Receiving a check from the U.S. Treasury is sure to bring a smile to any American’s face; seeing the Statue of Liberty tower over the bluish-yellow paper sky means that more money will soon be in their pocket. Or maybe a fraudster’s pocket, since Treasury checks are criminals’ number one target for counterfeiting. Luckily, Mitek Check Fraud Defender is detecting more fake Treasury checks in real-time, at the moment of deposit.
Let’s dive in to see why fraudulent Treasury checks are more challenging to spot than their bank check brethren, and how Check Fraud Defender features purpose-built for Treasury checks offer superior, “Day Zero” protection.
Treasury check fraud 101
First and foremost, fraudsters love fake Treasury checks because they are considered guaranteed funds draw against the U.S. government; banks and credit unions must make the deposited funds available the next business day whether the check has cleared or not. Treasury checks can also be exchanged for currency at retail U.S. Post Offices and check cashing stores, which may not have sophisticated check fraud detection technology deployed at the point of sale.
Because so many Treasury checks are issued, it’s easier for fraudsters’ handiwork to avoid scrutiny. In 2024 the Federal Reserve processed 36 million government checks valued at $1.75 trillion, most of which are issued by the U.S. Treasury. While these checks are difficult to wash because they feature bleeding ink, they are easy to reasonably reproduce on a good high-resolution printer. A missing physical watermark or ultraviolet overprinting on a fake Treasury check might not be noticed in a busy branch or by rudimentary mobile deposit image capture software.
But sophisticated printers allow fraudsters to mimic the many of the unique features found on the newest versions of Treasury checks, such as the corner QR code and basket weave pattern that surrounds the signature on some types, microprinting, mail barcode, and more. These counterfeit checks slip more easily into the legitimate banking system.
Mitek’s Day Zero solution to stop Treasury check fraud
Mitek has built enhanced artificial intelligence (AI) analytics into Check Fraud Defender to detect anomalies in Treasury checks. Check Fraud Defender extracts multiple types of information, including date of issuance and routing number, from the front and back of Treasury checks, and programmatically compares it to what the check should look like, providing pinpoint insight into which elements do not. (For example, Treasury checks are valid for only one year and use a different routing number format than the U.S. banking system.)
Mitek works closely with financial institutions, industry groups, and regulators, sharing information to stay one step ahead of fraudsters. Importantly, Mitek’s cloud-based Treasury check fraud solution can operate in real-time, offering Day Zero protection. Thanks to real-time connectivity, Check Fraud Defender applies sophisticated AI algorithms at the point of capture to analyze the item against Mitek’s mix of proprietary, consortium and government data. Fake checks that fraudsters are attempting to deposit through their phone, at an ATM or at a teller’s window can be identified immediately and stopped in the moment, hours before post.
Real-time, Day Zero detection is a key Mitek differentiator. Other providers’ solutions are typically deployed on premises and use only proprietary data to analyze Treasury checks for fraud after deposit, on day one or two of the clearing process. But by that time, fraudsters have had ample opportunity to withdraw the funds, leaving the bank with an unmitigated loss.
Mitek-US Bank webinar on February 26
US Bank is a leader in using Mitek solutions to stop check fraud. The bank has integrated Check Fraud Defender with enhanced Treasury check capabilities into teller stations at all 2,200 of its branches across the country. Join me and Steve Gray, US Bank SVP of Fraud Strategy, on a Mitek webinar on February 26 at 1p ET/10a PT. Bring questions to our discussion about:
- Why real-time matters: Protect customer trust by identifying and stopping fraud before it impacts accounts, while navigating the complexities of deposit fraud and evolving threats.
- How to implement a real-time fraud solution: Learn where to start, how to prioritize channels, and make the business case for real-time check fraud detection to maximize impact with minimal disruption.
- Best practices for a holistic fraud approach: Leverage AI, machine learning, and consortium data for comprehensive check fraud prevention, streamline decision-making, and ensure real-time coverage across all channels for on us and transit.
Register today and follow me on LinkedIn.
Register now for the Mitek-US Bank webinar on February 26
About Kerry Cantley - VP, Digital Banking Strategy at Mitek
Kerry Cantley is VP of Digital Banking Strategy at Mitek, leading the strategic expansion of Mitek’s Check Fraud Defender service, which detects forgeries and fraudulent activity across all deposit channels, otherwise missed by traditional fraud prevention protocols.