Check Washing: How to Protect Yourself Against Fraudulent Altering of Your Checks
I had not heard about this type of check fraud until recently. It’s different from longer-standing methods, including:
- Check forgery: Signing a check without authorization
- Check floating: Paying for something with a check backed by insufficient funds
- Check kiting: Writing a check backed by insufficient funds, depositing it into another account, and then withdrawing the provisional funds before that check bounces; the name is derived from the fraudulent practice of issuing IOUs with no collateral to support the loan, like “flying a kite” which is only supported by air
Check washing apparently started back in the 1980s and is one of many “altered check” techniques. It works like this:
- Thieves steal a handwritten paper check that you’ve mailed, for example by “mail-fishing” your envelope out of a USPS blue collection mailbox (perhaps using string or a wire hangar and something sticky), from the mailbox mounted on your front door or porch, from some other less-secure mail-collection box, or even from a letter carrier or USPS truck. They probably also do this after dark with mailboxes that are not in easily-seen locations.
- Using special chemical solvents, they “wash” off the ink where you wrote in the payee and dollar amount, leaving your signature (and the preprinted background) intact. Or, they might use a scanner to create a fake copy of your check.
- They then write in a different payee and dollar amount, and then deposit or cash that check. They may also create a fake driver’s license using your name and address to help accomplish this.
How can you protect yourself from this type of check fraud, as well as some others? Here are the recommendations that I’ve compiled from various sources, ranging from researching this online to talking to my bank, including low-tech and high-tech advice from the Postal Service and others.
Protecting checks that you handwrite and mail
Consider adopting these techniques:
- If you’ve mailed a check and it got cashed but the other person never received it, look at a copy of that cancelled check immediately! You may be a victim of check washing.
- If you’re going to mail paper checks using blue collection mailboxes, deposit your mail close to a pickup time to avoid having it sit in that box overnight or during Sundays and holidays. Also, make sure that the mailbox is the newer type that has a “slot” and a blocking bar. They’re more thief-resistant than the older models that have a pull-down handle with a hinged tray.
- Even better, stop using blue collection mailboxes entirely when you mail a check. Instead, go to a Post Office during business hours and deposit your mail inside or hand it to a letter carrier. My local Post Offices have a slot in the wall near the retail clerks with a collection bin behind it.
- Use pens that are resistant to check washing. Black gel pens are most resistant, rollerball, thick felt-tip, and fountain pens are also good choices. Avoid blue ink, ballpoint pens, and permanent markers.
- When you receive new paper checks, take a few minutes to confirm that you have actually received every single check you ordered. Some thieves may steal a single check from the middle of a pack.
- Buy paper checks that have security features, including watermarks, the word “Void” built into the paper, and security inks that produce permanent stains when treated, etc.
- Fill in all lines on each check you write.
- Don’t put any cancelled or unused checks in the trash or recycling. Shred them instead.
Switching from mailing handwritten checks to other methods of payment
- Consider using the bill payment feature in your online banking website to manually pay your bills. Payments you make to large companies (credit cards, utilities, etc.) are done electronically. For smaller companies and individuals, the service that your bank uses (e.g., CheckFree, Fiserv, etc.) prints up paper checks and mails them for you (often at no charge), without using blue collection mailboxes. Such paper checks are also harder to wash since the information and the background are typically printed at the same time with all the same ink, and the word “Void” is built into the paper.
- If a vendor offers electronic payment (e.g., charging your credit card, transferring the payment directly from your bank account, etc.), consider using it manually instead of mailing a paper check.
- I suggest that you manually pay your bills online. I am not suggesting that you set up automatic or recurring payments for your bills. That’s an additional decision that only you can make.
- If you use a paper checkbook or bookkeeping software to track your finances, you will still need to enter every online bill payment you make, otherwise your records will not accurately reflect your spending.
Protecting checks written to you by other people which you might receive through the mail
- If you have a mailbox on the front of your house that’s easy to open, the best approach is to replace it with something more secure, e.g., an external locked mailbox (which should also be designed to prevent mail-fishing) or a slot in your front door, or use a PO Box at your local Post Office.
- If you can’t replace the mailbox on the front of your house, don’t leave your incoming mail in it overnight, and don’t leave outgoing mail there for your letter carrier.
- If you receive paper payroll checks from your employer through the mail, switch to direct deposit.
- Sign up for the free USPS Informed Delivery service to get “daily digest emails” which give you advance notice of most letters and packages arriving soon. You’ll need a separate USPS online account for each address. This service is not yet available in all areas, nor for business accounts. See “Where to go from here” below for more information.
- If you’re going out of town, submit a hold order at your local Post Office, or have a friend or neighbor pick your mail up every day.
What my bank told me
In addition to echoing many of the great suggestions above, my local bank also explained that:
- If an altered (or forged) check of mine were cashed or deposited, they would cover that 100%.
- I have 90 days from the date a fraudulent check appears on my bank statement to report it.
- In general they put a “hold” on deposited funds, usually $200 for customers who have been with the bank less than a year.
- Their policy is the same for both personal and business accounts.
Other good advice
- Ask your bank: If check washing (or check fraud in general) happened to me, am I covered? How quickly must I report it? What level of proof will be required? What if I have a business account?
- Look at your bank statements as soon as they arrive (or look online at the images of your cancelled checks) to confirm that none of your checks have been altered.
- If you become a victim of check fraud, report it immediately to your bank, and report any stolen mail to the USPS.
Where to go from here
As always, if this seems too complicated to manage on your own, I recommend that you talk to someone you know and trust to help you.