Reported by Jory Heckman

Despite a declining use of checks in the U.S., criminals are increasingly targeting the mail to commit check fraud.

The Postal Service’s surge in mail theft cases contributed to hundreds of millions of dollars in suspected check fraud cases last year, according to a recent Treasury Department analysis.

Treasury’s Financial Crimes Enforcement Network (FinCEN) received more than 15,400 reports of suspected mail theft-related check fraud under the Bank Secrecy Act (BSA) from more than 840 financial institutions between February and August 2023.

FinCEN, in a financial trend analysis of this data, said those mail theft-related check fraud cases amounted to more than $688 million in “suspicious activity.”

The report states that those reports include both completed and attempted transactions.

“Generally, mail theft-related check fraud is the combination of two crimes: mail theft and check fraud,” the report states.

FinCEN found the average amount of check fraud reported in a single case was nearly $45,000, and that the median amount of reported check fraud exceeded $14,000.

FinCEN’s latest report underscores many of the same concerns it raised in an alert on a “nationwide surge in mail theft-related check fraud” it posted in February 2023.

FinCEN’s analysis found financial institutions reported mail theft-related check fraud in all 50 states, Washington, D.C. and Puerto Rico.

New York, California and Florida saw the most reports of mail theft-related check fraud.

In 44% of cases, fraudsters altered and deposited stolen checks. In another 26% of cases, criminals used the stolen checks as templates to create counterfeit checks.

In 20% of cases, they fraudulently signed and deposited a stolen but unaltered check.

Small-to-medium size banks filed a majority of mail theft-related check fraud reports.

Many fraudsters avoided cashing the checks in person by using mobile deposit apps and ATMs, and opening bank accounts online.

In many cases, fraudsters used a host of “check washing” techniques to remove the original payee’s name and the original check amount.

These techniques range from using chemicals to remove the original ink, to using white-out to cover up those fields.

Read full report: https://federalnewsnetwork.com/agency-oversight/2024/09/usps-mail-theft-led-to-688m-in-suspicious-activity-tied-to-check-fraud/?readmore=1