Secure payments are the goal. How to achieve security is the question. With all the press that cybercrime gets, you might assume that paper checks must be more secure. However, paper checks also have their share of risks, and the problems appear to be getting much worse. Here’s a look at payment security in paper checks versus digital payments.
Mail Theft and Check Fraud Surge
When you put a check in the mailbox, you expect it to be delivered to the recipient safely. Sometimes, that doesn’t happen.
Earlier this year, WLOX News did a story on check fraud happening in New Orleans and around the country. According to the report, in one case of fraud, a small business owner sent his secretary to the post office to mail more than 20 checks out the vendors and employees. Later, he got a bank overdraft notice. Someone had stolen one or more checks and cleared out his account.
There’s been a surge in stolen checks, according an article published in The Conversation and written by David Maimon, Associate Professor of Criminal Justice and Criminology at Georgia State University and founder of the Evidence Based Cybersecurity Research Group. Thieves break into mailboxes or use stolen keys to access blue USPS boxes and steal whatever checks they can find. They edit the check details using nail polish remover so that they can deposit or cash the check, often for an amount that is much higher than originally intended.
Often, the person who steals the checks is not the person who commits check fraud. Instead, the checks are sold to buyers who specialize in check fraud. They can also use the information to create fake documents and commit identity theft.
Maimon says his organization saw roughly 1,325 stolen checks for sale each week in October 2021. This is a significant increase from the weekly average of 634 in September and 409 in August. Back in October 2020, he only saw 158 stolen checks in a week.
Maimon’s advice? Find other methods for making payments.
Ransomware Attacks Are Increasing, Too
Mail theft has been increasing, but what about data breaches? Cyberattacks, notably ransomware attacks, have surged. The NCC Group says that ransomware attacks increased by about 93% in 2021.
Many of these attacks don’t just involve the encryption of data, either. PCI Security Standards Council has warned that hackers sometimes publicly release or sell stolen data if the victim does not pay the ransom. It’s estimated the global cyberattacks could hit 37% of all businesses and organizations in 2021, leading to costs of $20 billion.
Data breaches can have causes other than ransomware, as well. Other types of malware can infect point-of-sale system, and breaches can also be the result things like hacking, social engineering schemes or physical access to devices with information.
The Bottom Line
Identity theft is a major problem. According to the Internet Crime Complaint Center (IC3), reports of identity theft surged in 2020:
- 2020: 43,330 reports of identity theft
- 2019: 16,053 reports of identity theft
- 2018: 16,128 reports of identity theft
- 2017: 17,636 reports of identity theft
- 2016: 16,878 reports of identity theft
In 2020, IC3 says that identity theft resulted in losses of more than $219 million, while credit card fraud resulted in losses of more than $129 million and corporate data breaches resulted in losses of more than $128 million. If the widespread reports of check fraud and mail left are any indication, we might see additional increases once the 2021 numbers are available.
Whether they’re using paper checks or digital payments, insurers cannot take safety for granted. The good news is that payment security has made some big advancements in recent years.
There is a Better Solution
At payCloud.io, we offer online payment gateways that are 100% PCI DSS compliant. Also, because the credit card information stays in our secure system without being transmitted to your servers, compliance and security concerns are reduced. Explore payCloud.io’s payment solutions.