Help Guard Against Check Fraud at Tax Time & All Times

Check fraud is the most common financial crime, with over 521,000 instances reported monthly, and the financial cost having reached an estimated $21 billion. Fraudsters seek to exploit weaknesses in check processing, mail security, and identity verification to steal funds or gain access to funds and financial accounts.

Scammers are relentless thieves all year long, but there’s a surge in counterfeit activity during tax season, when billions in payments and refunds are circulating. Although the number of Americans paying their tax tab with paper checks has gone down to just 18%, mail-related check fraud is on the rise, so it’s easy to see how taxpayers may be prime targets. Here’s more about what check fraud is, how it works, and how you can protect your money.

It can begin with the theft of checks—either from unlocked residential mailboxes or USPS blue collection boxes after the last pickup time. Scammers then turn authentic checks into fraudulent instruments by methods that include:

• Check washing (chemically erasing details, such as the original payee and amount, but leaving the account holder’s signature as is)
• Check counterfeiting (fraudsters using stolen bank account information to create checks that look legitimate)
• Check cooking (digitally modifying check images)
• Forging endorsements (signing the back of a check made out to someone else and cashing it)

Once the checks have been tampered with they are deposited—with tellers, at ATMs, or via mobile deposit—by recruited individuals or sold to other criminals, leading to financial losses, theft, and payment delays. Consumers and financial institutions are often not aware of the theft until after the fraudsters have moved the money. 

The single most important step you can take is to stop using paper checks. When you pay by or are paid by paper checks, you are making it easier for criminals to co-opt them, using check-fraud techniques to steal the funds. Instead, consider switching to  online or mobile banking, with direct deposit and electronic withdrawals. Learn more about digital security features that can provide an extra layer of protection.

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But if a paper check is still necessary or your preferred payment method:

• Don’t ignore warning signs, such as missing mail, bank transactions you didn’t authorize, or checks clearing for different amounts than you wrote
• Mail checks securely in a windowless envelope at the post office rather than from your home mailbox.
• Limit the time your incoming mail lies unattended in your unlocked home mailbox; pick it up promptly after delivery and put a hold on it at USPS.com if you’re going out of town.
• Diligently monitor your accounts for suspicious activity and set up M&T alerts: Learn More>
• Use non-erasable gel ink to write a check; the ink penetrates the paper fibers, making it harder for chemicals to remove it
• Safely shred and dispose of personal documents since scammers can use old checks, ATM receipts, statements, and other documents to find your information
• Don't add personal details, such as your Social Security number, driver’s license number, or additional account numbers on checks or other documents, in case they’re stolen
• Take care to name the correct payee and always make tax payments payable to the U.S. Treasury or the appropriate state or local government agency—never to a tax preparer or other third party
• Consider certified mail of tracking services when mailing payments, especially taxes, to ensure and track delivery

Time is critical. If you believe you’ve been a victim of fraud related to your M&T accounts, notify us immediately so we can take action. And be sure to report suspected incidents to the appropriate authority:

• Federal Trade Commission (FTC) at ReportFraud.ftc.gov for general consumer fraud
• FBI's Internet Crime Complaint Center (IC3) at ic3.gov for internet-related crimes
• United States Postal Inspection Service at uspis.gov/report or 1-877-876-2455 if you believe you are the victim of mail theft-related check fraud
• Your local police department or state’s attorney general's office