Alert raised over growing use of check fraud via stolen tax refund, personal, Social Security checks

Calling attention to the growing use of check fraud schemes across the country, the Treasury’s top financial crimes unit Saturday issued an alert to all financial institutions warning them to be on the lookout for the scams.

The Treasury’s Financial Crimes Enforcement Network (FinCEN), in its alert, said targeting of U.S. mail and United States Postal Service (USPS) mail carriers by lawbreakers seeking to commit check fraud has been on the upsurge since the COVID-19 pandemic.

“Criminals typically steal personal checks, business checks, tax refund checks, and checks related to government assistance programs, such as Social Security payments and unemployment benefits,” the agency said in its alert. “Following the initial theft and fraudulent negotiation of the stolen checks, criminals may continue to exploit their victims by using the personal identifiable information found in the stolen mail for future fraud schemes, such as credit card fraud or credit account fraud.”

FinCEN said Bank Secrecy Act (BSA) reporting for check fraud has increased significantly in the last three years, noting more than 350,000 Suspicious Activity Reports (SARs) filed by financial institutions reporting potential check fraud in 2021. That’s a 23% increase over the number of check fraud-related SARs filed in 2020, the agency said.

FinCEN said the trend continued in 2022, with check fraud SARs reaching more than 680,000, nearly doubled from the previous year’s amount of filings.

FinCEN Issues Alert on Nationwide Surge in Mail Theft-Related Check Fraud Schemes Targeting the U.S. Mail