Depository institutions lost $615 million on 529,000 fraudulent checks in 1995, according to a Federal Reserve Board study released Tuesday.

But the Fed noted that less than one check in 100,000 was stolen, altered, kited, forged, or written on a closed account. Institutions did recover $256 million last year from people who wrote bad checks.

Thrifts were hardest hit, with 72% reporting a loss from bad checks; 57% of banks and 53% of credit unions also reported losses, the Fed study found.

The results didn't shock Charlie Paquette, senior executive vice president and chief operating officer at Granite Bank in Keene, N.H.

"I'm surprised it is not 100%," said Mr. Paquette, who chairs the retail banking committee at America's Community Bankers. "I can't imagine there isn't a bank that doesn't charge off at least some money every year."

Mr. Paquette should know. Despite scores of preventive measures, his bank still gets hit by check fraud. One of the more eye- opening cases occurred when a customer developed a rapport with the tellers at one branch by frequently visiting the bank for small withdrawals and deposits. He then used this friendship to cash a bogus $10,000 check.

"People who are very friendly and outgoing use their disarming personalities," Mr. Paquette said. "This is a constant risk."

The Fed survey, which was requested by Congress in 1994, also found that nearly three-quarters of all fraudulent checks were drawn on local banks. Consumers writing checks against their personal accounts were responsible for the bulk of all fraud, the study found. Government checks, money orders, and certified checks were the least likely to be counterfeited.

Banks often guard against fraud by not releasing funds until a check is cleared. But the Fed found problems with this strategy. The Expedited Funds Availability Act requires banks to make local checks available in two days and out-of-town checks in five days. Yet only 48% of local checks and 84% of out-of-town checks are cleared within that time frame.

The Fed last week urged Congress to give banks three days to clear local checks. But the study released this week said just over 40% of banks that suffered check fraud losses would take advantage of an extra day to clear checks.

Instead, bankers said the best way to combat check fraud was to increase communication among banks, train employees to detect fraud, and speed up the check-clearing system.

The study also found that some banks make checks available before the law requires. For example, more than a third credit local checks on the day they are deposited, and 56% credit out-of-town checks within two days.

Spending on fraud prevention varied considerably by bank size . About a quarter of big banks spent more than $1 million, 82% of medium-size banks spent less than $250,000, and nearly three-quarters of small banks spent less than $10,000.

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