# Cheque fraud in 2026: what the numbers say, and how it’s done

UK cheque losses hit a record low in 2025, but forgeries rose. In the US, cheques are still the most attacked payment. The latest figures, and the methods.

**In short:** Cheque fraud is shrinking in the UK and still common in the US, and in both it is shifting towards stolen genuine cheques. UK losses hit a record low of £4.1m in 2025, but forgery cases rose by 45 per cent.

Cheque fraud should be a dying crime. In the UK hardly anyone writes cheques any more, and in the US the Treasury was ordered to stop issuing its own paper cheques last autumn. Yet in both countries banks are still writing about cheques in their annual fraud returns, and what they describe is a crime that is getting smaller in one place, larger in another, and changing shape in both.

The short version is that the old tricks are giving way to a cruder one. Fraudsters are spending less effort printing fake cheques and more effort stealing real ones, then signing them.

## The UK: record lows, with one exception

UK Finance's Annual Fraud Report 2026, which covers 2025, puts losses from unauthorised cheque fraud at £4.1m. That is down 49 per cent on 2024 and the lowest figure the industry has ever reported. The number of cases fell 28 per cent to 795, also a record low. For scale, total UK payment fraud losses were £1.28bn last year, so cheques now account for well under one per cent of the money lost.

The fall is real, but it doesn't mean criminals have stopped trying. The value of cheque fraud that banks stopped before any money moved doubled, from £53.8m to £107.4m. Banks prevented 96 per cent of attempted cheque fraud without a loss. Attempts went up; banks simply caught more of them.

The split by type is more revealing. UK Finance divides cheque fraud into three types:

- **Counterfeit cheques**, printed on non-bank paper to look like genuine ones and drawn on real accounts: £0.5m lost, down 53 per cent, with cases down 49 per cent to 139.
- **Fraudulently altered cheques**, genuine cheques written by the customer and changed before they are paid in, usually the payee's name or the amount: £1.9m, down 67 per cent, with cases down 50 per cent to 292.
- **Forged cheques**, genuine cheques stolen from an innocent customer and used with a forged signature: £1.7m, **up** 21 per cent, with cases **up** 45 per cent to 364.

![Bar chart of 2025 UK cheque fraud cases: forged 364, fraudulently altered 292, counterfeit 139.](https://unforged.ai/media/35700287594e-cheque-cases-by-type-1280.webp)

Forged cheques were the most common type of UK cheque fraud in 2025. Source: UK Finance, Annual Fraud Report 2026

Forgery was the only one of the three to grow, and it is now the most common, accounting for almost half of all cases. Counterfeits and alterations both leave marks on the paper that banks have learned to look for. A forged cheque doesn't: the cheque itself is perfectly genuine, and the only thing wrong with it is the signature.

## The US: still the most attacked payment

The American picture is different in kind, not just in size. Cheques remain in heavy everyday use by businesses, and they are still the payment criminals go after most.

The Association for Financial Professionals' 2026 payments fraud and control report, based on responses from 465 treasury practitioners in January 2026, found that 76 per cent of US organisations experienced attempted or actual payments fraud in 2025. Cheques were the most targeted payment method, named by 58 per cent. The habit is sticky, too: 72 per cent of organisations that pay by cheque plan to carry on doing so, most often because their suppliers ask for it.

The banks see the same thing from the other side. The Federal Reserve's 2026 Risk Officer Report, drawn from 403 financial institutions, found that 63 per cent had seen cheque fraud attempts in the past year and 31 per cent had lost money to it. Cheque fraud was second only to debit card fraud, and the traditional forms of it were on the rise:

- 32 per cent of institutions reported more counterfeit cheques
- 21 per cent reported more cheque washing
- 18 per cent reported more cases where the payee's name had been altered

![Bar chart: 32 per cent of US institutions saw more counterfeit cheques, 21 per cent more washing, 18 per cent more altered payees.](https://unforged.ai/media/fd862fcb5278-us-check-fraud-rising-1280.webp)

US institutions reporting increases in each type of cheque fraud. Source: Federal Reserve Financial Services, 2026 Risk Officer Report

The figures on stolen cheques are the most striking. Some 89 per cent of institutions had dealt with altered payee names, 84 per cent with forged endorsements and 83 per cent with washed cheques. For a fraud team in an American bank, that is the everyday caseload rather than the exotic end of it.

The longer trend comes from FinCEN, the US Treasury's financial intelligence unit. Banks filed more than 350,000 suspicious activity reports about cheque fraud in 2021, and more than 680,000 in 2022, nearly double. FinCEN then asked institutions to tag reports that involved mail theft. In the six months to the end of August 2023, 841 institutions filed 15,417 such reports covering about $688m in actual and attempted transactions.

Washington's own answer was to leave the medium. Executive Order 14247, signed in March 2025, told the Treasury to stop issuing paper cheques for federal payments from 30 September 2025, wherever the law allows. Its stated reason was that Treasury cheques have historically been 16 times more likely than electronic payments to be reported lost, stolen, returned undeliverable or altered.

## How it is done

Most cheque fraud today starts with a real cheque in the wrong hands. The methods differ in sophistication, but they follow a recognisable sequence.

