Checks Are Still the #1 Fraud Target. Here’s How Lockbox Processing Closes the Gap
Checks are old. The fraud isn’t.
Paper checks feel like a relic, but they are still the payment method fraudsters target most. In the Association for Financial Professionals’ 2026 survey, 58% of organizations reported check fraud in 2025. That compares with 30% for ACH debits and 25% for wire transfers. It is the third year in a row checks have topped the list.
And checks aren’t going away. The same research found 91% of organizations still use checks, and 75% have no immediate plans to cut back. The federal government has stopped issuing most paper checks, but that change does not affect whether your customers can pay you by check.
So the real question isn’t whether you’ll handle checks. It’s how safely you handle them. Most fraud advice focuses on checks you send out. This article looks at the other side: the checks your customers mail to you, and how a lockbox closes the gaps.
Where check fraud actually happens
Much of today’s check fraud starts in the mail. The Financial Crimes Enforcement Network (FinCEN) and the U.S. Postal Inspection Service issued a national alert on mail theft-related check fraud in 2023. It noted that criminals have increasingly targeted the mail and mail carriers since the pandemic, stealing personal and business checks alike.
The scale is significant. Banks filed more than 680,000 check fraud reports to FinCEN in 2022, nearly double the 2021 total. In the six months after the alert, institutions flagged over $688 million in suspicious activity tied to mail theft.
Once a check is stolen, FinCEN found that criminals typically alter and deposit it, or use it to commit other fraud. Common tactics include:
- Check washing: erasing the payee or amount with chemicals and rewriting it
- Counterfeiting: using the account and routing numbers on a real check to print fakes
- Fraudulent endorsement: cashing a stolen check without changing it at all
- Identity theft: using personal details from stolen mail for new scams
That third tactic is a blind spot for many businesses. Positive pay, a common bank control, does not protect against fraudulent endorsement, because the check itself hasn’t been changed.
The hidden risk in your own mailroom
For many organizations, incoming payments still follow the same path. Checks arrive at the office, someone opens the mail, and someone else keys the payment into the billing system. Then another person makes a trip to the bank.
Every handoff in that chain is a chance for something to go wrong:
- Checks sit unsecured. Payments can wait in a mail tray or desk drawer, sometimes for days.
- Too few people touch too much. The AFP recommends segregation of duties and dual approvals as core controls. In a small office, one person may open, post and deposit the same check.
- Hybrid work creates gaps. When the office isn’t fully staffed, mail piles up and deposits slow down. Checks waiting to be deposited are checks waiting to be stolen.
- Manual posting invites errors. Re-keying check numbers, amounts and account numbers leads to mistakes that are hard to spot and slow to reconcile.
- Paper records are hard to audit. When a payment is disputed, finding the original check and remittance slip can take hours.
None of this means your team is doing anything wrong. It means the process wasn’t built for today’s fraud risk or today’s workplace.
How a lockbox closes the gaps
A payment lockbox moves check handling out of your office entirely. Customers mail payments to a secure PO Box. A dedicated processing team opens the mail, captures the payments and deposits the funds directly into your bank account.
Here is how that addresses each weak spot:
| Risk in the office | How a lockbox changes it |
|---|---|
| Checks sit in trays or drawers | Payments go to a secure PO Box and are processed promptly |
| One person handles everything | A separate, trained team handles mail, imaging and deposits |
| Deposits wait on office staffing | Deposits happen every business day a payment arrives |
| Manual re-keying | Payment data is delivered as a file your system can import |
| Hard-to-find paper records | Every check and remittance document is imaged and searchable |
Faster deposits matter for security, too. The less time a check spends in transit or in a drawer, the less time it is exposed. Daily deposit reports also give your finance team a clear record to reconcile against, so something missing is noticed quickly.
To be clear, a lockbox isn’t a cure-all. It can’t stop a check from being stolen before it reaches the PO Box, and you still need bank-side controls. But it removes most of the handling risk inside your own walls, which is where many organizations have the least protection.
Five questions to ask any lockbox provider
Not every lockbox service works the same way. Before you sign, ask:
- How often do you deposit? Daily deposits keep cash flowing and cut exposure time.
- What does pricing include? Traditional bank lockbox pricing can include many separate line items. Ask for a clear total based on your volume.
- What format is the payment data in? Make sure it can be imported straight into your accounting or billing system.
- Do you image non-payment documents? Correspondence, address changes and disputes often arrive with payments and need to reach the right person.
- Who do I call when something’s wrong? You want a responsive team that knows your account, not a ticket queue.
How Gemini can help
Gemini’s Payment Lockbox Solutions handle the full mailed-payment process for healthcare organizations, utilities, municipal tax offices, telecom companies and large enterprises. Payments go to secure PO Boxes at the main USPS branch in downtown Evansville, Indiana. From there, we:
- Image every check and supporting document, with payment and non-payment items separated
- Deposit funds every business day a payment is received, by secure ACH to any U.S. bank
- Deliver payment data, like check number, amount and account number, in the format your software needs
- Provide detailed daily deposit reports for easy reconciliation
- Keep pricing simple, with only a few clear cost components
Utilities using Gemini Utility Billing get lockbox payments posted straight to customer accounts, with no custom integration required.
Take check handling off your team’s plate. Request a free discovery call and we’ll walk through your payment volume and workflow.
Sources
- AFP, 2026 Payments Fraud and Control Survey press release
- AFP, Payments Fraud glossary and best practices
- Orbograph, AFP Survey: 58% of Organizations Report Check Fraud in 2025
- Checkrun, Check Fraud Prevention in 2026
- CheckDeposit.io, Are Paper Checks Going Away?
- FinCEN, Alert on Nationwide Surge in Mail Theft-Related Check Fraud
- FinCEN, Mail Theft-Related Check Fraud Financial Trend Analysis
- Orrick InfoBytes, FinCEN warns of surge in mail theft-related check fraud
- Orbograph, FinCEN Reports $688M in Check Fraud Linked to Mail Theft
- Gemini Technology Solutions, Payment Lockbox Solutions
