It’s the holiday season and with Black Friday and Cyber Monday and the rest of the shopping season approaching, many of us are shopping for that perfect gift for our friends and loved ones. Some of us shop online at Amazon to avoid the crowds, while others prefer the brick-and-mortar stores. Some of us even find the coveted item we’ve been searching for on eBay, Facebook Marketplace, Etsy, Poshmark, or thousands of other online shopping sites. In the not-too-distant past, we all carried around checkbooks and used checks for everything from groceries to rent. Some people still do. Many stores in the past didn’t even accept credit cards, due to their hefty fees.
Things have changed quite a bit since the last century. Consumers have written checks less and less often since the mid 90’s, and Americans have overwhelmingly switched from checks to debit and credit cards in the last several decades. ATM machines, debit cards, online banking, and mobile and online payment systems such as Venmo, PayPal, Zelle, Cash App, Apple Pay, and Google Pay have become much more popular.
Americans wrote 3.4 billion checks in 2022; that seems like a lot, but it’s not when you realize that it’s down from nearly 19 billion checks written in 1990. The Federal Reserve also says it has reduced its national check processing centers from 45 to one. Although there are still plenty of checks out there, the trend seems to be pretty clear and likely irreversible. Another reason why checks aren’t being used as much includes policy changes by major retailers. According to CNBC, in July of this year, “Target joined a growing list of retailers, including the Aldi supermarket chain, Whole Foods, Old Navy, and Lululemon, that no longer accept personal checks as payment.” Rest assured however, that The Farr Law Firm still accepts paper checks!
No Surprise — Survey Shows that those 65+ Use Checks the Most, Followed by the 55-64 Age Group
A 2024 survey found that 46 percent of Americans didn’t write even a single check in 2023, and that includes 50 percent or more of people age 25 to 54. “While the practice might be dwindling,” CNBC noted that “many Americans in the 55 and over age group still write a few checks a month — with 15 percent in the 55 to 64 age group and 22 percent in the 65+ age group reporting this.”
Why Consumers are Reconsidering Using Paper Checks
Besides less stores accepting checks and many more options for payment, another major reason to stop relying on paper checks is that check fraud tied to mail theft and check washing is up nationwide. When checks are lost or stolen, they can of course be used to steal money from your checking account. Check washing is a type of fraud that involves intercepting a signed check and altering it to steal money from your bank account. Check washing criminals use chemicals like bleach or acetone to remove ink from a check, then rewrite it with new information, typically changing the payee and the amount. And these are far from the only downsides of paper checks. Other drawbacks include the fact that nowadays “banks typically charge extra for paper checks,” and “paper checks may take two days or more to clear,” said Experian. Your recipient may also have a harder time actually getting the money, as those “without bank accounts may have to pay fees to cash a check.” Lastly, while writing a check is not all that difficult, it is certainly more tedious and can take longer than some of the other alternatives now available. The responsibility also falls on you to keep records, rather than automatically having an electronic paper trail.
What are Ways to Send or Exchange Money Instead of Writing a Check?
If you have long relied on paper checks, whether to gift money at the holidays, pay a contractor, or for other reasons, you may not have considered how else to make those payments. The following are some popular ways to do so:
Peer-to-peer payment apps: This category includes options such as PayPal, Venmo, Cash App, and Zelle, all of which allow you to pay businesses and individuals from a linked bank account or credit card. It is possible to send and receive payments instantly, by transferring funds from the app to your linked account. However, in some cases, it may take a few days unless you pay a fee.
Wire transfers: Available through your bank, wire transfers can be a great way to deliver large amounts ($10,000 or more) from one bank to another within hours or minutes. A wire transfer can be a good option for a house closing, car purchases, and sending money to friends and family overseas. Keep in mind that there are fees involved for this option.
Cashier’s checks: While still technically a check, cashier’s checks are a much safer bet than the standard personal check. Cashier’s checks are typically issued by a bank or credit union to a third party, usually on behalf of a bank customer who pays the bank the face value of the check. However, because the check is backed by the bank’s funds, there is no risk of the check bouncing. For the most part, cashier’s checks are used for major transactions. They typically clear by the following business day, but they may involve a small fee.
How to Avoid Fraud if You Are Still Writing Checks
There’s been a dramatic increase in check fraud over the last several years. According to the Financial Crimes Enforcement Network (FinCEN), the annual volume of check fraud jumped by 84% to $815 million in the U.S. in 2022.
One of the most common tactics driving this rise in check fraud is mail theft. Fraudsters are stealing mail, looking for checks, then selling these checks to criminal check washers – often on the dark web. FinCEN issued an alert earlier this year, warning about a nationwide surge in mail theft related check fraud schemes.
There are things you can do to protect yourself from check fraud. If you’re still writing checks, it is recommended to:
- Use a black gel pen rather than a regular ink one, as this can help thwart those nefarious check washers.
- Be sure to keep no more cash than necessary in your checking account, just in case.
- Take precautions and mail your envelopes from inside the post office rather than at a mailbox.
- See if your bank offers a bill pay service. Using this service will mean that the payment information will be printed onto a check, which makes it more difficult for a scammer to remove the information compared to a hand-written personal check.
- Don’t share or post your bank account information anywhere publicly, and never share account information with anyone with whom you did not initiate the communication. Do not allow websites to save your routing/transit and account number information.
Planning to Protect Loved Ones
Protecting seniors from scams, such as check fraud, is very important, which is why we continually share information about how you can protect yourself. It is also very important to plan for your future and for your loved ones. As we approach Thanksgiving and the holidays, if you have not done Incapacity Planning, Estate Planning, or Long-Term Care Planning, or if you have a loved one who is nearing the need for long-term care or already receiving long-term care, please contact us to make an appointment:
Northern Virginia Elder Law: 703-691-1888
Fredericksburg Elder Care: 540-479-1435
Rockville, MD Estate Planning: 301-519-8041
Annapolis, MD Long-Term Care Planning: 410-372-4444
Washington, DC Medicaid Asset Protection: 202-587-2797
About Evan H Farr, CELA, CAP
