E-Check fraud is a growing concern for businesses handling high volumes of digital payments. In 2024, 63% of organizations reported falling victim to check-based fraud, making it the most common form of payment fraud across enterprises.

E-checks are particularly risky because bad actors can easily exploit exposed banking details and manipulate payment processes without immediate detection. As fraud tactics become more sophisticated, the financial and operational fallout grows harder to contain.

This article explains the key dangers of eCheck fraud, why businesses are increasingly targeted, and how to stay ahead of the risk.

TL;DR:

• Large losses without bank protection: Victims can be held responsible for bounced eChecks and associated fees, even when unknowingly depositing fake checks.

• Common fraud types include overpayment schemes, fake donations, and counterfeit checks via email, all designed to exploit the delay in fund verification.

• Seemingly cleared funds can vanish: Banks may temporarily make funds available, but once the eCheck bounces, account holders are left with charges, negative balances, and possibly frozen accounts.

• Red flags from real users on Reddit include unexpected eCheck payments, urgent requests to refund overpayments, and “fake check” scams.

• Strong prevention measures matter: Use strategies like Positive Pay, ACH filtering, encryption, MFA, and transaction alerts to reduce vulnerabilities

Growing Risk in E-Check Payments

E-checks are digital versions of paper checks that allow businesses to transfer funds using account and routing numbers. While efficient, this method introduces risks that are often overlooked. E-check fraud involves the unauthorized use of banking credentials to process payments, often through forged or manipulated transactions.

Fraudsters take advantage of limited real-time verification in eCheck systems. Common tactics include:

• Phishing emails that trick employees into sharing login credentials or payment details

• Uploading counterfeit checks through online billing or payment platforms

• Modifying payment files to redirect funds to unauthorized accounts

• Using stolen account and routing numbers to create fake but valid-looking transactions

How Banking Information Gets Exposed

ECheck transactions rely on just two key details: your bank account number and routing number. Unlike credit cards or tokenized payment systems, these static identifiers don’t change often, and once exposed, they give fraudsters a direct path to initiate unauthorized withdrawals.

Attackers don’t always need sophisticated tools to access this data. Common exposure points include:

• Invoices or emailed payment instructions that list full bank details

• Supplier portals and shared spreadsheets with stored payment data

• Phishing schemes that impersonate trusted vendors or internal finance staff

• Data breaches that leak financial records from third-party platforms

Since these credentials aren’t easily replaced, a single leak can result in repeated fraud attempts. Without strong monitoring and access controls, exposed banking data becomes an easy target, especially when fraudsters know it often goes unnoticed until after funds are withdrawn.

Financial controls alone fall short here. Fortifai can help organizations monitor real-time exposure points, flagging unusual access patterns or repeated use of sensitive account details before fraud occurs.

The Challenge of Spotting Counterfeit Checks

Counterfeit eChecks are forged to closely resemble legitimate transactions, often down to bank logos, routing numbers, and digital signatures. Because e-check systems don’t include built-in verification layers like multi-factor authentication or transaction tokens, these fakes can pass through payment workflows unnoticed. The result is unauthorized withdrawals that may only be caught during delayed reconciliations or audits.

Fraudsters commonly use the following techniques to create convincing counterfeit eChecks:

• Copying check formats and branding from real vendor or client payments

• Using valid routing numbers and stolen account details to build fake but functional checks

• Inserting fraudulent checks into invoice workflows or online payment portals

• Sending altered eChecks via email with spoofed sender information

• Leveraging check-scanning software to replicate MICR line data for submission

Without real-time validation, even experienced finance teams may miss subtle discrepancies. Fortifai helps detect these anomalies early by learning your organization’s standard transaction patterns and flagging anything that doesn’t fit, so you’re not relying on hindsight to catch fraud.

Why are Fraudulent Checks Clear Undetected?

Unlike card payments, eChecks often clear based on trust, not real-time authentication. Once a fraudulent eCheck is submitted, the transaction may settle within one to two business days before any internal review process flags suspicious activity. For finance teams managing high transaction volumes, this creates a blind spot where bad payments can slip through undetected.

