Why your team still needs to safeguard against check theft – even in the age of cybercrime

If you’re still using paper checks for making vendor payments, be aware: Check theft crime is making a comeback.

According to a cybersecurity research group at Georgia State University that monitors dark web activity, crooks can easily steal a business’s bank checks by:

• targeting unattended bills left outside the building for USPS carriers to pick up, or
• swiping the keys – perhaps from an unwitting postal carrier – that open the blue postal service collection boxes.

Once the check is removed from the mailing envelope, the criminal takes a picture of the check for a backup, then uses nail polish remover to remove the date, payee’s name and the amount written on the check.

Taking the fraud to the next level, they then take a picture of the “blank” check and upload it to the dark web and/or encrypted communication platforms that facilitate fraud, selling the paper original to the highest bidder to make counterfeit checks.

Considering that 81% of firms still use paper checks for B2B payments at least on occasion, this could be a big concern for your A/P and A/R departments.

Georgia State associate professor of criminal justice and criminology David Maimon gave his take on why there’s a surge in old-fashioned mail-related check theft fraud on National Public Radio’s “All Things Considered” here.

Ways to prevent check theft

If you think your business could be at risk for fraud related to check theft, one simple solution is to mail your organization’s checks by dropping them off directly inside the post office.

For high-dollar checks that would be particularly attractive to thieves, you may want to consider using a courier or other guaranteed delivery service, then proactively confirming with the payee that the check was received.

Daily transaction reconciliation by your Finance team, with them flagging anything that looks irregular for review, can also help.

Does your bank offer any enhanced fraud protection services that would be valuable to have? Now would be a good time to ask.

You could also start using more electronic payment methods like ACH, real-time payments, virtual cards, vendor portals or online bill pay services like Venmo or PayPal. Consider dollar thresholds for which electronic payment methods would be required.