Fraudsters Love Checks – Here’s Why You Shouldn’t 

Check fraud might seem like a crime of the past—but it never really went away. As businesses strengthen security around electronic payments, criminals are doubling down on a more vulnerable target: the paper check. 

Still widely used by many small and mid-sized B2B businesses, checks remain vulnerable to interception, alteration, and exploitation, putting businesses at serious risk. Beyond the immediate financial loss—averaging nearly $45,000 per incident—check fraud can lead to administrative headaches, damaged vendor relationships, and lasting reputational harm.  

Why Check Fraud Is Surging 

According to recent data from the Association for Financial Professionals, nearly 80% of businesses experienced some form of payment fraud in the past year. Of those, over 60% cited check fraud as their primary concern. Paper checks are easy targets—they’re intercepted in transit, altered, or counterfeited with relatively little effort. 

Unlike digital payments, checks lack real-time tracking and security. If fraud isn’t detected quickly—often within 30 days—businesses may have no recourse for reimbursement. The Financial Crimes Enforcement Network (FinCEN) reports that the average check fraud incident now exceeds $40,000, posing a serious threat to businesses managing tight cash flows or vendor obligations while also causing administrative headaches and potentially lasting reputational harm. 

Common Types of Check Fraud 

Criminals have developed increasingly sophisticated methods to exploit paper-based payments. The most common tactics include: 

• Check Washing – Legitimate checks are stolen and treated with chemicals to “wash away” the original ink, leaving behind a blank check that can be rewritten to a new payee for a larger amount. 

• Mail Theft and Counterfeiting – Stolen checks (from mailboxes or, in some cases, by insiders) are altered or used to create counterfeit versions. Paper checks are easy to replicate, and many businesses don’t realize a problem has occurred until significant damage has been done. 

How to Protect Your Business 

Protecting against check fraud requires proactive measures. Here are three essential steps to strengthen your defenses: 

Review Internal Security Practices 

Start with a payment process audit: Are checks stored securely? Is outgoing mail left unattended? Are access controls clearly defined for payment tools? Tightening internal controls—even through small process improvements—can close the gaps that fraudsters often exploit and significantly reduce your risk. 

Establish a Fraud Monitoring & Response Plan 

Monitor bank accounts daily, enable transaction alerts, and train your team to recognize and respond to suspicious activity. A prompt response is crucial in limiting potential losses. 

Invest in a Comprehensive Payment Platform 

To effectively reduce check fraud risk, consider implementing a secure, automated payment platform that streamlines your entire AP/AR process. A solution like BILL offers encrypted ACH and virtual card payments, automated approval workflows, and a complete audit trail—providing real-time visibility into cash flow and transaction activity. By eliminating manual check handling and shifting to electronic payments—protected under the Electronic Funds Transfer Act—you reduce many of the vulnerabilities fraudsters commonly exploit. When paper checks are necessary, BILL issues them from its own bank account, keeping your account details secure and minimizing the risk of internal fraud. 

Cost note: Most platforms charge a monthly subscription plus per-transaction fees, but CRI clients receive discounted pricing below publicly listed rates—delivering security and efficiency without the sticker shock. 

Take Action Before Fraud Happens 

Check fraud is not a problem of yesterday—it’s an active, growing risk that exposes your business to serious financial loss. The good news is that companies can significantly reduce their exposure with the right mix of modern tools and sound financial practices. 

If you’re ready to explore more secure, efficient ways to manage payables, your CRI advisor is here to help. We can assess your current processes, introduce you to BILL, and tailor a fraud prevention strategy that aligns with your business needs. Let’s work together to safeguard your operations and provide greater peace of mind.