**Getting the cheque.** In the US the main source is the post. FinCEN and the US Postal Inspection Service have described thieves raiding the blue collection boxes, unsecured home mailboxes and the cluster boxes outside apartment blocks. Some use "fishing" devices, sticky lines lowered into a collection box. Others use stolen or counterfeit master keys, known as Arrow Keys, which open whole banks of boxes; carriers have been robbed for them. Newly ordered chequebooks are taken in transit too. In the UK the volumes are far smaller, but UK Finance's definition of a forged cheque starts in the same place: a genuine cheque stolen from an innocent customer.

**Changing it.** Cheque washing uses readily available chemicals to remove the original ink from a genuine cheque. The payee and amount are then rewritten, often with the amount raised by hundreds or thousands. FinCEN's review of mail-theft reports found that altering a stolen cheque and paying it in was the most common outcome, at about 44 per cent of reports.

**Copying it.** A stolen cheque is also a template. It carries the account holder's name, sort code or routing number, account number and a sample of their signature, which is everything needed to print counterfeits on the account. In FinCEN's review, using stolen cheques to make counterfeits was the second most common outcome, at 26 per cent. Washed cheques and their images are sold on through encrypted messaging channels and dark web marketplaces, so the person who steals a cheque is often not the person who cashes it.

**Signing it.** The simplest approach needs no chemistry at all. The fraudster forges the account holder's signature on a stolen blank or part-written cheque, or forges an endorsement so that it looks as though the payee signed it over. FinCEN put fraudulently signed cheques at 20 per cent of the reports it reviewed, and in the UK forgery is now the largest category of cheque fraud by case count.

**Cashing it.** The cheque then has to be paid into an account the fraudster controls. Usually that means a money mule's account or one opened for the purpose, sometimes with a fraudulent cheque as the opening deposit. In the Federal Reserve's report, cheque-related fraud was the single most common way banks found out that an account was being used by a mule, cited by 41 per cent of institutions. About half of institutions only discovered mule activity after losses had already occurred.

## What the numbers do and don't tell you

These sources measure different things and shouldn't be added together. UK Finance reports money actually lost and cases confirmed by its members. The Federal Reserve and AFP figures are shares of institutions or companies reporting a problem, not amounts of money, and the Fed puts its own margin of error at plus or minus six points. FinCEN's reports count suspicions, including attempts that failed.

With that caveat, two patterns are consistent across all of them. Attempts are holding up even where losses fall, which says something about how hard banks are working to stand still. And the weight of the problem is moving away from fake paper and towards genuine cheques used by the wrong person.

That second shift matters for how banks defend themselves. Positive pay, where a business tells its bank which cheques it has issued, stops cheques the business never wrote, and it catches many altered amounts. Image analysis catches washing and poor counterfeits. Neither is designed to answer the question a forged cheque poses, which is whether the person who signed it is the account holder. In the UK that question now sits behind nearly half of all cheque fraud cases.

> If you still pay by cheque, write in indelible black ink, such as a gel pen, which is much harder to wash, post cheques inside a post office rather than in a street box, and keep blank chequebooks locked away. If your bank offers positive pay or cheque alerts, turn them on.

## Checking the signature

Checking a signature against the account holder's specimen is one of the oldest controls in banking, and one of the least consistent. It depends on who is looking, how many cheques they have to get through and how good the specimen on file is. A process that worked when cheques were the main way to pay is under strain now that the cheques that do arrive are disproportionately the dangerous ones.

[Unforged Nib](https://unforged.ai/nib/product) is a signature verification API built for that check. It compares the signature on a cheque image with the person's own reference signatures and returns one of six verdicts, with reasons a reviewer or an auditor can read. A failed check always goes to a person; it is never an automatic rejection.

Try Nib on your own documents: [Start free](https://unforged.ai/signup)

## Sources

- UK Finance, [Annual Fraud Report 2026](https://www.ukfinance.org.uk/system/files/2026-06/UK%20Finance%20Fraud%20Report%202026.pdf), covering 2025
- Federal Reserve Financial Services, [2026 Risk Officer Report](https://www.frbservices.org/binaries/content/assets/crsocms/news/research/2026-risk-officer-survey.pdf)
- Association for Financial Professionals, [2026 payments fraud and control report](https://www.financialprofessionals.org/about/learn-more/press-releases/Details/over-75-percent-of-us-firms-experienced-payments-fraud-in-2025-while-ai-adoption-for-fraud-mitigation-lags) (press release, 14 April 2026)
- FinCEN, [Alert on nationwide surge in mail theft-related check fraud](https://www.fincen.gov/news/news-releases/fincen-alert-nationwide-surge-mail-theft-related-check-fraud-schemes-targeting), February 2023
- FinCEN, [Mail theft-related check fraud: threat pattern and trend information, February to August 2023](https://www.fincen.gov/system/files/shared/FTA-Check-Fraud-FINAL508.pdf)
- [Executive Order 14247](https://www.govinfo.gov/content/pkg/DCPD-202500396/html/DCPD-202500396.htm), Modernizing Payments To and From America's Bank Account, 25 March 2025