Why Paper Checks Are a Gold Mine for Scammers
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Access to affordable credit helps me pay my employees, but I don't really need it. Inflation is killing me. But who cares? Big retailers are making record profits. That's why we support the Durbin Marshall credit card bill. See? Banks and credit unions help small businesses make payroll. This bill would cut the vital resources they need. While increasing megastore profits. They deserve it, don't they? Tell Congress, stop the Durbin Marshall money grab for corporate megastores. Paid for by the Electronic Payments Coalition.
Here's your Money Briefing for Wednesday, November 20th. I'm J.R. Whelan for The Wall Street Journal. Check fraud went up nearly 400 percent in the U.S. last year. And criminals are upping their game when targeting Americans who still write out paper checks and drop them in the mailbox.
Stealing them has been a challenge that consumers and banks have had. And then what you have had is the emergence of social media and the ability to communicate and compare notes and teach one another different tricks of the trade in order to get this going again.
We'll talk to WSJ's Justin Baer and Oyin Adedoyin about how fraudsters are cashing in after the break.
Access to affordable credit helps me pay my employees, but I don't really need it. Inflation is killing me. But who cares? Big retailers are making record profits. That's why we support the Durbin Marshall credit card bill. See? Banks and credit unions help small businesses make payroll. This bill would cut the vital resources they need. While increasing megastore profits. They deserve it, don't they? Tell Congress, stop the Durbin Marshall money grab for corporate megastores. Paid for by the Electronic Payments Coalition.
Check fraud schemes are on the rise. The Wall Street Journal's Justin Baer and Oyin Adedoyin join me. Banking has become such a digital world. Oyin, how many people are still using paper checks?
Well, the U.S. relies on checks far more than many other countries. It has the highest per capita check usage in the world, with about 30 checks used per person annually, according to the Federal Reserve. The second highest is France, with about 16 checks per person. So you can really see how much checks are still a vital part of the U.S.
How big was the recent surge in U.S. check fraud?
economy. And in the U.S., check fraud went up nearly 400 percent last year.
Justin, why has check fraud accelerated?
The good place to start is what happened right after COVID, where you had what was another kind of strand of fraud going on as people identified opportunities to steal stimulus checks, to exploit the loan programs that were being extended to small businesses in the area. All that was in a hope to stimulate the economy and recover from the virus. Eventually, those tricks and those processes kind of ran dry. And so you had a group of people in search of a new thing and a new opportunity. And they ended up going back to the basics, so to speak. Checks have been around for a long time. Stealing them has been a challenge that consumers and banks have had for as long a time as that. And then what you have had is the emergence of social media and the ability to communicate and compare notes and teach one another different tricks of the trade in order to get this going again.
Which groups are reporting and investigating the rise in paper-check scams?
Yeah, this really stunned me in your story that when the fraudsters commit these crimes, they publicize their actions.
Yeah, that's actually part of how they get away with this. So the issue is that there are mass volumes of fraudsters that are hitting multiple banks at a time. So they're in these channels on Telegram and basically sending photos of checks to each other, asking for access to Fidelity accounts or emails. JPMorgan Chase accounts. And they're having these rapid amounts of communication with each other in real time, getting access to bank account information, and then depositing altered or fake checks into these accounts and moving that money as fast as possible.
Take us through the footsteps of the fraudsters. How are they gaining access to people's bank accounts and their checks?
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