Why Mailing Paper Checks is No Longer Safe: Protect Your Business from Fraud in 2025

Why Mailing Paper Checks is No Longer Safe: Protect Your Business from Fraud in 2025

As a business owner, you’re always looking to streamline processes, protect your assets, and reduce unnecessary risks. But what happens when one of your most trusted financial practices—sending checks via mail—becomes one of your biggest vulnerabilities? Unfortunately, that’s the reality businesses across the U.S. are now facing.

Mail theft and check fraud are on the rise, and criminals have developed increasingly sophisticated ways to exploit mailed payments. If your business still relies on mailing paper checks, it’s time to reconsider. In this blog post, we’ll explore the growing issue of check theft, why traditional checks are no longer safe, and how switching to ACH (Automated Clearing House) payments can protect your business and its finances.

The Growing Threat of Check Theft and Fraud

Alarming Statistics

The numbers paint a troubling picture. According to financial reports and government agencies:

  • Check fraud resulted in over $1.3 billion in losses for U.S. financial institutions in 2023.
  • Complaints of mail theft skyrocketed to more than 250,000 incidents in 2023, a massive increase from fewer than 60,000 in 2018.
  • In just six months of 2023, banks reported over $688 million in suspicious activity related to mail theft and check fraud.
  • Check fraud losses increased by 84% according to FinCEN in 2022.

These statistics highlight a disturbing trend: criminals are heavily targeting mailed checks, and the risk of fraud continues to escalate.

How Criminals Are Exploiting Mailed Checks

Criminals are evolving their tactics to steal and exploit checks, using methods that include:

  1. Mail Theft:
    • Criminals break into residential or business mailboxes.
    • Organized groups use stolen USPS arrow keys (master keys) to access secure mailboxes.
    • They target blue USPS collection boxes, sometimes fishing for checks using makeshift tools.

  2. Check Washing & Fraud:
    • Fraudsters use chemicals to erase the original details from checks.
    • They alter the information, inputting their own names and inflated amounts.
    • Counterfeit checks are also created using stolen check images.

  3. Organized Fraud Networks:
    • Criminal groups collaborate across states, using encrypted apps to sell stolen checks and coordinate illegal activity.
    • These networks are sophisticated, with members specializing in different aspects of the fraud process.

Why Paper Checks Are No Longer Safe

Sending traditional paper checks via USPS has become a major liability for businesses. Here are some of the critical issues that make paper checks an outdated and unsafe payment method:

  • Vulnerable Transit: Once a check leaves your office and enters the mail system, it’s exposed to significant risks. Criminals target mailboxes, postal collection points, and even blue USPS boxes to intercept mailed checks. With stolen USPS arrow keys and organized mail theft networks, the chances of your checks falling into the wrong hands are higher than ever.
  • Easily Altered: Checks can be washed or counterfeited, allowing criminals to erase the original details and input fraudulent information. As a result, your business account becomes vulnerable to unauthorized withdrawals. Even the most carefully written check is no match for the tools fraudsters now use to exploit paper payments.
  • Slow Process: Mailing checks is an inherently slow process. Checks need to be printed, mailed, delivered, and then manually deposited by vendors or employees. This delay not only slows down payment cycles but also increases the window of opportunity for fraud.
  • Lack of Communication with Vendors: When you mail checks, it can be difficult to maintain clear communication with vendors about payment status. If vendors don’t receive a check on time or it’s stolen during transit, they may assume your business has failed to pay them. This lack of transparency can damage relationships with vendors, leading to frustration, delays in services, or even penalties.
  • Time-Consuming Monitoring of Mailed and Cleared Checks: One of the biggest challenges businesses face with mailed checks is the time executives and staff must spend monitoring the payment process. This includes:
    • Tracking which checks have been mailed.
    • Confirming whether checks have cleared.
    • Investigating and resolving discrepancies with vendors and the bank.

    When fraud occurs, the process becomes even more time-consuming. Executives are forced to spend hours on the phone with banks and vendors to dispute fraudulent transactions, resolve payment delays, and initiate replacement payments. This wasted time could otherwise be spent on strategic decision-making or growing the business.

  • Banks May Be Less Likely to Help After 30 Days: If your business fails to monitor mailed checks and doesn't catch fraudulent activity early, your ability to recover funds becomes significantly more difficult. Most banks have a 30-day window for reporting fraudulent transactions. If you fail to identify and report the fraud within this time frame, banks are often less willing—or even unable—to assist you in recovering lost funds.

    Without proper monitoring or clear communication with vendors about the status of mailed checks, your business runs the risk of missing this critical deadline. By the time you realize something is wrong, it might be too late to take action, leaving your business to absorb the financial losses.

These additional risks highlight why mailing paper checks is no longer a viable or secure payment method for businesses. By transitioning to digital payment systems like ACH, you can eliminate these vulnerabilities and take control of your payment processes.

