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Debit card fraud up, while check fraud declines

No surprise here. The use of debt cards are way up, so of course fraud increased. The opposite is true for paper checks.

During a year that saw a record rise in financial crime reports, one scam that has plagued banks and consumers for decades is fading away: check fraud.

Reports of suspected counterfeiting, check fraud, and check kiting were among the financial crimes that saw declines during 2011, dropping 7.5 percent from 2010.

The drop in check fraud came as the Financial Crime Enforcement Network (FinCEN) had a record number of suspicious activity reports (SARs) in 2011 throughout the financial industry.

The number of check-related suspected crimes peaked in 2008, with banks sending 152,874 suspicious activity reports to FinCEN. From there, the cases are investigated by federal, state, or local authorities, depending on the amount of money involved in the crime.

Since 2008, the number of check-related crimes has dropped to 107,041.

The drop in check fraud numbers points to a trend many Americans are familiar with, the slow disappearance of checks.

The use of checks as a form of payment has been declining in recent years. Personal check use has dropped by 12 percent among consumers between 2008 and 2010, according to the American Bankers Association.

Meanwhile, the use of debit cards has increased, and with it, debit card-related crime.

From 2006 to 2009, the use of debit cards as a form of payment rose 14 percent among Americans, while debit card crimes rose 41 percent, according to data from the Federal Reserve and FinCEN.

Category: Identity Theft News
Posted on March 27, 2012 at 09:31 AM | Permalink