Fraudsters exploit this lag by:

• Timing fraudulent checks during weekends or holidays when reconciliation is delayed

• Submitting small-value transactions to avoid triggering manual reviews

• Using known vendor or customer names to bypass initial scrutiny

• Manipulating payment files or batch uploads to bury fraudulent entries

• Exploiting approval fatigue in teams reviewing high volumes of similar payments

Once funds clear, recovery becomes difficult. Fortifai addresses this risk by detecting real-time anomalies using AI-driven thresholds and behavior analysis to flag irregular patterns before payments are finalized. This helps you shorten your response time and prevent loss before it happens.

Common Tactics Used in E-check Scams

Instead of attacking technical infrastructure, fraudsters often exploit human error, weak processes, or gaps in verification. These scams can originate from fake vendors, spoofed internal accounts, or even seemingly legitimate customers. Once processed, the fraudulent eChecks can clear before anyone realizes the mistake, especially in high-volume payment environments.

Here are some of the most common tactics used:

• Overpayment Scams: The scammer sends an eCheck for more than the owed amount, then requests a refund for the excess, before the original payment bounces.

• Fake Vendor Invoices: Fraudulent eChecks are attached to phony invoices that appear to come from real suppliers, exploiting approval workflows.

• Mystery Shopper or Prize Scams: Victims are told to deposit an eCheck and return a portion via another payment method, only to have the original eCheck bounce later.

• Donation or Refund Schemes: Nonprofits or service providers receive fake eChecks with a follow-up request for urgent refunds.

• Business Email Compromise (BEC): Attackers pose as internal stakeholders or executives and instruct finance teams to process urgent eCheck payments.

Each of these tactics relies on a delay between submission and detection. Fortifai helps close that gap with automated risk scenario detection and configurable alerts, so high-risk transactions are flagged before funds are released.

How Phishing and Malware Enable Fraud

Cybercriminals use targeted emails, fake login pages, or malicious links to trick employees into revealing sensitive banking details or downloading spyware. Once access is gained, attackers can initiate or modify eCheck transactions without detection.

Common exploitation methods include:

• Phishing emails that mimic vendors, banks, or internal departments to harvest login credentials

• Keyloggers and spyware that silently capture account and routing numbers from devices

• Fake payment portals that are designed to look like legitimate financial systems

• Credential stuffing attacks using breached passwords to access payment tools

• Remote access tools (RATs) that let fraudsters control systems and upload fraudulent checks directly

These tactics are often successful because they exploit trust, urgency, and routine behavior. In high-transaction environments, a single compromised account can be enough to initiate multiple unauthorized eCheck payments before anyone realizes something’s wrong.

The Cost of Delayed Fraud Detection

One of the biggest vulnerabilities in this payment method is the lag between eCheck submission and detection. Because eChecks often clear within 24–48 hours, fraudulent transactions can be processed, settled, and withdrawn before any manual reconciliation or review flags the issue.

This delay can lead to:

• Irrecoverable financial losses, especially if funds are moved across multiple accounts

• Operational disruption, as finance teams scramble to investigate and respond

• Vendor or customer trust issues, when payments are reversed or questioned

• Regulatory complications, particularly if the fraud involves cross-border payments or sensitive sectors

• Internal resource strain, as investigators and auditors are pulled into reactive workflows

Even short delays in fraud detection can cause long-term damage in environments with high transaction volumes or limited staffing.

Businesses Most Vulnerable to ECheck Fraud

Fraudsters often target organizations with limited internal controls, frequent transactions, or stretched-thin payment teams. Here’s how different business profiles become vulnerable:

• Small businesses may lack dedicated fraud teams or layered approval processes, making them easier to exploit.

• Mid-size companies often manage rising transaction volumes without fully scaled controls, creating blind spots that fraudsters can slip through.

• High-volume businesses, such as retailers or service aggregators, process hundreds of payments daily, making manual checks impractical and increasing the chances of a fraudulent eCheck clearing unnoticed.

Industries like manufacturing, logistics, healthcare, and professional services are frequent targets because they regularly issue or receive large payments via eCheck. When transaction speed is prioritized over validation, the risk of fraud rises, especially for businesses without real-time safeguards.

Consequences Go Beyond Financial Loss

When eCheck fraud goes undetected, the damage doesn’t stop at the ledger. For many organizations, the downstream impact can be far more challenging to repair than the financial loss itself.

• Reputational Damage: Clients, vendors, and partners may lose trust in your internal controls, especially if payments are reversed or delayed due to fraud. This can harm long-term relationships and future business opportunities.

