Earlier this month, a technical loophole at Chase Bank allowed fraudsters to deposit fake checks through ATMs and mobile apps, withdrawing money before verification. This "Chase glitch" went viral, showing just how easy it was to exploit the system.

This wasn’t an isolated incident—it’s part of a bigger wave. Check fraud jumped 84% from 2021 to 2022.

Paper checks, long seen as a reliable option, are becoming high-risk. Fraudsters are exploiting the time lag in verification, causing banks like Chase and Fidelity to scramble. Businesses relying on checks could be exposed to serious financial losses.

Check Fraud Is Exploding

Check fraud isn’t a glitch—it’s a trend. Criminals are getting more sophisticated, using fake or altered checks and moving faster than banks can process. For example, one bank recently reported $135 million in check fraud losses. Paper checks are slow to clear, making them easy targets for exploitation, especially in the digital age where real-time payments are standard.

How it affects your business

If you’re still accepting paper checks, you’re playing with fire. The risk of fraud is increasing, and banks aren’t always quick to catch these scams. It’s time to reconsider your payment options and think about how to protect your business.

What you can do

• Go Digital: Switch to secure payment methods like ACH transfers. They’re faster and come with stricter verification protocols. Tools like Nickel can help you automate ACH payments and process them for free
• Review Your Policies: Consider holding shipments until checks clear, or require certified checks for large transactions.
• Educate Your Team: Make sure your employees know what to look for when it comes to suspicious checks.

It’s time to move on from checks

With check fraud on the rise, the Chase glitch is a wake-up call for small businesses. Paper checks may feel familiar, but they’re becoming a bigger liability. Moving to digital payments could save you from dealing with fraud—and protect your bottom line.