Check Fraud is on the Rise: How It Happens and How You Can Stay Safe.

December 11, 2023

While writing checks may feel old-fashioned, fraudsters have found a way to benefit from checks in transit thanks to modern-day methods. According to the American Bankers Association (ABA), check fraud doubled in 2022 from the previous year, with more than 680,000 claims. Banks and consumers saw the initial rise in check fraud during the Pandemic when criminal enterprises formed to specifically target the government-issued stimulus checks that were being mailed. Once the stimulus funding was over, basic check fraud became the primary target for fraudsters again and has since increased year over year.

How does check fraud happen?

Check fraud begins with fraudsters stealing mail directly from people’s mailboxes or the blue USPS mailboxes found throughout cities and towns. The fraudsters illegally go through the mail, separate all the checks, and begin “check washing.” Check washing is a process that involves removing the payee’s name and the dollar amount the check is written out for off of the check, which is often done by using common household chemicals.

Once the check is free of a payee and dollar value, fraudsters either sell the blank checks online or insert the name of a “walker” on the payee line with a dollar amount that is less likely to trigger specific attention. The walker then has the job of depositing the check at a bank branch, and as soon as the funds become available, they are rapidly withdrawn.

How can you stay safe?

Reduce your use of checks. The fewer checks you write, the lower your risk of falling victim to check fraud. Instead, try paying your bills online, or using tools provided by your bank like Bill Pay, which puts all your payments in one convenient dashboard without ever sending them through the mail.
Use good check-writing habits. When there is no way around writing a check, make sure you’re doing your part to stay safe. Simple things like using indelible ink and ensuring there are no blank spaces in front of the payment amount help considerably. Lastly, never write a blank check, no matter how much you trust the person you’re giving it to.
Mail your checks at the post office. Authorities say the riskiest place to mail your check is through your personal mailbox or outdoor USPS collection bins. While it may be less convenient, make the extra effort and drop your mail off inside the post office. If you need to use your personal mailbox, avoid putting up the red flag on your mailbox, as that’s an easy way for fraudsters to spot a potential target.
Monitor your accounts. If you don’t already, begin utilizing online and mobile banking so that you can keep a close eye on your accounts. With online and mobile banking, you’ll be able to see transactions in your account much faster than waiting for your paper statement to arrive. For added security and convenience, enroll in eStatements, which will further help keep your personal information from ending up in the hands of fraudsters.

While staying vigilant is important, check fraud can be extremely sophisticated. If you’re ever unsure about a check you’ve received, or if you suspect you are the victim of check fraud, contact us right away or visit any Bay State Savings Bank branch so that we can assist you.