Check fraud is surging, leaving banks grappling with an unexpected resurgence of this age-old crime, according to a survey.
Although there is an overall decrease in check volume, 90% of banks are saying that check fraud is rising, a new survey revealed by fintech company Intrafi finds.
The survey included data from 471 banks. It discovered that over 25% of the institutions reported a check fraud increase of 50% or more in the past three years.
Additionally, 19% noted a rise in fraud of 30-49%, and 28% observed an increase of 10-29%.
"Those are staggering numbers that show check fraud is rampant and surging," said Mark Jacobsen, IntraFi's CEO and cofounder. "Community banks are being hit particularly hard, and they are looking to policymakers to step in."
Bad checks continue to plague community banks as well as delays in repayment on those checks from institutions that cashed them.
These banks, when asked about what they needed from regulators, 62% said they support shifting liability for check fraud to the "bank of first deposit," the institution that first cashes the bad check.
Of those asked, almost 50% of bankers want law enforcement to better target check fraud, with 14% supporting more funding that would work to expand the U.S. Postal Service police force.
Some analysts agree.
"In the last couple years, you cannot believe all the emails and calls I get concerning check forgery," Frank Abagnale Jr., founder of Abagnale and Associates, and the inspiration for the book and film "Catch Me If You Can," stated during a recent episode of IntraFi's Banking with Interest podcast. "It's a huge problem."
The same survey also found that bankers share a pessimistic attitude, overall, about the economy.
In all, 34% cited worsening economic conditions at their institution over the past year, while 38% said they expect conditions to worsen over the next 12 months, the release also revealed.
