Information about Check Fraud
Basic Check Fraud Statistics
Here are some facts and statistics about check fraud compiled from various sources:
The 2013 AFP Payments Fraud and Control Survey Key Findings:
* 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 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.
* 76% of banks ranked check fraud second among the top fraud threats they faced in 2011.
BankInfoSecurity, Faces of Fraud Survey, 2012
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.
2011 ABA Deposit Account Fraud Survey
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”,
“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
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 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
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
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
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
Does Crime Pay? The imprisonment rate for check fraud in only 2%.
Department of Justice 2004