Protecting Yourself from Check Washing Scams: What You Need to Know

What is a Check Washing Scam?

Check washing is a form of fraud where criminals steal checks from the mail and alter them to their advantage. “Check washing” scams involve fraudsters stealing checks from the mail, erasing the handwritten details (such as the payee and the amount), and then rewriting the check to themselves or to an accomplice for a larger amount.

The process involves using various chemicals and techniques to erase the handwritten details on a legitimate check, such as the payee’s name, the amount, and the signature. Once the original information is removed, the fraudster can fill in new details, such as their own name as the payee and a larger amount than originally written.

This fraudulent alteration often goes unnoticed by the check’s intended recipient until they receive their bank statement or notice discrepancies in their account balance. It’s a type of identity theft and financial fraud that can result in significant financial losses for the victim.

Check Washing Scams: An Old Scam Made New Again

Financial scams come in all shapes and sizes, and one particularly insidious type is the “check washing” scam. While many of us rely on checks for various transactions, from paying bills to receiving payments, criminals see them as an opportunity for fraud. In this article, we’ll explore what check-washing scams are, how to spot them, and what to do if you become a victim.

The Failure of Financial Institutions

Fundamentally, in this digital era, this is a failure of the banks and financial institutions.

Checks are an artifact of a bygone era that now comes with very high risk. But to overcome that risk would actually be very simple: just allow back customers to enter the check numbers and the amount into their mobile or online banking applications for easy comparison. Any bank could do this is short order, but no bank (to our knowledge allows it.)

How to Spot Washed Checks:

The most obvious clue is to: Look for Inconsistent Handwriting. If there is a differences between the amount and the payee’s name or other handwritten details on the check, then investigate a bit more before accepting the check.

1. Check for Alterations: Examine the check closely for any signs of alterations, such as variations in ink color, uneven or faded writing, or smudges around the written details.
2. Look for Missing Information: Check if any crucial information, such as the payee’s name or the written amount, appears unclear or incomplete. Legitimate checks typically have clear and consistent handwriting throughout.
3. Compare with Originals: If you have access to previous checks from the same issuer, compare the handwriting and other details to ensure consistency. Discrepancies may indicate tampering or fraud.
4. Use Security Features: Some checks come with security features like watermarks, holograms, or special inks that make alterations more difficult. Check for these features to verify the authenticity of the check.

Dealing with Washed Checks:

If you suspect that a check you’ve received has been washed or altered, it’s crucial to take immediate action to protect yourself from financial losses.

1. Contact the Issuer: Inform the issuer of the check, whether it’s a bank, a business, or an individual, about your suspicions. Ask to speak with the fraud department immediately. They can help verify the authenticity of the check and take appropriate measures to prevent further fraud.
2. Report to Law Enforcement: File a report with your local law enforcement agency immediately and the postal service inspector’s office if you believe you’ve been a victim of check washing. Providing details about the fraudulent check can help authorities investigate the matter and prevent similar scams in the future.
3. Monitor Your Accounts: Keep a close eye on your bank accounts and credit reports for any unauthorized transactions or suspicious activity. Report any discrepancies to your financial institution immediately to prevent further losses. If you think you have a washed or tampered check, ask you bank to change your account number – this will immediately nullify all checks.
4. Consider Check Security Measures: Invest in security measures for your checks, such as using check stock with built-in security features, use gel pens that are more resistant to washing, or opting for electronic payments whenever possible to reduce the risk of check fraud.

Summary

Check-washing scams can have serious financial consequences for victims, but by staying vigilant and knowing how to spot fraudulent checks, you can protect yourself from falling prey to these schemes.

Remember to scrutinize any checks you receive for signs of tampering or alterations, and take prompt action if you suspect foul play. By taking proactive measures and staying informed, you can safeguard your finances and avoid becoming another statistic in the world of financial fraud.

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