Paper Checks are Still Around. And They’re Still Causing Trouble.

January 25, 2024

Paper Checks are Still Around. And They’re Still Causin

There’s nothing new under the sun. Nowhere in finance is that expression more apt than fraud schemes. Criminals love to make the old new again, and as it just so happens, paper checks are among fraudsters’ revived channels of choice.  

Even though the use of checks is down significantly (45% of Americans didn’t write a single check in 2022), fraudsters still find value in their vulnerability. And that puts nearly every business at risk. Why? Because those relics of our financial past still audaciously display the keys to our financial kingdoms, namely valuable identity and account information.

Fear Not. There’s Something You Can Do.

“Most businesses add fraud protections to their accounts only after they’ve been victimized,” said Bank Iowa Vice President of Treasury Management Amber Weger. “At that point, they’re often out the money that was stolen.”

Because they are not covered by Reg E, businesses have just 24 hours to report fraudulent electronic payment fraud. Although paper checks don’t technically qualify as electronic payments, fraudsters will often lift routing and account numbers from a paper check to initiate an ACH transfer, for example.

“I’d love to see more owners and their finance teams get proactive with their fraud mitigation strategies,” continued Weger. “Especially with the rise of banking automation, many of today’s preventative tools require little to no action on the part of the business owner.”

Fraud Prevention in Real Time.

Positive Pay, for instance, is among the automated, real-time fraud mitigation solutions Bank Iowa offers its business clients. Connected seamlessly to the business’s commercial online banking, Positive Pay compares an expected payments file with live transactions as they are presented. Upon detecting the slightest mismatch (e.g. in amounts, check numbers or payees), the system sends an alert directly to the business owner.

A recent fraud incident provides a meaningful example of Positive Pay’s impact. A former rental stole the account information at the bottom of their security deposit return check and used it to make a personal credit card payment. Positive Pay thwarted the attempt, however, saving the property management firm thousands of dollars and hours of headaches.

Regardless of the volume of checks in the marketplace, they continue to present risks to the business ecosystem. Companies would do well to include this threat in their 2024 risk management plans and to take concrete steps to mitigate it… with Bank Iowa’s Treasury Management solutions!

To learn more about Positive Pay and other fraud mitigation strategies, send an email to