We at the Arkansas Baptist Foundation are seeing a rise in a troubling trend: check fraud. In recent months, there have been increasing reports of checks being altered and cashed fraudulently— causing potential financial loss and guaranteed administrative headache for churches and ministries.
The most common scheme we are seeing involves checks being stolen from the mail— either from outgoing mail, mailboxes, or possibly from within the postal service. Thieves then “wash” the checks, removing the ink to rewrite the payee and amount. These altered checks are deposited by someone other than the intended recipient, often into fraudulent or stolen bank accounts.
If you ever notice an outgoing check has been altered, time is of the essence! Notify your bank immediately. The amount of time which has passed since the fraudulent check was deposited can change which bank (the depositing bank or the originating bank) has responsibility. If you are to be the recipient of a mailed check, keep in close contact with the sender and notify them if the check does not arrive.
ABF has been a victim of this type of fraud on multiple occasions, both with checks sent out by ABF, and with checks being sent to ABF.
Here are a few steps we have implemented that your church can use to reduce its risk:
- Avoid mailing checks when possible. Use secure electronic payment methods, like ACH transfers or online bill pay, especially for regular vendors or payees.
- Consider using Certified Mail, FedEx, or UPS. These services offer tracking and added security for sending checks or sensitive documents.
- Avoid window envelopes when possible. If you must write and mail checks, consider using plain envelopes to make it more difficult for thieves to determine the contents.
- Make copies of all outgoing checks. Having a good record of all checks cut, and who they were payable to, will aid tremendously in the recovery of any stolen funds.
- Reconcile accounts frequently. Review your bank statements regularly and pay especially close attention to the scanned images of all checks written. Having online access to your bank account can allow you to do this more frequently and thoroughly.
- Notify recipients. Let the payee know when a check has been sent so they can alert you if it never arrives.
- Consider using ‘Positive Pay’. Many banks offer this fraud-prevention service, which verifies checks against a list your church provides before clearing payment—flagging anything that looks suspicious.
Since taking the steps above, we’ve yet to have another case of check fraud (I typed that with my fingers crossed!). Being proactive can help protect your church’s resources and ensure your financial stewardship remains above reproach.