Washed Away: How check fraud is making a comeback

While the convenience of online payments has led to a decline in check use, a surprising trend is emerging: a rise in check fraud.

Remember Frank Abagnale Jr., Leonardo DiCaprio’s charming conman in “Catch Me If You Can”? Check washing, the act of altering a check to steal money, was one of his signature crimes. It might seem like a relic of the film’s era, but it’s experiencing a resurgence in the digital age. In 2023, 665,000 Suspicious Activity Reports (SARs) related to check fraud were filed by financial institutions – a 134% increase from 2020.

So, what exactly is check washing?

Check washing is the illegal act of removing the original payee and amount on a stolen check, allowing the thief to rewrite it for a large sum to cash into their own account. Check washing thrives because checks themselves often lack strong security features. Anyone with access to a stolen check and some basic tools can potentially alter it.

Why is check washing on the rise?

Several factors contribute to the resurgence of check fraud:

Limited security features: Compared to credit cards and other electronic payment methods, checks often lack robust security measures.

Sophistication of fraud techniques: Criminals are constantly developing new methods to alter checks, making them harder to detect.

The rise of mobile check deposit: While convenient, mobile check deposit apps can be exploited by fraudsters who alter checks before they are deposited.

What can I do to protect myself?

Check fraud often occurs because a check is stolen from the mail. If you must mail a check, drop it off directly at the post office to minimize thieves’ access. Also, consider writing your checks in black gel pen – that kind of ink is less susceptible to removal.

If you suspect that you are a victim of check fraud, report the incident immediately to your financial institution. Financial institutions may offer fraud protection, but acting quickly is crucial to minimize your losses.

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Fraud Watch is a collaborative effort between Advantage Credit Union and the Newton Police Department, dedicated to keeping our community informed about the latest scams and fraud prevention tips. If you have any questions or concerns about fraud or identity theft, please contact your local financial institution.

Disclaimer: This article provides general information and should not be considered financial or legal advice.