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V O L . X X I X N O. X X V I I B A N K I N G / F I N A N C E / I N S U R A N C E S ix checks were recently stolen from five cus- tomers of Kennebec Savings Bank — most likely from their mailboxes — and cashed at another bank after fraudsters "washed" away the original payee's signature. at compares to only two stolen checks last year. en there's the case of the mustached man in a blond wig who used his girlfriend's debit card to deposit fake checks at a Kennebec Savings ATM. Caught on a security camera, the big-haired swin- dler looks a bit like Dolly Parton, if not for the mustache and cigarette dangling from his mouth. "e police know who he is, but haven't been able to locate him," says Andrew Silsby, president and CEO of Kennebec Savings Bank. While the Augusta-based bank has prevented more than $222,000 in net losses from check fraud so far this year, the hit to the bottom line exceeds $21,000. at's up from a little more than $5,100 in losses in 2020, and Silsby says his bank is on pace to match last year's losses of close to $61,500 from check fraud. In Maine and elsewhere, banks and credit unions are investing in staff and technology to combat check fraud, which is escalating nation- wide even as people write fewer checks. While not all institutions disclose check fraud's financial impact or their crime-fighting resources, the costs for smaller, regional banks like the ones so preva- lent in Maine are very real. "Community banks, in particular, have faced chal- lenges seeking reimbursement for breach of warranty claims filed with other financial institutions," says Scott Anchin, vice president of senior operational risk and payments policy at the Washington, D.C.- based Independent Community Bankers of America. "As a result, community banks often choose to absorb losses so they can make their customers whole." Fewer checks, more fraud e number of checks processed by the Federal Reserve, which handles about a third of the total, dwin- dled from nearly 19 billion in 1990 to 3.4 billion in 2022, as paying with debit and credit cards and automated clearinghouse transfers became more popular. When people do write checks, they're making payments in higher values, raising the stakes — and perhaps also the temptation — for criminals. In 2022, for example, the average check size was $2,652. at's up from $679 in 1989, or $1,672 in today's dol- lars, Federal Reserve data show. Increasingly, fraudsters are targeting the U.S. Mail and postal carriers, according to a February alert issued by the Financial Crimes Enforcement Network, a bureau of the U.S. Treasury Department. at was especially true during the pandemic, when thieves went after mailed personal checks, business checks, tax refund checks and checks related to government assis- tance programs including Social Security payments and unemployment benefits. Last year, banks reported more than 680,000 check fraud cases to FinCEN, nearly double the previous year's filings. What's driving the crime wave? "It's low-tech and relatively easy to do, there is a booming black market for stolen checks on the internet, and there is still a large pool of people mailing checks that are easy to obtain through mail theft," says Kolt Bell, N O V E M B E R 2 7 , 2 0 2 3 18 P H O T O / J I M N E U G E R F O C U S Andrew Silsby, president and CEO of Kennebec Savings Bank, says his bank has incurred $21,000 in check fraud losses so far this year. Bank robbers come into the bank, but fraudsters try to get paid without coming into the bank. — Andrew Silsby Kennebec Savings Bank No. 2927 November 27, 2023 $ 15 Franklin Street Portland, ME 04101 Keeping fraud in check maine banks combat rising wave of check fraud B y R e n e e C o r d e s S TA R T I N G O N PA G E 1 8 F O C U S B A N K I N G / F I N A N C E / I N S U R A N C E

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