Check Cashing Fraud up 84% in 2022

Check cashing fraud has become a major problem for the financial industry, with paper checks being one of the weakest links in the system. From 2021 to 2022 the financial industry has seen an estimated 84% increase from walk-in check cashing fraud. The cause of this is largely driven by organized criminal gangs who are using new technologies to facilitate their fraud activities.?It is estimated that check cashing fraud makes up around 60% of all attempted fraud against financial institutions today.?The FBI estimates that check fraud accounts for over $18.7 Billion in losses annually throughout the U.S.

Criminals are using techniques such as Synthetic document manipulation & forgery to alter the recipient's name and the dollar value on stolen checks. They then open a bank account under a false name and hire someone, known as a "walker," to deposit the check. These criminal gangs are also using the messaging app Telegram to coordinate their activities and connect people who have stolen checks with walkers. Telegram is popular among these groups as it allows users to message in private or public groups and offers the ability to use anonymous names and encrypt messages, making it difficult for the police to trace their activities.?Walkers are creating Synthetic Drivers Licenses to help facilitate a seamless ID-Verification when they walk into your branch to open an account or just cash a check.?The average fraud scheme last 18 months before the consumer or financial institution detects the issue.?

To combat check cashing fraud, it is important to implement robust solutions that can effectively detect and prevent such fraudulent activities. Thomson Reuters Risk & Fraud solutions can help reduce check cashing fraud by providing advanced analytics and machine learning techniques to identify and prevent Synthetic ID.?

Thomson Reuters, Synthetic ID detection offers a multi layered approach to help fight Fraud including, Driver License & Passport Scanning, Document Liveliness, Biometric Authentication, Document Manipulation warnings, Electronic Data Verification, Address Verification, GEO Location verification along with our exclusive Instinct capabilities, which help to identify when the face, name or document number are being used with alternative images, names, or numbers throughout the system.

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