NEEDHAM, Mass. – Financial institutions are spending more and more to prevent check fraud but the losses continue to mount, according to a new study by TowerGroup. Check fraud – including kiting, identity fraud, NSF and closed accounts and forgeries – are expected to cost U.S. commercial banks about $853 million in 2003, up from $512 million in 1997, the financial services analyst firm said in a new report. That's despite spending of about $280 million a year this year to prevent such losses. The great bulk of that spending is at institutions of $5 billion in assets or more, whose exposure to such fraud justifies the investment in fraud-prevention technologies, says study author David Medeiros. The combination of better identification and verification technologies and lower check-writing volume should start to ease the losses, Medeiros observes. But, he adds, improving techniques for check forgeries and counterfeits will continue to help make that kind of loss outstrip losses from such payment methods as high-value electronic funds transfers, which "represent a far greater portion of the total payment mix."