ABA, U.S. Postal Services jointly combat check fraud

Dive Brief:

The American Bankers Association and the US Postal Inspection Service are collaborating to fight check fraud, according to a Tuesday press release.
As part of the initiative, the two entities will focus on informing bank and postal service customers about check fraud, locating money mules and collusive account holders, collaborating with law enforcement agencies and training bank and postal employees to spot suspicious activity, the release said.
Check fraud typically involves stealing checks from the mail, and then modifying the payment recipient and dollar amount to take funds from a victim’s accounts, according to the press release. Citing figures from the U.S. Treasury Department, the release said this fraud category has spiked since the beginning of the COVID-19 pandemic.

Dive Insight:

The ABA and the U.S. Postal Service suggested consumers use electronic checks, ACH payments or other electronic and mobile payment services. For customers who use mobile or online banking apps, the two organizations recommended that consumers check their accounts to look for statement errors, odd financial activity and copies of their checks.

“Postal customers are also the customers of the American Bankers Association’s member financial institutions, and so we share a common sense of responsibility to protect those customers from check fraud and financial harm,” Chief Postal Inspector Gary Barksdale said in the release. “Awareness of check fraud and check fraud prevention strategies will empower the public to protect themselves from financial harm while making it more difficult for criminals to perpetrate this crime.”

Though the two entities recommended using digital payment services, checks remain a staple for U.S. businesses and consumers. More than a third of accounts payable departments surveyed in a MineralTree survey said they pay vendors via check more than half of the time.

Plus, a report from the Federal Reserve Bank of Atlanta released in August found that U.S. consumers outranked other countries in check usage for cashless payments.