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Combating Check Washing & Check Fraud Schemes

Our team at Merchants Bank works alongside our customers to protect your assets and ensure your money is housed in a safe and secure place. When it comes to your finances and hard-earned wages, we’re here as a resource. We are experts in financial services who assist customers as they look to identify the right account for them, invest and grow their businesses, plan for the future, and so much more. We’re also here to provide education on how best to protect your finances against fraud.

It’s a tale as old as time. Defrauders are out there each and every day with brand-new and old-school schemes to cheat ordinary people out of their money. This can especially be the case as Americans navigate tax season. Check washing and check fraud scams can be quite common, particularly when more checks are pushed out through the mail, such as during the holidays and Tax Day (April 15). Each year, the United States Postal Inspection Service (USPIS) reportedly recovers more than $1 billion in counterfeit checks and money orders.

2024 Check Washing and Check Theft Infographic -1
*Image provided by American Bankers Association

Why are criminals after checks that have been placed in the mail? When you send birthday money to your niece or mail in a monetary donation to a charity, there is a window of time when those checks are out of your reach, sitting idle. This poses an ideal time for scammers to steal these checks simply by retrieving them from your mailbox, breaking into those blue U.S. Postal Service mail drops or confronting and robbing postal carriers while on their route.

Once defrauders have your check, the washing process begins. They use chemicals to fade or completely remove the name of the intended recipient and often the dollar amount on the check. Now criminals can alter the check listing themselves as the beneficiary, cashing the check and sending your money directly to their account.

USPIS recommends a few precautions when mailing a check or anticipating receiving one in the mail.

  • Visit your local post office if you must send a check or reach out to them to determine when the last scheduled pick-up time will be for the nearest U.S. Postal Service blue mail drop. Once that time is identified, drop your mail into the box right before the scheduled pick-up, reducing the amount of time that it sits idle.
  • Check your mailbox daily, and don’t leave mail sitting overnight.
  • Before traveling, visit your local post office to place a hold on your mail delivery until you return. If you must leave unexpectedly or with short notice, contact a friend, family member or neighbor you trust to collect your mail regularly.
Infographic
*Image provided by American Bankers Association

The American Bankers Association recognizes this issue, sharing several other best practices people should use to protect themselves. This includes:

  • When filling out a check, use a gel or a long wear, permanent pen and avoid leaving spaces where the amount and payee’s name are listed.
  • If you’ve made an error while writing a check or a cashed check has been given back to you, don’t simply throw it away. Be sure to shred these items prior to disposing of them.
  • Set aside time every few days to review your banking activity and be sure to flag any discrepancies with your bank. When a check you’ve written is cashed, check your online banking to ensure the amount is accurate and review any images available of the check to ensure it has not been modified.
  • When possible, use our free bill pay service within online banking to make e-check and Automated Clearing House (ACH) payments, or use a trusted person to person (P2P) payment app, such as Zelle.
  • In the days after mailing a check, reach out to the businesses and/or individuals to ensure they received it.

In addition, please remember to keep your checkbook in a secure location – usually at home. Never leave it in your car, endorse all of your checks within the book at once, or give someone a blank check you’ve endorsed for them to fill in later.

If you fear you’ve fallen victim to check washing, check fraud or a similar financial scam, contact your local police department to file a report and notify USPIS by visiting www.uspis.gov/report or calling 1-877-876-2455. You should also connect with your Merchants Bank branch, who can provide you with directions on the next steps in securing your account.  

Infographic check Washing and Check Theft Scams Infographic 2
*Image provided by American Bankers Association

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