Scam on the Rise: Check Fraud

We usually have a Cyber Corner section in each newsletter that highlights a cyber threat with tips on how to protect you and your business against it. While not a cyber threat, we wanted to talk about a more traditional type of fraud that is having a comeback – check washing.

As businesses have become more aware of the cyber threats out there and have been taking more proactive steps to protect against them, we have noticed that criminals have taken to some more traditional forms of fraud like check washing. We have seen an uptick in check washing incidents among our customers with about half a dozen claims so far this year.

The use of paper checks has been declining for many years now, but criminals have been increasingly targeting mailboxes to commit check fraud. According to FinCEN, reports of check fraud filed by banks nearly doubled last year from 350,000 in 2021 to 680,000 in 2022.

In check washing, the criminal steals signed checks from postal boxes then uses bleach or acetone to erase the payee’s name and amount to add their own. They will often rewrite the check for a much larger sum – hundreds or thousands of dollars more.  Victims may not even realize their checks have been stolen until they receive notices from companies to whom the check was made that their bills were not paid.

Check fraud is difficult to catch with criminals able to anonymously deposit through ATM machines or with new technologies like instant deposit through apps where one can scan the check with their phone.

Here are some tips to protect yourself against check washing:

• If you must mail a check, it is best to walk into a post office and drop it in the lobby mail slot or hand to a postal worker. Do not put checks in your home mailbox for pickup and raise the little flag which can alert potential thieves.
• Retrieve mail frequently. Don’t let delivered mail sit in your mailbox. Collect your mail every day, as close to the delivery time as possible. If you are expecting a check or other important mail, consider using the Postal Service’s free Informed Delivery service, which allows you to get a preview of mail expected to arrive soon.
• Try to limit your use of paper checks. Set up automatic bill payments through your service providers or bank to eliminate the need to put checks in the mail.
• Use a pen with blue or black non-erasable gel ink. Gel ink soaks into paper and is more difficult to remove than ballpoint-pen ink.
• Never leave checks (even in an envelope) unattended in the open.
• Monitor your bank account online regularly to confirm the checks that have been cashed and to see if anything seems suspicious.
• If you do not receive a check you were expecting, contact the sender as soon as possible to find out if it has been sent and deposited.