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Check fraud is skyrocketing, and financial institutions are scrambling to keep up. In this episode of Wrestling Payments, host Joseph Casali sits down with Sean Carter, President & CEO of NPG, to unpack why fraudsters are winning—and how banks and businesses can fight back. Carter explains the alarming rise in fraudulent checks, the organized crime networks behind them, and why simply “not writing checks” isn’t a realistic solution for many businesses.

The conversation dives into Positive Pay, a tool designed to prevent check fraud before it happens. Carter shares firsthand experience with fraud prevention, including how NPG caught a fraudulent check that would have cost years’ worth of fees. The discussion also highlights the surprising gaps in adoption—many banks assume businesses won’t pay for fraud prevention, while businesses often don’t even know the service exists.

Casali and Carter wrap up with key takeaways from a recent fraud prevention survey, revealing why businesses hesitate to adopt protective measures and what banks can do to improve adoption. Tune in for expert insights on keeping your business’s payments secure.

GUEST-AT-A-GLANCE
Sean Carter, President & CEO
Neach Payments Group
Leads fraud prevention, audits, and risk assessment for banks and fintechs.
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KEY INSIGHTS
Check Fraud is Organized Crime, Not Random Theft

Check fraud isn’t just small-time criminals altering checks—it’s a sophisticated, organized effort. Criminals steal checks through targeted mailbox break-ins, sometimes even at gunpoint, and use advanced methods to wash, alter, and deposit fraudulent checks. Many businesses still assume check fraud is a rare occurrence or that it won’t happen to them, but fraudsters are systematically exploiting weak security measures in the payment system. Sean Carter emphasizes that stolen funds aren’t just lost money—they fuel activities like drug trafficking and other criminal enterprises. This highlights the urgent need for businesses and financial institutions to take proactive security measures rather than waiting until fraud happens to take action.

Positive Pay Works—But Many Businesses Don’t Use It

Positive Pay is a proven fraud prevention tool that helps businesses verify checks before they clear. According to Carter, companies using Positive Pay see a significant reduction in fraudulent transactions. Despite this, many businesses either aren’t aware of it or believe they won’t be targeted by fraud. The episode reveals a disconnect: financial institutions assume businesses won’t pay for fraud prevention, while businesses often don’t even know the service exists. The data supports Positive Pay’s effectiveness, yet many companies only adopt it after experiencing fraud firsthand. Carter argues that banks should be more proactive in educating clients and even consider requiring a waiver if businesses opt out, ensuring they understand the risks.

The Hidden Costs of Check Fraud Go Beyond Stolen Money

When fraud occurs, it’s not just about losing money—it creates disputes, damages bank-client relationships, and leads to costly legal battles. Carter explains that fraud victims often face unexpected costs beyond the stolen amount, including time spent investigating fraud, reputational damage, and potential double payments if a vendor’s check is altered. Financial institutions that fail to offer strong fraud prevention tools also risk losing business, as companies may seek banks with better security measures. The episode underscores the need for a mindset shift: fraud prevention should be seen as an investment, not an expense.