One leaked check, one $40K loss: Why check fraud is the hardest loss to get back
BOM Bank has served Louisiana for more than a century and has grown into a $1.5B commercial-focused bank, most recently acquiring eight branches in East Texas. John Sullivan, AVP and Operations Officer, leads fraud operations with a team of four who also handle error resolution, reconciliations, and other daily operations.
Check fraud is their biggest concern. Visa and ACH disputes follow black-and-white rules and deadlines. With checks, banks end up arguing over whether an item was counterfeit, altered, or fictitious; attorneys get involved, and the funds are rarely recovered. The cost became concrete when a customer called to report a $40,000 check that had cleared their account.
- Check fraud is BOM Bank’s top fraud concern and the hardest loss to recover
- Check disputes become legal battles over counterfeit, altered, and fictitious items
- Growth into new markets and mail theft continue to raise check fraud risk
- A single leaked check led to a $40,000 loss before BOM could act on the warning
Automatic coverage for every customer, with no added workload
After the $40,000 loss, BOM’s senior management moved quickly and chose Unit21 Dark Web Monitoring. The product watches dark web marketplaces for checks carrying 10 possible variations of BOM’s name and logo to ensure comprehensive coverage.
When an alert arrives, the team confirms the check with the customer, restricts the account, and moves the customer to a new account. Then, when the stolen check is presented, it is returned unpaid. Dark Web Monitoring sits upstream of BOM’s check scoring and Positive Pay, adding an early warning layer without adding daily work for a four-person team.
- Senior management moved quickly after the $40K loss
- Every customer’s checks are monitored automatically, with no portal to manage
- Monitoring was tuned to every variation of the bank’s name and logo during setup
- Complements existing check scoring and Positive Pay without adding daily work
“When we get an alert that a check has been leaked on the dark web, we get with the customer and start them on a new account. By the time that check actually tries to come through our bank, the account’s already closed. It never gets debited.”
Paid for itself in six months, and customers noticed
Within six months, Dark Web Monitoring had stopped more than $30,000 in fraudulent checks, recovering BOM’s full investment in Unit21 and then some. Check fraud losses are down this year compared with previous years, and most of what the bank still absorbs is courtesy credits rather than required reimbursements.
The alerts have also strengthened customer relationships. Customers are alarmed at first to hear their check was for sale on the dark web, but once the team showcases the extra protection layer they’re able to provide, customers are grateful. Those customer conversations have led naturally to investment in new products, such as Positive Pay and other account protections. John was impressed enough to recommend Unit21 to his Louisiana Bankers Association peer group.
- $30K+ in fraudulent checks stopped from clearing in 6 months
- Fewer check fraud losses this year than in previous years
- Public entity customers especially grateful for the added protection
- Full investment in Dark Web Monitoring recovered in under six months
- Alerts open conversations about Positive Pay and deepen customer relationships
“We’ve been very pleased with Unit21’s dark web monitoring. It’s helped save losses for our customers, deepen customers' trust in our bank, and even increase customers' investment in the product lines we offer.”