Check usage, fraud, plague corporations, AFP finds

The federal government may want to do away with checks, but corporations aren’t on the same page. And it shows. According to the 2025 AFP Payments Fraud and Control Survey, checks continue to be the payment method that is the most often used and the most common source of fraud losses.

The Association for Financial Professionals (AFP) has been surveying corporate treasury executives for 21 years about their payment and fraud experiences. This year, 63 percent of treasury professionals participating in the survey said their organizations dealt with check fraud in 2024.

It’s not surprising since checks continue to be the preferred method of payment for organizations, and they are used extensively. Ninety-one percent of treasury executives said their organizations are currently using checks. That’s up from 75 percent in 2023.

Sixty-three percent of corporate executives surveyed experienced attempted or actual check fraud in 2024. While this is down slightly, from 65 percent in 2023, “it is clear that checks remain easy targets for criminals,” the AFP wrote in its report. Despite the high rates of check fraud, a large majority (75 percent) of organizations have no plans to reduce check usage over the next two years, the AFP added.

That’s not the case with the federal government. President Trump signed an executive order on March 25, 2025, mandating that the federal government stop issuing checks for all disbursements, effective Sept. 30. The order applies to tax payments and refunds, benefits, and vendor payments, among other things.

All executive departments and agencies must transition to modern EFT methods like Direct Deposit, debit/credit card payments, digital wallets and real-time transfers. Payments to the federal government – such as fees, fines, loans and taxes – also must be processed electronically.

BEC most persistent form of fraud

When it comes to the commission of fraud, business email compromise (BEC) is the most significant avenue of threat leading to payment fraud, the AFP reported. One method of payment often triggered by BECs is wire transfers. Sixty-three percent of BECs in 2023 resulted in wire transfer frauds. ACH transactions ranked second (50 percent), followed by checks (just 26 percent).

The AFP said BEC scam tactics are changing, though. Incidences of fraudsters impersonating senior directors and directing transfers of funds into fraudsters’ accounts fell eight percentage points, to 49 percent last year. Vendor impersonation, on the other hand, grew slightly, having been experienced by 60 percent of those participating in the survey.

The most frequent type of BEC scam was third-party impersonation; 63 percent of companies were caught up in these type scams. Vendor impersonation saw a slight increase – cited by 60 percent of companies. “This change in tactics is likely due to organizations awareness of such ‘classic’ BEC attempts,” the AFP wrote.

Forged checks were another big problem. Forty-nine percent of organizations reported frauds that involved forged checks and stolen cards.

The AFP found organizations are making inroads when it comes to BEC fraud. Safeguards include filtering messages to intercepting fraudulent emails.

Recoveries down

Among organizations scammed, 22 percent were able to recover 75 percent or more of funds lost to payment fraud last year. This is a sharp decrease from 2023, when 41 percent of organizations were able to recover at least 75 percent of funds lost, the AFP reported.

However, it is “encouraging” that the percentage of organizations that were unable to recover anything at all in 2024 was 20 percent, down from 30 percent in 2023. Fifty eight percent were able to recoup up to 79 percent of their funds in 2023, the AFP found

One encouraging fact: the percentage of organizations that were unable to recover any lost funds in 2024 was 20 percent, down from 30 percent in 2023. Fifty-eight percent were able to recoup up to 75 percent of their funds in 2024, a huge increase over 2023, when just 29 percent were able to do so.

The AFP conducted its survey in January 2025 and based its report on responses from 521 organizations.

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