Information about Check Fraud
Basic Check Fraud Statistics
Here are some facts and statistics about check fraud compiled from various sources:
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The 2012 AFP Payments Fraud and Control Survey of over 5000 corporate practicioners received 447 responses:
* Checks remain the payment type most vulnerable to fraud attacks.
* 85% of affected organizations report that checks were targeted.
* 14% of organizations that were victims of at least one attempt of check fraud during 2011 suffered a financial loss.
* Among organizations suffering a financial loss due to payments fraud, the typical loss was $19,200.
* More than 80 percent of companies surveyed employ best practices such as positive pay and daily reconciliations to mitigate fraud. Loss situations are primarily due to a failure to follow their own fraud policies.
2012 AFP Payments Fraud and Control Survey (Released 3/12)
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According to BankInfoSecurity's 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.
BankInfoSecurity, Faces of Fraud Survey, 2012
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According to a December 2011 survey published by the American Bankers Association (ABA),
73 percent of banks reported check fraud losses in 2010, totaling approximately $893 million in losses.American Banker's Association, 2011
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The 2009 ABA study estimates there were 760,955 cases of check fraud in 2008 with actual losses estimated at $1.024 billion, compared to 561,306 cases and $969 million in 2005 (2006 ABA Study) and 616,469 cases and $677 million in 2002 (2003 ABA).
Counterfeit checks resulted in loss of $271 million for banks in 2006 a 160% increase from 3 years prior.One in four money center size banks spent more than $20 million each in check fraud-related operating expense (not including actual losses). The median expense was about $10 million for money center banks, between $500,000 and $1 million for regional banks, $50,000 $250,000 for mid-size banks and about $5,000 for community banks.
American Banker’s Association, 2009 & 2006
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
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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
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80% of business-to-business transactions are made by check; that number is expected to decrease only minimally in the coming years.
Nancy Atkinson, Senior Analyst at Aite Group, LLC, Transaction Trends Magazine, 08/07
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The US Secret Service estimates $5 billion a year in the United States alone is the toll of check fraud. In fact, the chief of the agency’s financial crimes division calls check fraud "the number one way criminals today are attacking our financial systems."
U.S. Secret Service, 2007
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Does Crime Pay? The imprisonment rate for check fraud in only 2%.
Department of Justice 2004