Check washing & check fraud can dirty your spring cleaning

Check washing is so simple, you must learn to prevent check fraud

Are check fraud and check washing still relevant in the age of digital payments? If you’re like the average person, chances are you don’t write too many checks anymore. With the convenience of online payment options, nearly universal acceptance of credit and debit cards, and the proliferation of ATMs offering you easy access to money at every turn, why resort to the archaic, labor-intensive method of writing a check?

The simple answer—sometimes we have no other choice!  Some places still don’t accept credit cards (Costco if you don’t have an American Express), or they charge an extra fee for them.  Some retailers don’t offer online payment options.  And frankly, sometimes it’s just an old habit and we haven’t made the effort to find a safer option because we’re stuck in the mindset of “it’s never happened to me” when thinking about check fraud.

Yet, according to a recent AFP Payments Fraud and Control Survey, checks remain the payment type most vulnerable to fraud attacks. In an American Bankers Association Deposit Account Fraud Survey, 73% of banks reported check fraud losses totaling approximately $893 million. And perhaps scariest of all, the imprisonment rate for check fraud is only 2% according to a statement made by the Department of Justice.  So although it’s not as glamorous or high tech as some other forms of fraud, check fraud is very tempting to criminals. It’s often as easy as taking an afternoon stroll down a street looking for vulnerable mailboxes, and then doing a little bit of “laundry”.

Check Washing Check Fraud

One form of check fraud that hits home for businesses and individuals alike is check washing.  It is the practice of removing legitimate check information, especially the “Pay To” name and the amount, and replacing it with data beneficial to the criminal (his own name or a larger amount) through chemical or electronic means. We conducted our own experiment to see just how easy it is to alter a check.  Take a look at our results in the video above.

What can you do to prevent this form of check fraud from happening to you?  There are many steps you can take:

  • Always use high security checks with multiple check fraud and check washing countermeasures
  • Use security gel-based pens with dark ink 
  • Don’t leave mail containing checks in an unattended or unlocked mailbox  (i.e. w/ red flag up)
  • Buy a locking mailbox (one large enough for a postal carrier to put mail through, but not large enough for a hand)
  • Shred voided checks
  • Check your bank statements regularly and immediately when you receive them.  You have a limited time in which to report check fraud.
  • Put clear tape over important fields when mailing a check
  • Do not leave blank spaces on payee or amount lines
  • Have new checks delivered to your bank if possible so they are not sitting in your unattended mailbox

Businesses are highly susceptible to massive check fraud via check washing, because the balances in their accounts tend to be higher and more vulnerable. This simple change from regular checks to high security checks can drastically reduce your risk of check washing and check fraud.

John Sileo is CEO of The Sileo Group, and a  keynote speaker on cyber security, identity theft and business fraud prevention. His clients included the Department of Defense, Pfizer, and Homeland Security. See his recent media appearances on 60 Minutes, Anderson Cooper and Fox Business.

 

Posted by Identity Theft Speaker in Burning Questions (Video), Fraud Detection & Prevention, Identity Theft Prevention, Video Tips and tagged , , , , , , , , , , , , , , .

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