Fraud - Check Fraud Statistics
In this article we're going to cover check fraud. Check fraud is
the copying and/or duplicating of checks, usually using desktop
publishing programs, for the purpose of purchasing goods or
services using someone else's account. The victims of this fraud
include financial institutions, businesses who still accept
checks and the consumer himself who has had his checking account
compromised. In most cases the crimes begin with the theft of
the document. This is as easy to do as somebody breaking into
your home and stealing a blank check or even going through your
garbage to steal an old canceled check. After that, it is a
simple matter to forge your bank account number to go with a new
ID. While it doesn't make up the majority of financial fraud,
now that we have credit cards and online shopping, it is still a
problem that accounts for a great amount of money each year. How
much? Let's take a look at some statistics.
In one year merchants take in over $13 billion dollars in bad
checks. Each year shows an increase of about 18 percent. This
number is still expected to grow in spite of the fact that more
and more purchases are made online or with credit cards.
It is estimated that 75% of the vendors use third party
verification services. This makes it more likely that bad checks
are going to get through as opposed to vendors who use manual
approval methods or some in house system. Unfortunately, it is
cheaper to go with a third party service and that is why most
vendors do so.
It is estimated that more than 2.2 million bad checks enter the
system each day and they expect this number to increase anywhere
from 2 to 4 percent over the coming years. This is a staggering
figure when you project this out over the course of a year.
On the average, banks charge about $20 per each bad check to the
person who issued the check and $5 per check to the person who
deposited the check. Of course in many cases of stolen checks,
the person being charged back doesn't even realize a purchase
had been made.
According to the American Collectors Association, Americans
write about 1.7 million bad checks each day totaling more than
$50 million in bad check losses. This is the largest figure
world wide and it is growing daily.
As to the checks that are stolen or forged, the number of these
that are written each year comes out to about 500 million checks
and over $10 billion in lost revenue. Check fraud in itself is
expected to grow at a rate of about 2.5% each year according to
the current trend.
The average number of fraudulent checks written daily is about
1.4 million which comes out to about $27.3 million worth of
fraudulent checks written everyday.
According to the National Check Fraud Center, check fraud and
counterfeiting are the largest and fastest growing problem that
the United States financial system now faces. The estimated
losses produced annually are over $10 billion and is expected to
rise substantially over the coming years.