How to Protect Your Business

If you’re still relying on paper checks, it’s time to make a change. Here’s how you can protect your business from this growing threat:

  1. Upgrade to ACH Payments
  2. ACH payments, which are electronic transfers between banks, are not only faster and more efficient but also significantly safer than mailing paper checks. Here’s why:

    • Enhanced Security: ACH transactions use encryption and fraud prevention measures. Unlike checks, they can’t be altered or stolen in transit.
    • Cost-Efficiency: ACH payments are cheaper to process compared to the costs of printing and mailing checks.
    • Faster Payments: ACH transfers are typically processed in 1-3 business days, improving cash flow and vendor relationships.

    Transitioning to ACH payments eliminates the risk of theft associated with mailing checks and ensures that your business’s financial transactions are secure.

  3. Implement Banking and Security Best Practices
  4. Implementing robust banking and security best practices is essential for protecting financial assets and sensitive information. Key strategies include:

    • Monitor Accounts Daily: Regularly reviewing account activity helps identify unauthorized transactions quickly, allowing for prompt action to mitigate potential losses.
    • Use Multi-Factor Authentication (MFA): MFA adds an extra layer of security by requiring multiple forms of verification before granting access to accounts, making it harder for unauthorized users to gain access.
    • Set Up Fraud Detection Services: Fraud detection services analyze transaction patterns to identify potentially fraudulent activities. These services can provide alerts for unusual transactions and help prevent financial losses.
    • Implement Positive Pay Services: Positive Pay is a specific fraud prevention tool that helps businesses protect against check fraud. It works by matching checks presented for payment against a list of checks that the business has issued. If a check does not match the issued list, the bank alerts the business, allowing it to approve or reject the transaction. This service is particularly effective in preventing unauthorized checks from being cashed, thereby enhancing overall security measures for businesses.

    By integrating these practices, businesses can significantly reduce their vulnerability to fraud and ensure that only legitimate transactions are processed.

  5. Educate Your Team
  6. A well-informed and vigilant team is one of the most critical defenses against fraud and financial risks. Regular training and communication about potential threats empower employees to recognize and respond to suspicious activity effectively. Here are some key areas for education and encouragement of best practices:

    • Recognize Phishing Scams: Educate your team about the dangers of phishing emails, texts, and messages. These scams often impersonate legitimate organizations or individuals to steal sensitive information or initiate unauthorized financial transactions. Staff should be trained to spot red flags, such as urgent requests, grammatical errors, or unfamiliar email addresses.
    • Secure Payment Processes: Train your team on secure payment protocols to ensure that all transactions, particularly large or unusual ones, are thoroughly vetted. Emphasize the importance of following approved processes and never bypassing them for the sake of convenience or urgency.
    • Understand Financial Risks: Ensure that employees, particularly those handling financial transactions, understand the broader risks of fraud and the potential consequences of errors. This awareness fosters a culture where diligence is a priority.
    • Encourage Red Flags for Fund Transfer Requests: CFOs and other financial leaders should establish clear procedures for handling requests to change fund transfer methods—whether these come from staff, executives, customers, or vendors. Emphasize that any such request should immediately raise a red flag and warrant heightened scrutiny. For example, if a vendor requests a change in their bank account details for payments, staff must verify the request through strict, multi-step verification protocols such as direct phone confirmation with the vendor using a known, official contact number (not one provided in the request).
    • Test and Strengthen Your Team: Executives should routinely test their staff with simulated fraud scenarios to ensure there are no weak links in their department. These exercises help identify vulnerabilities and reinforce the importance of diligence. Employees who are tested and trained regularly are better equipped to recognize and respond to fraud attempts in real-world situations.

    By fostering a culture of vigilance, implementing strict verification protocols, and regularly testing staff, CFOs can ensure their teams are prepared to handle potential threats effectively and safeguard the organization’s financial assets.

  7. Protect Your Mail
  8. If you must send paper checks temporarily:

    • Use secure mailboxes or USPS-approved collection points.
    • Consider using certified mail with tracking.
    • Avoid leaving outgoing mail in your office or home mailbox overnight.

The Case for Change: Why Businesses Must Adapt

The days of paper checks being a reliable and safe payment method are behind us. Criminals have adapted, and businesses must do the same. Ignoring these risks could lead to significant financial losses, reputational damage, and operational disruptions.

By switching to ACH payments, implementing robust security practices, and educating your team, you can protect your business from becoming a victim of check fraud.

Final Thoughts: Take Action Now

Mail theft and check fraud are growing threats that no business can afford to ignore. Transitioning to ACH payments is not just about convenience—it’s about protecting your business’s financial future.

Next Steps for Your Business:

  1. Evaluate your current payment processes and identify vulnerabilities.
  2. Partner with your bank to set up ACH payment solutions.
  3. Train your team on secure payment practices and fraud prevention.
  4. Monitor your accounts regularly and leverage fraud detection tools.

The time to act is now. Don’t wait until your business becomes the next victim of check theft. Make the transition to secure, efficient, and modern payment methods today.

By taking these steps, you can ensure that your business stays ahead of the curve and protects its financial integrity in an increasingly risky environment.

Stay safe. Stay smart. Stay secure.