OrboNation Newsletter: Check Processing and Fraud – June 2025
USPS Report Shows Ineffectiveness of New eLocks for Mail Theft
A major component to Project Safe Delivery -- the USPS Initiative to fight back against mail carrier and mailbox robberies -- is the installation of new electronic locks that can only be opened utilizing an electronic device with a specific code of frequency to open the mailbox. The scanner, known as the Mobile Delivery Device – Technology Refresh (MDD-TR), was meant to deter criminals, as it could be deactivated if reported stolen.
As described by the USPS:
- The MDD‑TR is a handheld mobile scanning device used by Postal Service employees to improve real-time delivery scanning capabilities. It includes features like hazard maps, GPS, and address modification tools.
- eLock technology was introduced to enhance mail security by replacing traditional arrow keys, which are often targeted by thieves.
While this effort was praised by many, there are also critics who believe that this has been a major failure, given results from the report.
Closing the AI Gap in Banking: Leveraging Low-Code and No-Code Platforms
Despite the transformative potential of artificial intelligence (AI), we've seen many banks struggle to scale their AI initiatives beyond the proof-of-concept stage. As outlined in a recent post on BAI.org post by Jay Venkateswaran, Business Unit Head, Banking & Financial Services at WNS, legacy systems, compliance concerns, and the fear of costly missteps often hinder progress.
CPA Advisory Firm Herbien Takes on Check Fraud in their Latest Podcast
#FraudFighters do not just work for financial institutions or fintechs; they come from all different types of financial services companies -- including accounting.
Case in point: Herbein -- a 50+ year old CPA advisory firm -- takes on the challenges of check fraud in the latest episode of The Herbein Podcast.
The podcast breaks down check fraud for the listener, going over several key elements that include different tactics used in fraud schemes.
Government Takes on Fraud with Proposed “Payments Fraud Task Force”
The U.S. Government and its agencies have stepped up recently to take on financial crimes. For check fraud specifically, there were several actions taken.
Now, according to a new article from PaymentsDive, U.S. Senators are pushing for a "Payments Fraud Task Force."
Citizens Bank 2025 Payment Trends Survey:
Businesses View Checks as “Less Susceptible” to Fraud
While most financial institutions are aware that check payments are more susceptible to fraud, it appears that businesses do not share the same belief. We recently covered the 2025 AFP Payments Fraud and Control Survey Report, noting that 63% of businesses were victims of attempted or successful check fraud. Now, we have additional data from Citizens Bank.
Citizens Bank has recently published findings from their 2025 Payment Trends report, surveying 315 small-to-mid size business leaders in March 2025. While the AFP reported 91% of business utilizing checks, the sample from Citizens Bank notes only 47% of these business reported using checks.
The discrepancy can be attributed to the different demographics, but even with the smaller utilization of checks, one thing is clear: Check fraud remains a persistent threat. In fact, among those who experienced fraud, 53% say they use checks.
A key theme of the report is the misguided belief that checks are somehow less susceptible to fraud. The report notes that, while some of the check utilization is driven by vendors, "quite a few do cite fraud as a reason why they stick with checks."
Jack Henry & Associates: Check Fraud Tops Fraud Trends to Watch for in 2025
As financial technology continues to advance, fraudsters are finding new and sophisticated ways to exploit vulnerabilities and target financial institutions and their customers. A new Jack Henry Fintalk post takes a look at several key fraud trends emerging in 2025 that community banks and credit unions must be prepared to address.
Government Phasing Out Treasury Checks? Well, Not All…
On March 25, 2025, the administration signed an executive order entitled Modernizing Payments To and From America’s Bank Account. The Sec. 3. of the executive order details actions to take place, noting that:
Effective September 30, 2025, and to the extent permitted by law, the Secretary of the Treasury shall cease issuing paper checks for all Federal disbursements inclusive of intragovernmental payments, benefits payments, vendor payments, and tax refunds, except as specified in section 4 of this order.
Reg CC Modernization: Will It Help Credit Unions Address Check Fraud?
The America's Credit Unions group is advocating for updates to Regulation CC in order to better combat persistent check fraud risks.
Regulation CC is, of course, a key federal regulation governing how quickly banks and credit unions in the United States must make deposited funds—especially checks—available to customers. It also sets standards for the collection and return of checks, and mandates clear disclosure of funds availability policies to consumers.
For 66% of Zillennials, Mobile Phone = Bank Branch
Who are these "Zillennials" you ask? Well, they're the generation that straddles the line between millennials and Gen Z - the 20-somethings and early 30-somethings who grew up with smart phones surgically attached to their hands (check out this report from PYMNTS.com for more information on Zillennials).
How Financial Institutions Can Help Push Payment Modernization to Businesses
Over the past few years, FIs, along with fintech vendors, have taken the initiative in pushing innovation and new technologies to modernize payments. While new payment rails get a majority of the attention, we can't forget that this also includes modernizing legacy payments like checks -- where AI and machine learning are streamlining and automating processing of paper checks.
Jack Henry eBook: Turning Positive Pay Into Revenue Generation
As noted previously, the adoption rate of Positive Pay remains shockingly low. In fact, according to research from Alkami & Datos Insights, 65% of financial institutions have less than half of their treasury service clients using Positive Pay, and 39% have less than 25% adoption.
While recruiting corporate clients to Positive Pay offers the major benefit of fraud loss reduction to both FIs and their corporate clients, many banks do not perceive a strengthened revenue stream, according to the recently published eBook from Jack Henry entitled Using Treasury Management to Build a Stronger Bank.
It’s Time to Make “Catch All Fraud” Detection Systems Obsolete
Despite being in operation for a decade, the "Catch All Fraud" detection system has failed to live up to its billing of successfully apprehending all fraudulent activity. The FraudWit blog examines serious questions about its effectiveness and utility in today's rapidly changing financial landscape.
Examining the “Hotspots” for Mail Theft/Stolen Checks
Mail theft and mail carrier robberies are a major factor contributing to the rise in check fraud over the past half decade. Criminals know that within those familiar USPS blue mailboxes are hundreds of documents that can fetch a small fortune, including credit/debit cards, personal identification information -- and, of course, paper checks. To get easy access, criminals are targeting mail carriers, stealing their arrow keys to unlock the mailboxes.
Former Scammer Details How He Learned to Perform Check Fraud from Behind Bars
A factor that we commonly bring up when discussing fraudsters is their willingness to teach each other the tips and tricks needed to commit check fraud. And, while many times this occurs digitally through social media and other messaging platforms, there are still those who learn in-person...and, as per today's case, in a prison cell.