Greg's Corner

Tagged: check washing Toggle Comment Threads | Keyboard Shortcuts

• 

  Geebo 9:11 am on December 11, 2024 Permalink | Reply
  Tags: bank fraud ( 26 ), banks ( 7 ), check washing, Scams ( 1,383 )   

  Check Washing is a Growing Financial Threat 

  

  By Greg Collier

  In Chicago, a local business owner recently experienced the devastating impact of a sophisticated check-washing scam, losing nearly $30,000 from her business account. This incident jeopardized her ability to cover critical expenses such as payroll, rent, and insurance, underscoring the grave consequences of such financial crimes. The scam also highlighted troubling vulnerabilities in the banking system and raised urgent questions about how such crimes can be prevented.

  Check washing involves stealing checks, altering the information, and fraudulently cashing them. In this case, checks originally written for modest amounts, ranging from $25 to $375, were altered to just under $10,000 each. This manipulation was strategic, as amounts of $10,000 or more typically trigger federal safeguards designed to detect and prevent fraud. By keeping the altered amounts just below this threshold, the perpetrators likely avoided immediate scrutiny, revealing significant gaps in current fraud detection measures.

  Despite the victim’s prompt response, including filing theft reports and fraud affidavits, her ordeal stretched on for months. The resolution came only after media coverage pressured the financial institutions involved. This delay reflects a troubling trend in the banking industry, where victims of fraud often face prolonged struggles for restitution unless public attention is brought to their cases. Such systemic failures call into question the adequacy of existing consumer protections and the responsiveness of banks to their customers’ needs.

  The victim’s frustration was compounded by the failure of mobile deposit systems to detect glaring irregularities in the altered checks. Even with visible signs of tampering, such as whiteout, the checks were processed without issue. While banks reportedly invest billions annually in fraud prevention technologies, this incident highlights persistent gaps that criminals exploit with ease. The banking industry must adopt more advanced detection tools and processes to address these vulnerabilities effectively.

  For individuals and businesses, vigilance remains essential in protecting against check fraud. Simple precautions, such as ensuring checks are filled out completely and securely delivered, can help reduce risks. Monitoring account activity closely and promptly reporting discrepancies can also aid in catching fraud early. The adoption of electronic payment methods offers an additional layer of security by eliminating the physical check entirely.

  However, personal efforts alone are insufficient to address the systemic nature of this issue. Financial institutions must take a more proactive stance in combating fraud, including implementing enhanced scrutiny of checks processed through mobile systems. Faster responses to fraud claims and stronger customer support should become standard practices, not just actions taken under public pressure. Additionally, the banking sector needs to modernize its approach, utilizing innovative solutions and technology to stay ahead of evolving threats.

  Until banks and regulatory bodies prioritize comprehensive solutions, stories like this will continue to highlight the precarious balance between convenience and security, leaving consumers and businesses to shoulder the burden of a flawed system.

   

  Leave a ReplyCancel reply
• 

  Geebo 8:00 am on October 10, 2024 Permalink | Reply
  Tags: bank fraud ( 26 ), banks ( 7 ), check washing, Scams ( 1,383 )   

  Banks Turn Their Backs on Check Fraud Victims 

  

  By Greg Collier

  Imagine discovering that a substantial payment intended for a trusted vendor never made it to the right hands. Instead, a thief intercepted the check, altered it, and cashed it, leaving the original payer out thousands of dollars. With check fraud up 365% since the pandemic, scenarios like this are becoming all too common. Yet, many victims find themselves met with indifference from banks when seeking help.

  Despite millions of dollars lost to check fraud each year, financial institutions are not always responsive. Many banks enforce strict deadlines for reporting fraudulent activity, often limiting victims to just 30 days. This leaves those who don’t notice the fraud immediately with little recourse, even though the law allows for a year to report such incidents. The reality is that while banks have the resources to combat fraud, they often prioritize minimizing their own liability over helping customers recover lost funds.

  For small businesses and individual consumers, banks’ reluctance to assist fraud victims adds another layer of stress. It’s not enough to run daily operations or handle personal finances; now, constant vigilance over bank transactions is required. Those writing checks are routinely expected to monitor their accounts for signs of tampering and follow up on every cleared payment.

