Check kiting is often underestimated and viewed as a low-tech fraud that shouldn't pose a serious threat in a system built on real-time payments and automated controls. Yet one core vulnerability remains: float time.
That brief window between depositing a check and clearing the funds provides fraudsters with an opportunity to exploit the system.
This guide explains how check kiting fraud operates, why it persists, and the practical steps banks can take to detect and prevent it.
Check kiting is a form of check fraud that exploits the "float" – the time it takes a deposit to clear. During that window, fraudsters tap into funds that don't actually exist, temporarily inflating an account balance so that checks clear when they otherwise would bounce.
Example: In 2025, a man from Connecticut used nearly 200 bank accounts to deposit bad checks and quickly withdraw funds before they cleared, defrauding banks of $350,000. Authorities charged him and six co-conspirators with multiple felonies.
Here's a step-by-step example of a classic kiting cycle:
Check kiting takes many forms, each exploiting different systems:
It's easy to assume that real-time banking would put a stop to check kiting cold.
Here's why this form of fraud remains effective:
Regulation CC requires banks to make deposited funds available quickly, often by the next business day. However, actual settlement from the paying bank can take longer.
That delay (even a day or two) is the window kiting needs.
Many banks allow immediate access to deposited checks via mobile apps, branch scanning, or remote systems.
Meanwhile, returned checks (due to insufficient funds or fraud) can take several days to process. Fraudsters take advantage of that time gap to drain accounts before anyone notices.
With remote deposit capture and mobile apps, fraudsters can deposit checks from anywhere – no teller or branch interaction required.
Some criminals even deposit the same check multiple times using different channels. The original paper check often disappears, reducing the chance of tracing it.
Today's kiting schemes often involve more than just checks.
Fraudsters use ACH transfers, wire payments, prepaid cards, and even peer-to-peer apps to move funds and complicate tracking quickly.
While consumers may rely less on checks, many businesses still use them, leaving the door open for future use.
Most banks only monitor account behavior within their institution.
If a fraudster moves money across three or four banks, no single bank sees the whole picture.
Without a consortium-level view or coordinated reporting (like SARs), check kiting can continue unchecked until the system finally catches up.
Skilled criminals don't make reckless overdrafts.
They keep account balances slightly positive, use realistic-looking amounts, and mimic payroll or vendor payments to avoid suspicion.
These behaviors blend in with typical business activity, making it hard for traditional rule-based systems to detect a problem until it's too late.
To prevent check kiting, banks must blend policy, technology, and vigilance. Here are key strategies:
Don't treat all check deposits the same. Set hold durations based on account history, customer risk level, and deposit behavior.
For example, apply longer holds on large checks, third-party deposits, or new accounts with little transaction history.
VALID's InteliFUNDS utilizes real-time scoring to assess every check deposit, considering behavioral signals, check metadata, and account risk. It approves over 99% of deposits instantly while applying automated holds to the highest-risk 1% based on intelligent decisions.
Implement limits on automated withdrawals or transfers that account for recent transactions, such as deposits and withdrawals, to prevent excessive use.
For instance, a system might block a withdrawal from check-deposited funds on the same day. Or it could cap the total daily cash withdrawal or transfer amount.
VALID's InstantFUNDS adapts withdrawal and transfers access based on real-time behavioral risk. It considers deposit timing, account profile, and transaction history to apply dynamic limits.
Kiting doesn't always trigger immediate red flags. The fraud often unfolds as a sequence of seemingly routine actions.
Behavioral analytics helps identify those patterns early.
VALID's Real-Time Loss Alerts (RTLA) detect behavioral loops and timing anomalies across deposits and withdrawals. When it identifies a suspicious sequence, such as rapid deposits followed by immediate withdrawals, it alerts teams before the scheme causes a loss, allowing for timely intervention even mid-cycle.
Every account has a rhythm. When an account starts behaving in ways that don't fit its history, it's often a sign of manipulation.
Profiling expected behavior makes it easier to spot outliers and intervene early.
Monitor ACH and wire flows for related activity. Kiting schemes sometimes use non-check payments to transfer money.
A unified dashboard that correlates checks, ACH, wire, and ATM transactions helps catch such tactics.
Fraud rarely stays in one place.
Many kiting schemes span multiple banks, especially when fraudsters open dozens of accounts. Without shared insight, banks are flying blind.
Train tellers and fraud analysts to recognize kiting red flags.
From tellers to fraud analysts, your team is a key line of defense. When staff know what to look for and how to escalate, response times improve dramatically.
For high-risk accounts, verify identification when processing high-dollar check cash-outs.
If a customer writes multiple checks from another bank and attempts to cash them, a teller or system may require identification.
Traditional check fraud controls can't keep up with today's fraud pace.
Kiting schemes move quickly and frequently change tactics.
Real-time systems that learn and adapt are now essential for effective defense.
For institutions under pressure to deliver faster funds availability while managing fraud exposure, VALID Systems offers a purpose-built, real-time solution that stops check kiting fraud before losses occur.
Here's how VALID shuts it down:
VALID's InteliFUNDS and InstantFUNDS score every check at the moment of deposit – across teller, ATM, mobile, and RDC channels. They instantly clear low-risk items and hold or escalate high-risk ones, shutting down the float window that kiting schemes rely on.
VALID uses behavioral analytics and machine learning to learn standard transaction patterns across accounts continuously and then flag deviations like rapid deposit cycles, inconsistent check origins, or interlinked accounts.
With Real-Time Loss Alerts (RTLA), VALID surfaces actionable threats at the moment of risk, not hours or days later. In testing, it identified 75 %+ of likely kiting cases at deposit time, drastically reducing loss exposure and response delays.
VALID's platform benefits from shared fraud intelligence across its banking partners. This network effect helps institutions detect coordinated kiting rings that would otherwise evade siloed detection.
Ready to explore proactive check fraud defense tailored to your bank?
Schedule a free consultation with VALID Systems and prevent check kiting in real time, not after the loss.