How to Protect Yourself from Check Fraud

According to a study done by the Federal Reserve, the number of checks written by consumers, businesses, and government entities dropped by 7.2% a year from 2018 to 2021, to a total of 11.2B.

However, the average payment made by check increased during the same period, from $1,908 in 2018 to $2,430 in 2021. The latter year saw a total of $27.23T in check payments, an amount equivalent to about 21% of all the noncash payments.

While writing a check may feel old fashioned to some, scammers have not lost sight of this payment method as a target of fraud. PCBB.com offers these tips for protecting yourself from check fraud:

A Blank Check for Criminals

Criminals are happy to take advantage of checks both large and small through a scam called check washing. Thieves either steal mail directly from business and residential mailboxes or go “fishing,” using strings coated in a sticky substance to lift envelopes from public mailboxes, then returning or discarding envelopes that don’t appear to contain checks. They use chemical solvents to remove the payee’s name and/or the payment amount, replacing those fields with their own names and cashing the checks.

Some check washers take the scam one step further and use information gathered from checks and bills to steal senders’ identities, take out loans in their names, produce counterfeit checks, or create fake identification cards and passports.

There are tactics you can implement to avoid check washing:

• Deposit checks promptly. Follow up with recipients who haven’t cashed the checks you issued them within a reasonable time frame. 

• Write in black ink only. Use permanent black gel pens to write a check. Black gel ink saturates the paper fibers of the check, making it more difficult to remove. 

• Pay to the order of a person or business. Make out checks to specific businesses and people. Don’t leave blank space in the lines for payee or payment amount. 

• Secure checks. Store unused checks in a secure spot. 

• Never leave outgoing mail exposed. Don’t leave outgoing mail unattended in a business or residential mailbox. A public mailbox is better, but handing mail directly to a mail carrier or bringing it to the post office is best. 

• Schedule mail pickups. Businesses that have a lot of outgoing mail might find it’s more secure to have the postal worker come to pick up mail at a designated time. Getting to know your mail carrier and having an idea of when to expect them can help a customer more easily identify if a criminal is posing as a postal worker. 

• Bring delivered mail in daily. It’s not a good idea to let delivered mail sit in an unsecured mailbox overnight. If this isn’t possible, customers should consider renting a post office box where the mail is secure until they retrieve it. If they leave town, they can ask the postal service to hold the mail. 

• Take advantage of informed delivery. Use the postal service’s informed delivery function to ensure that the mail received is actually delivered. 

• Be prompt with unfamiliar charges. Encourage customers to contact you right away if they see an unfamiliar item on their monthly bank statement. 

• Dispose of deposited or canceled checks. After 30 days, shred or burn canceled checks, checks deposited through the mobile app, credit card statements, and bills.

You can read the full article here.

First Federal Bank cares about your financial security. While digital payments are becoming more popular, checks still play a crucial role in many transactions, making them a prime target for check washing scams. The use of digital payments, secure mail handling, and vigilant account monitoring are key ways to reduce your risk.