Reports of cyber fraud might make a person wary of banking online. But it’s actually safer to pay your bills online today through a reputable financial institution than with a paper check.

In fact, check fraud is the number-one fraud in the United States today by value of deposit account fraud losses.1 Meanwhile, recovery of any losses is actually more likely if your transaction is handled digitally by a bank, as digital money movement is generally easier to trace.

One question we hear a lot about digital banking is: Is it safe? Our answer: Yes, with the right financial institution.

The convenience of online banking is undeniable: You can handle transactions anytime, day or night, and make your transactions or account changes anywhere you have a connection to the internet. You can also monitor your account and transactions in real time.

No wonder people are turning to digital banking. In fact, according to Business Insider Intelligence’s report, The Next Generation of Banking: “The most prevalent trend in the banking industry today is the shift to digital, specifically mobile and online banking.” A stunning 89% of respondents to its most recent survey said they used mobile banking in 2018, up from 83% in 2017.2

Banks such as J.P. Morgan invest a great deal in sophisticated fraud prevention. We’re spending upwards of $600 million in 2020 on cybersecurity, and we have a global team dedicated to this priority.

Our firm also has multiple layers of protection beyond user ID and password authentication for accessing your account information online. Secure tokens are available and device verification is required. We also recommend you set up email and text alerts to monitor suspicious account activity. And we will be monitoring your accounts and contacting you if we detect transactions that seem outside your normal activities. 

If you think your account has been compromised in any way, speak with your J.P. Morgan team member immediately.

There are many benefits to banking digitally, including increased convenience and security. By banking online, you can transact at any time, transact or make account changes anywhere you have an internet connection, reduce the amount of callbacks required and get real-time transaction statuses. In regard to security, banking digitally means you will not receive transaction instructions over email or account information by postal mail, and you have the availability of transaction alerts and secure tokens for safer log-in experiences.

Meanwhile, using traditional paper checks has become risky.

Check fraud is on the rise. In the United States alone, check fraud jumped from $6.6 billion to $15.1 billion from 2016 to 2018, according to the American Bankers Association.3

Paper checks are risky because they contain sensitive and personal information such as your name, address, account number, routing number and signature, all of which fraudsters can use to access your account and attempt to steal your funds.

Fraudsters use this wealth of information to pose as you and access your accounts. Here are their four most common tactics: 

  1. Theft and forgery—They steal your checks and fraudulently endorse them.
  2. Counterfeiting—They make withdrawals or payments using counterfeit checks that contain your account number and routing number.
  3. Check washing—They replace payee information with their own information (after stealing the check in the mail).
  4. Check kiting—They can trick you into withdrawing funds against a deposited check, often a counterfeit check, before the check clears.

 

One of our clients, Jessica, was a victim of check washing:4

Jessica had been writing checks her entire life. Each month after all her bills arrived, she’d write her checks, stuff them in stamped envelopes, and drop them in the mailbox. She hadn’t set up any automatic debits because she was nervous about going digital. Until, one day…

Jessica received notice her mortgage payment was late. After calling her J.P. Morgan representative to investigate, she learned that the payee name had been changed on her mortgage payment check and that her account had a few debits she did not recognize. 

How could that happen?

Jessica’s check had been intercepted by fraudsters, who had stolen the envelope from the mailbox and changed the payee name to their own. They also used her account and routing number to process payments to third-party service providers for their benefit.

Upon learning this, the recovery process began: renumbering Jessica’s account and helping her relink her debit card. Her representative told her about the safeguards in place for the bank’s online payment system, and she went digital.

We invite you to take these measures to protect yourself against check fraud:

  1. Pay your bills online through your bank. When you use online bill payment systems, your bank sends a check on your behalf without disclosing your personal checking account number.
  2. Sign up for paperless billing and statements so fraudsters can’t steal your account information.
  3. Check your online banking accounts at least monthly for unauthorized activity.
  4. Set up online alerts for any account changes or withdrawals over $0.01, so you will be immediately notified if fraudulent activity takes place.
  5. If you do use physical checks, do not pre-print or include personal information on them. No addresses, for example.
  6. Examine new checkbooks for missing checks (look at the number sequence). 
  7. Shred any blank or unused checks you no longer need.
  8. Store checks in a secure, locked location that only you have access to.
  9. If you have a business or commercial checking account, engage advanced check fraud prevention services at your bank.

As soon as you think you may be a victim of check fraud—or any other type of fraud—contact your J.P. Morgan representative. Our teams work around the clock and will start the recovery process immediately, and work with you to recover lost funds.

Speak with your representative to learn more about our cybersecurity and fraud awareness programs, and to schedule an information session with our fraud professionals.

1 American Bankers Association. Banks Stop $22.3 Billion in Fraud Attempts in 2018. Data as of January 15, 2020.

2 Making Banking Competitive Study, Business Insider Intelligence (2018).

3 American Bankers Association. Banks Stop $22.3 Billion in Fraud Attempts in 2018. Data as of January 15, 2020.

4 All case studies are based on real-life stories but have been altered to preserve privacy and confidentiality. Any name referenced is fictional and may not be representative of other individuals’ experiences. Information does not guarantee future results.