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Beware of Check Washing Scams

What is old is new again, at least in the world of fraud. While we are becoming educated in the increasingly sophisticated techniques used by those committing fraud, we must be wary of the old ways.    

Have you ever sent a check that was cashed, but the recipient said it never arrived?  You may be the victim of “check washing.”    

According to the United States Postal Inspection Service, “Check Washing” scams involve changing the payee names and often the dollar amounts on checks and fraudulently depositing them. Occasionally, these checks are stolen from mailboxes and washed in chemicals to remove the ink. Some scammers will even use copiers or scanners to print fake copies of a check. Postal Inspectors recover more than $1 billion in counterfeit checks and money orders every year, but you can take steps to protect yourself.  

Unfortunately, our office recently experienced a similar scam when we sent a payment of over $20,000 to a vendor.  An unknown individual(s) intercepted the check, changed the payee’s name, and attempted to deceitfully deposit the check. Our Finance department has worked with the banks involved and the funds were not lost.

Check fraud has been largely defeated by the introduction of the concept of positive payment. With this technique, the exact parameters of payment are matched against the presentment of the check for payment or deposit. This may include the check number, amount, and payee. If any of these parameters do not match, the check is not honored. Most positive payment processes include the matching of check number and amount, but not all include the payee match. Without a payee match requirement, a check can be intercepted and the payee altered.    

If you are expecting a check and don’t receive it, please contact the issuer to verify if the check has been cashed.  Other ways to protect yourself from check washing are to retrieve your mail frequently and never leave your mail in your mailbox overnight. If you are going on vacation, have your mail held at the Post Office or have it picked up by a friend or neighbor.   

If you experience check fraud, please contact your banking institution for further assistance and guidance.