PYMNTS MonitorEdge May 2024

Verification Firm Mitek Debuts MiControl as Check Fraud Triples Since 2018

Digital payments may be growing in popularity, but the use of paper checks persists.

So too does check fraud, which reached record levels in 2023. With that in mind, identity verification firm Mitek has introduced MiControl, a fraud management console that works with the company’s Check Fraud Defender. 

“Despite the increasing use of digital payment options among banking customers, financial institutions worldwide still process billions of checks each year, and the rate of check fraud continues to climb,” the company said in a Thursday (Feb. 15) news release.

The release cited data from the Financial Crimes Enforcement Network (FinCEN) showing that suspicious activity reports for check fraud at depository institutions more than tripled between 2018 and 2022, climbing 201.2% during those years. 

“Between January and October of 2023, 447,525 suspicious activity reports (SAR) indicated another record setting year for check fraud,” the release added. 

According to the release, MiControl uses “advanced visualizations and overlays” that — when coupled with business rules configured by the bank or financial institution — can reduce the time it takes for a fraud analyst to review and make a determination about a suspicious check from up to 10 minutes to roughly 90 seconds. 

Mitek added that MiControl also helps banks analyze and visualize fraud trends and hot spots, such as geographies or types of businesses that are suffering from higher levels of fraud. 

“This analysis allows financial institutions to adjust their fraud detection protocols and business rules accordingly,” the release said.

As PYMNTS wrote last year in a report on the persistence of checks, accounts payable (AP) and accounts receivable (AR) departments are in many cases a first line of defense against fraud, with paper-based processes presenting a much greater risk of unwittingly allowing bad actors inside.

“Let’s be honest, [legacy processes are] candidly way more susceptible to fraud than electronic AP solutions, Ernest Rolfson, CEO and founder of Finexio, told PYMNTS in an interview posted last June. However, even Rolfson said that “checks are going to continue to die the slowest death.”

So why is it taking so long for companies to go fully electronic? It might be that businesses haven’t yet recognized the problem. 

“People are not saying, ‘Our biggest problem is paper checks’ — that is not currently in the debate… The general managers, decision makers, these folks are usually within a few years of their retirement, and they don’t want a lot of change because they want to finish out and let somebody else take on the next effort,” Jake Joraanstad, CEO at Bushel, told PYMNTS in August.