• Regulatory Exposure: For industries under financial, ESG, or data governance scrutiny, fraud incidents can trigger mandatory reporting, audits, and penalties. The lack of defensible investigation records or delayed disclosures can worsen compliance risks.

• Operational Strain: Finance, legal, and compliance teams may be pulled into weeks of reactive investigation, slowing core operations and impacting team productivity.

You can also check our blog, Generative AI for Fraud Detection.

Proactive Measures to Prevent E-Check Fraud

Stopping eCheck fraud before it causes damage requires more than occasional audits or employee training. It demands continuous visibility into payment activity, real-time anomaly detection, and structured response mechanisms.

Fortifai brings all of this into one platform so your fraud prevention strategy isn't reactive, it's built-in.

• Automated alerts notify you the moment a transaction deviates from expected behavior

• Case workflows allow you to investigate, escalate, and document incidents without delay

• Real-time dashboards give you a clear view of risk across vendors, departments, and transaction types

• Continuous learning improves detection accuracy over time, reducing false positives and missed signals

Fortifai helps you move from fragmented monitoring to a unified, proactive fraud defense. With scalable controls, defensible reporting, and AI-driven insights, your team can catch threats early and act before they escalate.

Best Practices to Strengthen Internal Controls

While fraud prevention tools are critical, strong internal controls remain foundational. Businesses can reduce eCheck fraud risk by:

• Enabling Positive Pay, where only pre-approved checks clear

• Segregating accounts for different payment types to limit exposure

• Setting threshold-based alerts for unusual payment values or vendors

• Automating reconciliation to catch mismatches as soon as transactions post

When these practices are combined with real-time monitoring solutions like Fortifai, your risk posture strengthens significantly, helping prevent issues before they escalate.

What to Do If You’re Targeted

Quick action can limit damage and support recovery when eCheck fraud occurs. Key steps include:

• Placing an immediate hold or bounce request with your bank if a suspicious transaction is spotted

• Reporting the fraud to both your bank and local law enforcement promptly

• Reviewing your insurance coverage to understand what protections apply

• Documenting the incident thoroughly, using audit trails and investigation records for future compliance or claims

With Fortifai’s audit-ready workflows, your team is equipped to respond quickly, while preserving critical evidence for internal review and regulatory reporting.

Conclusion

You don’t get a second chance to stop fraud that’s already cleared. However, the challenge lies in catching suspicious activity before it costs you time, money, or trust.

That requires more than manual reviews or reactive controls. It requires a system that understands what “normal” looks like in your business, flags what doesn’t, and equips your team to respond immediately.

Fortifai gives you that system. With AI-driven detection, real-time alerts, structured case management, and audit-ready reporting, Fortifai helps you stop fraudulent eCheck activity before it settles and gives your finance, risk, and compliance teams the tools to act quickly and clearly.

Wish to take fraud prevention from reactive to proactive? Let’s talk about how Fortifai can help.

FAQs

Q1. What is an e-check?
A1: An e-check is a digital equivalent of a paper check, transmitted electronically over the ACH network using routing and account numbers. It provides a fast and eco-friendly alternative to traditional checks, with settlement typically occurring in 2–3 business days.

Q2. Why are e-checks vulnerable to fraud?
A2: E-checks rely on static credentials and lack real‑time authentication. Once account information is exposed, it can be used repeatedly for unauthorized transactions, often before the fraud is detected.

Q3. What are the most common eCheck scam tactics?
A3: Common scams include:

• Overpayment schemes with refund requests

• Fake vendor invoices

• Prize or mystery‑shopper checks

• Business email compromise, where attackers pose as internal staff

Q4. What should businesses do if they receive a suspicious eCheck?
A4: Take immediate action:

• Place a hold or bounce the check with your bank

• Report it to your financial institution and local law enforcement

• Document the incident and preserve records for audits or claims

These steps help limit losses, support investigations, and protect your organization.

Q5. How does Fortifai help prevent eCheck fraud?
A5: Fortifai detects suspicious eCheck activity in real time using AI-driven anomaly detection. It monitors transaction patterns, flags deviations from normal behavior, and alerts your team before processing fraudulent payments. With built-in case management, automated workflows, and audit-ready trails, Fortifai helps you act quickly, reducing loss, exposure, and recovery time.