Similar to identity theft, this type of fraud happens when an unauthorized individual gain access through online banking applications, capturing the account information to create and write bad checks.
An adverse action notice is a document sent to a loan applicant stating a bank’s rationale for denying a loan. It may also contain a counteroffer, such as a lesser amount or a request for an approved co-borrower.
The term “aging exceptions” refers to a group of critical exceptions that have not been resolved within a reasonable amount of time.
Altered check fraud occurs when a fraudster changes the amounts and Payee from a stolen check.
API is short for “application programming interface.” Technology companies like Alogent rely on APIs to connect multiple software applications, thereby enabling a two-way exchange of information to support users’ needs.
Audit and exam prep is a process that financial institutions go through in order to adequately prepare for upcoming audits and exams.
An authorized signer form is a document that allows an account holder to grant a range of clearance levels to individuals to perform certain functions within a bank account.

What is check fraud and how can you a bank or credit union protect their institution and account holders?

Check fraud can be defined as using paper or electronic checks to obtain money illegally and can occur at any step in the user journey or from any deposit channel. As the most prevalent type of fraud at financial institutions, check fraud costs billions of dollars in losses annually, while impacting millions of account holders each year. 

Solution providers like Alogent specializes in check fraud mitigation solutions that help financial institutions prevent and detect fraudulent activities associated with checks. With a comprehensive approach that includes advanced technologies for image analysis, signature verification, and anomaly detection, these solutions ensure robust protection against forgery, counterfeiting, and unauthorized check issuance.

Common examples of check fraud include: 

  • Account Takeover

    Like identity theft, this type of fraud happens when an unauthorized individual gain access through online banking applications, capturing the account information to create and write bad checks. 

  • Altered Checks

    Altered check fraud occurs when a fraudster changes the amounts and Payee from a stolen check.

  • Check Kiting

    This type of fraud involves two accounts from different financial institutions. Here the account owner writes a check from one account and deposits it into the other account so as to inflate the balance and then withdraw the funds.

  • Check Washing

    With Check washing, checks are washed with chemicals to erase the information and populated with new information. 

  • Counterfeit Cashiers/Official Checks

    Duplicating a negotiated check or an official check. 

  • Lottery Check Scams

    Victims of lottery check scams receive checks for their winnings, but they are instructed they must return some of the funds for fees and taxes. 

  • Money Order Fraud

    Money order fraud happens when a fraudster purchases a money order for a dollar then changes the amount in figure to a higher amount. 

  • Paycheck Scams

    With paycheck scams, the fraudster reaches out to the victim and offers a work from home job, to be a secret shopper, use their vehicle for advertisement (Car Wrapping) or to test out a money transfer service. A check is then mailed to the victim with instructions. 

Mitigate Your Risk for Check Fraud with Alogent

With comprehensive, built-in check fraud mitigation capabilities, Unify, Alogent’s modern deposits platform for all full- and self-service channels, helps protect financial institutions and their account holders by mitigating attempts before they reach the back office or downstream workflows.

Explore more resources

Alogent Shield+ Datasheet

Check fraud poses a significant challenge for financial institutions, leading to substantial costs and risks for account holders. As fraud tactics continue to evolve, banks and credit unions must be proactive in protecting their assets and maintaining account...
Read More »

Alogent Shield Datasheet

As check fraud becomes increasingly complex and costly for financial institutions, finding a universal solution is more challenging than ever. With rising threats across all deposit channels, no institution is safe—just one successful attack can lead to...
Read More »

Related articles

Wednesday 11 December 2024

Preparing for the Holiday Surge: How Real-Time Check Processing Helps Banks and Credit Unions Combat Fraud and Boost Efficiency

From holiday shopping sprees to end-of-year payments, the winter months bring a rise in transaction volumes and a greater focus on more secure, efficient check…

Read the Blog

Wednesday 4 December 2024

Checks Matter: Why Checks Are Still Essential in a Digital Payment Era

The notion that checks may become obsolete has been a topic of discussion in the banking and financial services industry as digital payments gain popularity…

Read the Blog

Monday 2 December 2024

How Commercial Loan Approval Works in AccuAccount

With AccuApproval for AccuAccount, your bank or credit union can achieve a scalable workflow that aligns with your commercial lending process. It’s a great option…

Read the Blog

Monday 25 November 2024

Digital Banking Series Part 2: Next Steps for Upgrading your Digital Banking Platform

After evaluating the pros and cons of upgrading your financial institution’s digital banking platform, you may find that switching solution providers is the most viable…

Read the Blog

Tuesday 12 November 2024

Q&A Series, Part 1: Navigating Consumer & Business Digital Banking with NXT

Monica Moore, Alogent's CTO, shares her insights into how NXT is setting new standards for digital banking, from enhancing user journeys to integrating dynamic content…

Read the Blog

Monday 28 October 2024

Don’t Get Haunted by Check Fraud this Halloween: Protect Your Deposit Channels with Alogent

Combatting check fraud poses significant challenges, as fraudsters often view checks as outdated and easy targets for sophisticated schemes. While advanced payment technologies can greatly…

Read the Blog

Thursday 24 October 2024

Streamlining Document Management: Key Strategies for Archiving and Retrieval in the Banking Market

Effective document management is crucial for success in the banking sector. Given the rapid increase in both paper and electronic records at financial institutions, it…

Read the Blog

Tuesday 15 October 2024

Q&A Series, Part 2: Unify’s Multi-Channel Capture, Tailored Merchant Solutions, and User-Friendly Interfaces for Tellers

In part 2 of our series, we dive even deeper into Unify, focusing on how it continues to support financial institutions and address the latest…

Read the Blog