Financial Institutions & Wealth Managers

2023 Surge in Check Fraud and Older Customers: What to Know Now

Cameron Huddleston
Cameron Huddleston
July 24, 2023
2023 Surge in Check Fraud and Older Customers: What to Know Now

Financial Institutions and their customers are increasingly being plagued by an old-school form of fraud: check washing. 

The Wall Street Journal reported on May 9 that check fraud—in particular, check washing—is on the rise. Thieves are snatching checks out of residential mailboxes and washing them in chemicals to remove the ink so they can change the recipients or amounts on the checks. The problem is so widespread that the Financial Crimes Enforcement Network issued an alert about the surge in mail theft-related check fraud. And, as The Journal noted, the banking industry is struggling to keep up.

Add in the growing proportion of higher-balance, older adult customers who still prefer checks to digital banking, and there is the makings of a major problem. 

Timing is Everything

According to KPMG’s Global Banking Fraud Survey, customers can play a key role in the prevention and detection of fraudulent activity on their accounts, especially to reduce losses. However, the problem with check fraud and check washing is that victims might not even realize their checks have been stolen until they get notices from the companies, agencies or organizations to whom the checks were made that their bills weren’t paid. 

Said another way: the enemy is time. As The Journal reports, most banks require customers to file check fraud claims within 30 days of the fraud appearing on their statements. When weeks or even months often pass before customers realize checks have been stolen, they become frustrated when their fraud claims are denied because they didn’t file them in a timely manner. It’s a painful process for all parties, and if they’re frustrated enough, they’ll look for another bank that can offer them a better experience of financial safety. 

Detection within days

What customers need in light of this spike in check fraud are better systems to help them detect signs of check fraud sooner—systems that know users’ typical behaviors and payment patterns and can alert them quickly to strange check amounts. Carefull’s monitoring platform includes intelligence specifically designed to spot check fraud. It’s now a critical safeguard for older customers, along with their adult children who monitor their wellness. 

Created to complement banks’ core fraud prevention systems, Carefull partners with banks to provide customers a financial safety experience purpose-built to alert older adults to signs of elder fraud, senior scams and even common money mistakes associated with aging. Delivered in an experience that users love, it’s the difference between catching check fraud when it happens and months later when it hits both banks. 

Financial safety content supports digital detection 

KPMG’s Global Banking Fraud Survey also found that banks can better tackle fraud threats by educating customers proactively. This can work for large FIs with the budget to hire a content team to write articles and launch education campaigns, but community banks and credit unions might not have the resources.

Financial institutions that partner with Carefull not only get Carefull’s smart money-monitoring technology but also its educational content platform designed to get ahead of issues like check washing, giving users the information they need to avoid fraud, scams and exploitation. New articles, including Scam Alerts, are written weekly and posted to co-branded microsites built for each FI partner. Carefull’s email alerts, which are co-branded with bank partners, also include articles specific to each alert to provide customers with guidance. And Carefull provides webinars for bank partners’ customers to educate them on how to keep their money safe and avoid fraud and scams. 

Bottom line

Keeping up with the rise in check fraud and check washing is possible with technology that can support older bank customers with early detection. Combining that technology with educational content that keeps customers informed about the latest scams and best practices to avoid fraud can go even further to limit fraud losses—and provide a better customer experience.

To learn more about how banks can partner with Carefull for early fraud detection, request a demo today.

Cameron Huddleston

Cameron Huddleston

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