraud continues to thrive is through the use of new accounts. Criminals open new accounts, or recruit someone else to open a new account, with the sole intention of depositing or cashing fraudulent checks.
For an overview of how new accounts are used to commit fraud, watch this video below.
Downloadable Resources
Explore these resources for additional information on check fraud schemes.
| Document Title | Format | Reading Time |
|---|---|---|
| Overview of Different Types of Schemes (PDF) | Document | 4 minutes |
| How Criminals Commit Check Fraud Using Stolen Business Identities (PDF) | Document | 6 minutes |
| Criminals Target Attorneys with Scams Involving Fake Checks (PDF) | Document | 3 minutes |
| Check Fraud Connections to New Account Fraud (PDF) | Document | 3 minutes |
| The Anatomy of Check Kiting (PDF) | Document | 4 minutes |
| Leveraging the ScamClassifierSM Model for Check Scams (PDF) | Document | 4 minutes |
| Romance Scams, Check Fraud and the ScamClassifierSM Model (PDF) | Document | 4 minutes |
| Addressing Deposit Fraud Using Both the ScamClassifierSM and FraudClassifierSM Models (PDF) | Document | 4 minutes |
| Use Case: The $50 Million Check Fraud Scheme (PDF) | Document | 3 minutes |
Explore the toolkit modules below for resources to help prevent and detect check fraud.
The check fraud mitigation toolkit was developed by the Federal Reserve to help educate the industry about check fraud and outline potential ways to help detect and mitigate this fraud type. Insights for this toolkit were provided through interviews with industry experts, publicly available research, and team member expertise. This toolkit is not intended to result in any regulatory or reporting requirements, imply any liabilities for fraud loss, or confer any legal status, legal definitions, or legal rights or responsibilities. While use of this toolkit throughout the industry is encouraged, utilization of the toolkit is voluntary at the discretion of each individual entity. Absent written consent, this toolkit may not be used in a manner that suggests the Federal Reserve endorses a third-party product or service.