Despite the increasing digitization of money management, there is still a place in the economy for paper checks – and along with them, check-washing scams. According to the National Check Fraud Center, check washing has an $815 million annual price tag to U.S. consumers. Unfortunately, instances of check washing often go unnoticed until it’s too late to undo the damage. Here’s what you need to know about these scams and how to protect yourself.
How the scams play out
In a check-washing scam, a scammer steals checks from the mail, changes the payee name and/or the dollar amount, then deposits them into their own accounts.
The scammer pulls off this ruse by stealing outgoing mail from private mailboxes or lifting envelopes out of public mailboxes using “fishing rods” made of strings attached to a sticky substance. After lifting a pile of envelopes, the scammers keep those appearing to contain checks, and then discard or return the rest. With checks in hand, they’ll use household chemicals, like acetone or bleach, to erase the ink on the stolen checks, and then rewrite the numbers and/or the payee. Finally, they’ll deposit the checks into their own accounts.
Scammers sometimes take the scheme one step further by using the checking account details found on the check to commit further crimes against the check-writer. This can include producing counterfeit checks in the victim’s name, as well as fake IDs, driver’s licenses and passports. The victim may only learn about these crimes when they begin receiving overdraft notices or are informed that their ID is no longer valid.
Check washing is a particularly dangerous scam since victims may not learn of its occurrence for weeks, or even months. They may only discover the ruse when they review their monthly checking account statement and discover that the check amount and/or payee has been altered. Or, it may only happen when the intended recipient reaches out to let the check-writer know they still have not received the check. The scam’s discovery is more likely to be delayed when the scammers have not modified any information on the check and have simply stolen and deposited a check made out to “cash”. Unfortunately, many financial institutions do not offer complete protection on fraud that is not reported within a few days of its occurrence. Some offer partial protection for up to 60 days.
Law enforcement agencies on a local and federal level, including the U.S. Postal Inspection Service and the FBI, have task forces to help stop check washing. They offer the following tips for keeping your checks and your information safe:
- Whenever possible, use mobile and online banking services and P2P systems as a replacement for checks.
- When writing checks, use black ink, preferably gel. The ink found in blue ballpoint pens can be easily removed with acetone.
- Don’t raise your mailbox flag when there are bill payments inside. Hand this mail directly to your carrier or mail it from the post office.
- Retrieve your mail daily and never leave the mailbox full overnight. If you’ll be traveling, you can arrange for the post office to hold your mail for up to 30 days. Alternatively, have a friend retrieve your mail so it doesn’t pile up.
- When mailing checks, use envelopes that have security tinting.
- Shred or burn all canceled checks, checks deposited through your mobile app, credit card statements and bills.
- Review your checking account activity frequently. Ensure all checks have cleared for the correct amount and to the correct payee. You can generally access this information through your financial institution’s mobile banking app or website.
- Store your checks in a secure place within your home.
- Write out your checks to a specific person or business. Avoid making checks out to “cash”.
Check washing can wreak havoc on a victim’s finances before they even know it’s occurred. Follow the tips outlined here to keep your checks safe.
Your Turn: Have you been targeted by a check washing scam? Tell us about it in the comments.