Information about Check Fraud
Basic Check Fraud Statistics
Here are some facts and statistics about check fraud compiled from various sources:
According to the 2013 Federal Reserve Payments Study:
* Checks (consumer and business) were the payment instrument with the highest average value of unauthorized transactions in 2012. The average unauthorized check transaction was valued at $1221, as compared to ACH at $730, ATM withdrawals at $217, general purpose credit cards at $138, and general purpose debit cards at $105.
Federal Reserve Payments Survey (Released 12/13)
2013 AFP Electronic Payments Survey findings show:
* 92% of organizations use checks when paying at least some of their major vendor/suppliers.
* The average company makes 43% of its payments to major suppliers by check.
2013 AFP Electronic Payments Survey (Released 11/13)
According to the iSMG 2013 Faces or Fraud Survey:
* 52% of organizations have experienced check fraud in the past year. This was the payment method experiencing the second highest level of fraud, behind credit/cards (66%).
* 51% of organizations report using "positive pay", debit blocks, and other limits on transactional use as a precaution to prevent payments fraud.
* Respondents included 200 Chief Information Security Officers, Chief Information Officers, Directors of IT and other senior leaders of financial services organizations.
iSMG, 2013 Faces of Fraud: The Threat of Evolution (Released 9/13)
2013 AFP Payments Fraud and Control Survey findings show:
* Checks remain the payment type most vulnerable to fraud attacks.
* 87% of organizations affected by payments fraud report that checks were targeted.
* Among organizations suffering a financial loss due to payments fraud, the typical loss was $20,300.
2013 AFP Payments Fraud and Control Survey (Released 3/13)
According to the iSMG 2012 Faces of Fraud Survey:
* Check fraud is the second most common scheme institutions face, placing just behind payment card fraud and ahead of phishing.
* 76% of banks ranked check fraud second among the top fraud threats they faced in 2011.
iSMG, Faces of Fraud Survey, 2012
Survey results showed that 70% of B2B payments are still made via check.
Aite Group, “Remittance Details: When and How They Arrive for U.S.-Based Companies” (Released 7/12)
The 2011 ABA Deposit Account Fraud Survey reports:
* 73% of banks reported check fraud losses in 2010, totaling approximately $893 million.
* Attempted check fraud against bank deposit accounts amounted to some $11 billion in 2010. That figure takes into account both actual losses and loss avoidance due to banks' prevention strategies, and it was just slightly lower than the $11.4 billion figure in 2008.
* More than 7 in 10 banks (73 percent) reported having check fraud losses in 2010.
2011 ABA Deposit Account Fraud Survey
“While the exciting and glamorous fraud topics today involve wire fraud, account takeovers, ID theft, and skimming, the results of the Association for Financial Professionals’ annual corporate fraud survey remind us that the most fraud vulnerable instrument available today is the paper check.”
Richard Oliver, Atlanta Federal Reserve Bank, May 2011
“Despite law enforcement’s very necessary focus on combating serious and organized financial crime, including terrorist-related activities that remain an ongoing threat – one of the simplest & most prevalent ways to commit financial crime, to steal money, is to commit some form of check fraud.”
James Freis, Jr., Director of FinCEN, U.S. Department of the Treasury,
22nd Annual FiSCA Conference, October 2010
760,955 cases of check fraud were reported in 2008 with actual losses estimated at $1.024 billion (2009 ABA study), 561,306 cases and $969 million in 2005 (2006 ABA study), and 616,469 cases and $677 million in 2002 (2003 ABA study).
2009 / 2006 / 2003 ABA Deposit Account Fraud Survey
Combining the ABA check fraud statistics (shown above) with Federal Reserve Payments Study data on the number of checks written in the United States estimated at 37.6, 33.1, and 27.8 billion in 2004, 2007, and 2010 respectively, reveals that the per-item cost of fraud losses has gone from $.018 to $.029 to $.036 (unadjusted for inflation). Essentially, the unit cost of fraud for every check written has doubled in these six years to 3.6 cents per item, even as aggregate check volume has fallen by 26 percent.
Federal Reserve Payments Study data with paraphrased commentary from Rich Oliver,
executive vice president of the Atlanta Fed and director of the Retail Payments Risk Forum
Organizations in the United States lose about 7% of their revenue to fraud.
60% of all fraud incidents within a business involve employees.
The average fraud scheme goes undetected for 18 months.
Association of Certified Fraud Examiners
Does Crime Pay? The imprisonment rate for check fraud in only 2%.
Department of Justice 2004