Updated: 5/31/2024

Fraud is the largest source of illicit proceeds in the country, according to the Financial Crimes Enforcement Network (FinCEN). Mail theft related to check fraud has become an especially serious problem, with 680,000 reported instances of this type of fraud in 2022 alone¹.

In this type of fraud, thieves brazenly steal mail right out of residential mailboxes or blue postal mailboxes. Or they steal the keys to cluster mailboxes at apartment complexes so they can break into dozens or even hundreds of mailboxes at once. In some instances, carriers have even been robbed of mail by armed thieves. Criminals rip open envelopes that contain checks, which are relatively easy to spot, and change the payee to themselves, create fake checks or sell the checks on the dark web.

Fewer Checks Written, but Average Amount is High

More than three billion checks were written in 2022. This is down significantly from 1990 when 19 billion checks were written, though the average amount per check is relatively high at $2,430. However, a recent FinCEN alert warned that despite the declining overall use of checks in the U.S., mail theft related to check fraud is on the rise. “Criminals have been increasingly targeting the U.S. mail since the COVID-19 pandemic to commit check fraud,” FinCEN stated in the alert¹.

For example, a criminal ring in Milwaukee used stolen arrow keys to break into blue postal mailboxes and steal more than 900 checks. In North Carolina, a man was convicted of stealing more than 850 pieces of mail containing checks, credit card and financial statements from at least 10 people. And in Missouri, a man was convicted of trying to bribe postal carriers for the keys to mail collection boxes. ²

According to the U.S. Postal Service (USPS), 412 mail carriers were robbed on the job in 2022 while 38,500 incidences of high-volume mail theft were reported. Another 25,000 incidences of high-volume mail theft were committed in the first half of 2023 while another 305 mail carriers were robbed. ³

A Top Concern

“Check fraud related to mail theft is one of our top concerns,” says Emily Koch, CFCI, Capital Bank Financial Crimes Fraud Investigations Lead. “This type of fraud has been on the rise since 2020 and has had a major impact on customers.” ³

Koch says that the fraud typically originates when businesses or consumers utilize the blue postal mailboxes. “In the past few years, the keys for these mailboxes have been circulated and replicated for criminals to gain access to them,” she says. “Once the criminals have the mail, they go through it looking for checks. They will either chemically remove and alter the information on the check, which is known as check washing, or use the information to create counterfeit items.³”

In a case reported by CBS News, a customer mailed a $42 check to pay his phone bill, but the check was stolen by thieves, altered and cashed for $7,000.⁴ In another case reported on Forbes.com, a man settling his father’s estate was victimized when thieves stole a check out of the mail and cashed it in a state where he doesn’t live and had never been. Fortunately, his bank spotted the fraud quickly and alerted him and the thief was apprehended.³

In addition to stealing money, criminals are also stealing identities from the names and addresses printed on pilfered checks. They then use these stolen identities to open bank accounts and apply for loans and credit in victims’ names.

How Criminals Are Circumventing Positive Pay

Many businesses use Positive Pay to help prevent check fraud, but criminals have even found a way around this. Koch explains:

“Positive Pay enables businesses to validate the checks being posted to their account by utilizing information such as the check number, date and amount to review checks posting to the account daily.  If items do not match the information provided, an exception is created for the business to review and decide if the item should be returned.

“However, criminals are aware of how this works so they have begun to keep the same date, amount and check number when they create counterfeit checks,” says Koch. “As a result, Positive Pay does not identify the check as an exception for the business to review.” ³

Steps to Protect Yourself and Your Business

There are a number of steps consumers and business can take to guard against mail theft related to check fraud. For starters, the USPS advises against depositing any mail containing checks in a blue postal mailbox, or even in your own mailbox at home. Instead, the USPS recommends taking mail containing checks directly to the post office and placing it in a secure mail drop there or handing the mail directly to a mail carrier. “Walk your mail inside the post office whenever possible,” says Koch.

Here are a few more ways to guard against mail theft related to check fraud:

• Pick up your mail promptly every day. Don’t let your mail sit in your mailbox for two or three days or longer, which gives thieves more time to steal it.
• Find out about overdue mail. If you’re expecting to receive a check in the mail but it hasn’t arrived yet, contact the sender to inquire about it. At this point, it might be smart to issue a stop payment on the check.
• Use Signature Confirmation. With this service, recipients must sign to indicate that they have received the mail, thus ensuring its delivery.
• Fill out a change of address form when moving. This will help ensure that all of your mail is forwarded to your new address. Also let your financial institution know that you have a new address.

On the business side, Koch stresses the importance of reviewing your business checking account daily. “Otherwise, it will take longer to detect fraudulent activity,” she says. “Time is of the essence when attempting to recover funds so the longer it takes for a business to notify its bank of fraud, the lower the chances of recovery.”

Unfortunately, check fraud due to mail theft isn’t always avoidable because the theft usually occurs at delivery on the recipient’s end. “Often, the best solution is simply not to mail checks at all,” says Koch. “Instead, use electronic payments like ACH or person-to-person payments like PayPal or Venmo.”

If you believe that you are a victim of check fraud due to mail theft, Koch recommends that you contact your bank right away and file a police report with local law enforcement, as well as a report with the U.S. Postal Inspectors. “Also close the compromised account or implement Positive Pay,” she says.

Remember, in cases of suspected check fraud due to mail theft, swift action is crucial to mitigate potential losses and protect yourself or your business from further harm.³

¹ https://www.fincen.gov/news/news-releases/fincen-alert-nationwide-surge-mail-theft-related-check-fraud-schemes-targeting
² https://www.usatoday.com/story/news/nation/2024/02/23/mail-theft-united-states-postal-service-concerns/72703972007/
³ https://www.forbes.com/sites/johnwasik/2023/10/08/why-you-should-be-worrying-about-the-rise-in-check-fraud-and-thieves-stealing-your-mail/?sh=6dd521e5e685
⁴ https://www.cbsnews.com/news/us-postal-service-warning-checks-mail-fraud-theft/