Combating Check Fraud with Effective Prevention and Detection Strategies
Preventing and detecting check fraud plays an important role in ensuring the continued trust, safety and security in the payment system. Check fraud creates financial and operational risks for financial institutions, businesses and individuals across the United States. It has led to billions of dollars lost to criminals and countless hours spent resolving check fraud claims.
Explore this module to:
- Learn about how people, processes and technology can work together to mitigate check fraud
- Become familiar with common practices for preventing and detecting fraudulent checks
Deposit fraud is a significant threat for financial institutions, often fueled by new account fraud, scams and technological advances. Deposit fraud occurs at the point where customers — either unwittingly or complicitly — initiate fraudulent check deposits. Financial institutions can effectively detect and prevent deposit fraud by understanding criminal methods, identifying vulnerabilities and continuously evolving fraud strategies.
Learn more about mitigating deposit fraud in the video below.
Similar to deposit fraud, countering in-clearing check fraud – where counterfeit, altered or forged checks are presented for payment through the interbank clearing system — requires a strong fraud prevention framework built on a layered approach to identify and prevent fraud before losses occur.
Learn more about mitigating in-clearing fraud in the video below.
Downloadable Resources
Explore these resources for additional information on preventing and detecting check fraud.
| Document Title | Format | Reading Time |
|---|---|---|
| Preventing Check Fraud: A Resource for Businesses (PDF) | Document | 5 minutes |
| Helping Your Business Customers Prevent Check Fraud (PDF) | Document | 4 minutes |
| Combating Deposit Fraud: Considerations for a Financial Institution (PDF) | Document | 6 minutes |
| In-Clearing Check Fraud Prevention: Stopping Fraud at the Paying Bank (PDF) | Document | 5 minutes |
| Revisiting the Unauthorized Check Fraud Scenario from Toolkit Module 2 (PDF) | Document | 2 minutes |
| Revisiting the Authorized Check Fraud Scenario from Toolkit Module 2 (PDF) | Document | 2 minutes |
| Mitigate Fraud with People, Processes and Technology (PDF) | Document | 5 minutes |
| Infographic: Mitigate Fraud with People, Processes and Technology (PDF) | Document | 2 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.