Why You Should Stop Writing Checks Now | Firstrust Bank (2024)

FAQs

Why You Should Stop Writing Checks Now | Firstrust Bank? ›

A lost or stolen checkbook is a treasure trove for criminals. With access to your account number and personal information, they can easily forge checks and conduct transactions in your name. While banks do their best to flag and prevent unauthorized transactions, you may still suffer significant financial loss.

Criminals may replace the "payee" and often the dollar amount to fuel the fraud. And fraudsters can copy and print multiple washed checks for future use or to sell to other criminals. The $150 check you wrote could end up being written by crooks for several hundred dollars or more.

With 84% of all U.S. households owning a computer,² we're no longer fumbling to find an envelope and stamp. Paying online is faster and cheaper than writing a check. Businesses and utilities encourage online and automatic payments, which increase the availability and use of such options.

Checks Are Easily Stolen and Altered

Checks can be intercepted from the mail and the victim may not realize there is fraud until it's too late, causing financial losses and even increasing the chances of identity theft. One way to protect against check fraud is by using Positive Pay.

Surprisingly, though, 50 percent of businesses still use paper checks as their primary method of payment. According to the Federal Reserve Bank of Philadelphia, paper checks are predicted to become obsolete by 2026. Given the advantages of electronic bill payment, why are paper checks still so common for businesses?

The article cites the Philadelphia Fed Study, which found that since 2009, paper checks have been dropping by 1.2 billion annually. If the reduction of paper checks continues at this rate, the projected date at which paper checks will no longer be used would be some time in 2026, just over a decade from now.

Although you can pay from your checking account without paper checks, they can be useful in situations such as gifting money, paying companies that don't accept card or digital payments, or making a purchase without your debit card.

Millennials are still using traditional forms of payments like cash and checks because they remain as convenient and secure as other forms of payment. Checks are not a foreign concept to most millennials and below are three reasons why this demographic is still using the checks to accommodate their lifestyle.

46% of Americans Didn't Write a Check in 2023

While writing checks may be less popular than it used to be, 54% of Americans still wrote a check in the past year.

One factor is age: A survey by the Atlanta Federal Reserve Bank from October 2022 found that while 52.3% of people aged 45 to 64 write checks regularly, only 8.6% of those under 24 are regular check writers, as are a third of those between ages 25 and 45.

What is a disadvantage of writing a check? ›

Disadvantages Of Using Paper Checks

Additionally, checks can be lost or stolen, leading to delays or potential fraud. Another disadvantage of paper checks is the security risks. Personal and bank account information is printed on the check, making it easier for fraudsters to access sensitive information.

Void the check in the bank register under these circ*mstances: The physical check is ruined. The physical check is not ruined, but is incorrect and needs to be reprinted. For example, if it is written to the wrong vendor or for the wrong amount, or if it is returned by a vendor for a replacement check.

The short answer: Real damage. The combination of a bank account and routing number is a dangerous combo that scammers want. And those two numbers are fairly accessible. Think about how often these numbers get circulated: every time a check is written, cashed, signed over to someone else.

There are several digital alternatives to paper checks, including: ACH payments (or eCheck payment) Credit card payments. Virtual cards — credit card numbers that aren't tied to a physical credit card.

Automatic Bill Pay Took Countless Checks out of Circulation

Although the money still leaves your checking account, the rise of automatic payments removed the ick from the monthly chore of paying bills. Even better, the Pymnts study showed that those enrolled in autopay were more likely to pay on time.

The U.S. Postal Service is vulnerable, and thieves who can access your checks can change the amount and ferret those funds right out of your bank account. And then it can take weeks to get the funds back.

Generally, stop payments are used in cases when the account holder does not want the check to be paid for various reasons. Some of the reasons include stolen or lost checks, forged checks, insufficient funds to cover the check amount, or a dispute between the depositor and the party that was given the check.

The U.S. Postal Service is vulnerable, and thieves who can access your checks can change the amount and ferret those funds right out of your bank account. Are you writing payments to medical providers and insurance companies and sending them in the mail?

While many banks have moved to digital formats for canceled checks, if you have physical copies or reprints from your bank, shred them. They contain a lot of personally identifiable information that could put you at risk. Stop those canceled checks from posing a risk by having them shredded.