Has a Reactive Approach to Check Fraud Backfired?
- Have financial institutions waited too long to address check fraud?
- There has been a sharp increase in check fraud over the past two years
- A majority of bankers want regulators to outline clearer rules
While various publications and other media point out the sharp increase in check fraud over the past few years, many industry experts pinpoint the start of check fraud over a decade ago. OrboGraph's own James Bi, Marketing Manager and Check Fraud Detection, has spoken at dozens of payment and industry events over the past 2-3 years, noting in his presentations that all the data points back to introduction of the EMV chip as "starting line" for fraudsters gravitating towards paper checks.
The reason? The industry largely ignored the vulnerabilities of the check channel and delayed meaningful preventive investments -- equating to "easy pickings."
As noted in the chart below from our Understanding Check Fraud webpage, check fraud attempts in 2025 are projected to surge nearly 600% since 2014 with a CAGR of 19.1%.
And, while the government has taken notice of the check fraud's rise, they've only recently taken actual steps to address the check fraud concerns.
Banks Concerned Being Finally Addressed?
A recent article from American Banker notes that the FED Vice Chair is finally taking action to find a solution for check fraud -- pointing out that "efforts by regulations have been slow to advance and seem to have done little to address this growing threat."
A recent survey of banks uncovers several major issues to address from a regulation and procedural perspective:
- 82% of bankers believe the bank of first deposit is slow in resolving check fraud disputes.
- 68% say the bank of first deposit refuses responsibility for fraud.
- 60% report their own bank reimburses customers for fraud despite not being liable.
In order to address these concerns, a majority of bankers (82%) want regulators to outline clearer rules within which institutions are ultimately responsible for reimbursing customers, and 73% want more collaboration with banks to ensure a quicker resolution to disputes. Additionally, 71% of bankers said they want regulators to offer more support in tracking and sharing fraud information across institutions.
Solutions for Check Fraud
While many in the industry have largely ignored check fraud until the past few years, OrboGraph has been making investments in our technology's research & development to provide constantly improving solutions to check fraud. Consequently, our market launch of our OrbNet Forensic AI technology in 2021 appeared a year before the major spike in check fraud. This technology is what powers our Anywhere On-Us Fraud and Anywhere Deposit Fraud -- the latest check fraud detection solution from OrboGraph.
Furthermore, as part of our open consortium strategy, OrboGraph is currently working with several parties to develop an industry solution for immediate verification and scoring on deposited check items. Details of this partnership and solution will be discussed at our upcoming Innovation Conference and Check Fraud Roundtable -- hosted at the Hilton McLean Tysons Corner on September 15-17, 2025. Both events are free to register.
With check fraud not slowing down, the industry cannot simply continue its reactive approach. Rather, financial institutions need to deploy the technologies available to curb both on-us and deposit fraud, while vendors like OrboGraph continue to to stay a step ahead of fraudsters by constantly developing new innovations .