What it looks like today, and what to do about it
Check fraud on the rise
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By Sydni Silverstone on August 7, 2026
Check fraud:
It was a normal Monday morning when a representative from Company One walked into a local JP Morgan Chase branch and deposited a check into their account. What made this particular transaction noteworthy was the amount — a staggering $2,168,716.44 — and the fact that the payer — ABC Company LLC, a Frost Bank commercial customer — never issued it.
The next day, when the check posted to ABC’s account, the amount automatically triggered a fraud alert that the Frost Bank Check Fraud team had in place for large dollar checks. The account was restricted for further verification. All it took was one phone call from a Frost Bank Account Officer to an ABC representative to confirm the check was not valid. As a result, the check was returned.
Checks are the payment method most vulnerable to fraud and can occur whether you are issuing checks or receiving them. In the case of ABC Company, a $2 million check came within one fraud alert of clearing.
The irony is, checks feel safe. They're familiar, they’re physical — but that familiarity is exactly what fraudsters look to exploit. Roughly nine in ten organizations still write checks, and more than three-quarters say they have no immediate plans to stop using them. Yet checks are the payment method most targeted by fraud: in 2025, 58% of organizations reported check fraud, outpacing both ACH and wire fraud.
What concerns most fraud experts is that, in the last few years, check fraud has skyrocketed. Even as two-thirds of adults say they rarely or never use paper checks, more than a fifth either have experienced check fraud or know someone who has, according to a poll in 2025 by the Independent Community Bankers of America, a trade group. With a rise in mail theft fueling the fire, check fraud now accounts for roughly half of all fraud-related reports from depository institutions.
1. Counterfeit checks
What it is: A check manufactured to imitate a legitimate one. The account and routing numbers are often real — the document is not.
How it works: A fraudster obtains your account and routing information (frequently lifted from a single stolen check) and prints checks on stock that never came from you. Because the underlying account data is genuine, a counterfeit can look convincing at a glance.
The fraudulent ABC check from the intro is a textbook example. The account data was plausible enough to deposit, but the document betrayed itself under inspection. Even if inspection doesn’t initially detect the fraud, keeping a close look at your account statements should reveal any suspicious activity.
Red flags: Balance your accounts regularly to verify that all issued payments have made it to their correct location and that no transactions look fraudulent. Review your bank statements and check images to ensure everything is accurate.
What to do about it: Notify your bank immediately if you see unauthorized activity.
For proactive protection, order checks directly from your bank. Checks with better security features, such as watermarks, are harder to duplicate.
3. Mail theft–related fraud
What it is: The supply line for check fraud. Stolen mail is where most washed and counterfeited checks begin.
How it works: Checks are pulled from residential mailboxes, collection boxes, or outgoing mail, then either altered or mined for the account data needed to manufacture counterfeits.
Red flags: Checks that never arrive, payees reporting non-receipt, or payments posting to unexpected parties.
What to do about it: Keep checks out of the mail wherever possible, never leave outgoing payments in an unsecured box, and confirm receipt of anything you do send.
2. Altered checks/check washing
What it is: A genuine check that's been changed after it was written — the method commonly called "check washing."
How it works: A stolen check is treated with chemicals that lift the original ink, leaving the signature intact while the payee name and amount are rewritten. Because the check itself is authentic, alterations are often harder to catch than outright counterfeits.
Red flags: Smudging or faint "ghost" text, mismatched ink or handwriting, erasure marks, or a payee and amount that don't match your records.
What to do about it: Pay from accounts protected by Positive Pay with Payee Review (a service that matches details of deposited checks with checks actually issued), write checks in permanent gel ink, and reconcile against your issued-check list promptly.
The safest check is the one you never send. Since mail theft is the primary fuel source for check fraud, the most effective prevention is removing the paper entirely. ACH and wire transfers eliminate the document fraudsters depend on.
When electronic payment isn't an option, protect the check in transit. Track it through your chosen mail service. (Keep one thing in mind: unlike cash, a check generally can't be insured through the mail. That means a lost or stolen one has no recovery from the carrier.)
The best thing you can do is always monitor your statements closely. Spot any red flags? Then act fast — the sooner a fraudulent item is flagged, the better your bank's odds of recovering the funds.
Finally, put a system between your account and the fraud. Frost Bank offers Positive Pay with Payee Review, which matches the checks presented for payment against the checks you actually issued — number, amount, and payee — so mismatches are caught before they clear.
Checks may be the oldest form of payment you make, but they remain one of fraud's favorite targets. Treat each incoming or outgoing check as worthy of a second look.
1. https://www.frbservices.org/news/fed360/issues/060325/check-fraud-remains-top-threat
2. https://www.financialprofessionals.org/training-resources/resources/survey-research-economic-data/details/payments-fraud
3. https://www.icba.org/w/new-icba-polling-shows-public-support-for-policy-efforts-targeting-check-fraud
4. https://www.niceactimize.com/blog/fraud-prevention-insights-from-unpacking-the-2024-fincen-sar-stats
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The risk runs both directions — when you issue checks that can be intercepted and tampered with, and when you receive checks that aren't what they appear to be. Even as scams are ever evolving, check fraud takes a few recognizable forms. Learn to tell them apart and you'll know what you're looking at when something feels off.
Furthermore, staying vigilant by always monitoring your account for anomalous checks is often your first line of defense. And if you do suspect a fraudulent check, here’s what to do about it.
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The overarching fix: paperless