Check Fraud Declining, But Debit Card Crimes on the Rise


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Hemera/Thinkstock(NEW YORK) — During a year that saw a record rise in financial crime reports, one scam that has plagued banks and consumers for decades is fading away: check fraud.

Reports of suspected counterfeiting, check fraud and check kiting were among the financial crimes that saw declines during 2011, dropping 7.5 percent from 2010.  The drop in check fraud came as the Financial Crime Enforcement Network (FinCEN) had a record number of suspicious activity reports (SARs) in 2011 throughout the financial industry.

The number of check-related suspected crimes peaked in 2008, with banks sending 152,874 suspicious activity reports to FinCEN.  From there, the cases are investigated by federal, state or local authorities, depending on the amount of money involved in the crime.

Since 2008, the number of check-related crimes has dropped to 107,041.  The drop in check fraud numbers points to a trend many Americans are familiar with — the slow disappearance of checks.

The use of checks as a form of payment has been declining in recent years.  Personal check use has dropped by 12 percent among consumers between 2008 and 2010, according to the American Bankers Association (ABA).

In dollar amounts, check fraud losses have declined from $1.02 billion in 2008 to $893 million in 2010, according to data from the ABA’s 2011 Deposit Account Fraud Survey Report.

Meanwhile, the use of debit cards has increased, and with it, debit card-related crime.

From 2006 to 2009, the use of debit cards as a form of payment rose 14 percent among Americans, while debit card crimes rose 41 percent, according to data from the Federal Reserve and FinCEN.

The number of suspected debit card frauds each year is still significantly lower than suspected check crimes, with total debit card fraud accounting for just 6,258 suspicious activity reports from banks in 2011 — the highest number of debit crimes ever reported. 

Copyright 2012 ABC News Radio

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