It's Like Déjà Vu All Over Again - WST

Yogi Berra was probably more well known for his nonsensical expressions than his play on the baseball field – but who doesn’t like a good Yogi-ism? I mean, if anyone knew what the feeling of déjà vu was, it must have been Yogi since he obviously experienced it twice, right?!

And as much as I love baseball (Opening Day is almost here!), what does this have to do with risks facing financial institutions? A few weeks ago, FinCEN posted FIN-2023-Alert003 describing a resurgence in mail-theft related check fraud. Talk about déjà vu! Personally, I thought check fraud was a thing of the past or at least on the decline, but as this FinCEN Alert points out, even though the use of checks continues to decrease, in 2021, FinCEN SAR filings for check fraud increased 23% from the prior year, and this amount nearly doubled in 2022.

Criminals who take checks from the U.S. mail are not overly particular about the types of checks they steal – personal checks work well, but business checks are especially valuable because commercial accounts are likely to have more available funds and it might take longer for the victim to notice the fraud. The criminals might be individuals, but oftentimes the thieves are part of organized crime units who have recruiters, check washers, and money mules. Once stolen checks are altered, the criminals rapidly remove the funds through ATMs or wires and may even steal the ID of the original account owners.

The FinCEN Alert provides financial institutions with a list of Red Flags to monitor for potential mail theft-related check fraud. For example, customer complaints that mailed checks were never received by recipients or a sudden, abnormal deposit of checks followed by a rapid withdrawal of funds are reliable red flags. The Alert also prompts financial institutions to refer their customers who may be victims of mail theft-related check fraud to contact the United States Postal Inspection Service (1-877-876-2455). Lastly, when filing a SAR related to this type of activity, FinCEN has instructed financial institutions to include the key term FIN-2023-MAILTHEFT in SAR field 2, as well as the SAR narrative, and select “check fraud” in SAR field 34.

You can access the FinCEN Alert via this link:
https://www.fincen.gov/sites/default/files/shared/FinCEN%20Alert%20Mail%20Theft-Related%20Check%20Fraud%20FINAL%20508.pdf

It might be difficult to stop all mail theft-related check fraud, but hopefully if we can keep our eye on the ball (aka spot the Red Flags) and have some perfectly timed swings (file those SARs), we can hit some homeruns of our own! Because as Yogi also said, “The future ain’t what it used to be!”

Authored by: Joann Lang, CAMS, CIA, CCBP