  While monitoring accounts and scrutinizing check images are sound practices, they should not be substitutes for meaningful bank support. Victims of check fraud, who have already suffered significant losses, should not be left to shoulder the responsibility of detecting and reporting fraud in such a short timeframe.

  When a fraudulent check is cashed, the altered payment details are often clear evidence of tampering. Still, many banks fall back on rigid policies, pointing to account agreements that limit victims’ reporting windows. Even when customers provide proof of unauthorized alterations, banks often refuse to compensate them, citing missed deadlines as grounds for denial.

  This unhelpful approach effectively leaves victims with nowhere to turn. The frustration is compounded by the fact that banks have the tools to detect such fraud and could play a more active role in restitution. Unfortunately, the industry standard leans towards protecting bank interests rather than aiding those who suffer losses.

  While change in the legal landscape is necessary, there are steps people can take to protect themselves from check fraud. Some practical measures include:

  • Hand Delivering Checks: Whenever possible, avoid mailing checks by delivering them directly to the intended recipient.
  • Regular Account Monitoring: Frequently review account statements for suspicious transactions.
  • Checking Cleared Payment Details: Ensure that the payee and amount on cleared checks match the original information.

  These precautions can help reduce the risk of falling victim to fraud. However, they should not be seen as a replacement for the need for better bank practices and stronger legal protections.

  The rise in check fraud demands a shift in how financial institutions treat their customers. While some precautions can be taken to prevent fraud, the primary responsibility should not rest on the victims. Banks have the capacity to detect and prevent check fraud and should be held to higher standards of accountability. Legal reforms are needed to create a fairer environment where those affected by fraud can seek restitution without navigating impossible deadlines.

  Until meaningful changes are implemented, consumers must remain cautious and take proactive measures to safeguard their finances, despite a system that often leaves them unsupported.

   
• 

  Geebo 8:00 am on August 16, 2024 Permalink | Reply
  Tags: check fraud, check washing, identity theft ( 108 ), mail theft ( 11 ), Scams ( 1,383 )   

  The resurgence of check fraud 

  

  By Greg Collier

  Writing physical checks might seem like an outdated practice. However, despite the decline in check usage, check fraud is not only persisting, it’s on the rise. Many victims of this crime may not even realize they’ve been targeted until it’s too late.

  Imagine receiving a notification from your bank that a check you wrote for a small amount was cashed for a staggering sum. Or worse, that multiple checks you never wrote are now linked to your account. Unfortunately, scenarios like this are becoming more common.

  Criminals have found new ways to profit from stolen checks, with social media platforms like Telegram becoming a marketplace for these illicit transactions. In one recent case, dozens of stolen checks from a specific area were found for sale online. The checks, all pilfered from the same vicinity, were bundled with personal information that was brazenly displayed for potential buyers.

  Once checks are stolen, they are often undergo a process called check washing. This process involves removing the original ink, allowing fraudsters to alter the payee’s name and the amount. These doctored checks are then sold to the highest bidder, often along with other stolen information such as driver’s licenses, and debit cards. The sheer volume of stolen checks has allowed criminals to operate openly, with little need to conceal their activities.

  To protect against check fraud, limiting the use of checks is advisable. If writing a check is unavoidable, it’s wise to avoid dropping it in public mailboxes, where criminals often strike. Instead, taking the check directly to the post office provides a safer alternative. Tracking the check’s progress can also offer peace of mind, ensuring that it reaches its destination without issue. Staying alert and monitoring bank accounts closely can help catch any unusual activity early, allowing for a quicker response if something goes wrong.

  Check fraud may seem like a relic of the past, but its resurgence reminds us that even in a digital world, old threats can still cause significant harm. By taking a few extra precautions, you can help protect yourself from becoming the next victim.

   
• 

  Geebo 9:00 am on January 23, 2024 Permalink | Reply
  Tags: check washing, mail theft ( 11 ), Scams ( 1,383 ), USPS ( 13 )   

  Is it even safe to mail checks anymore? 

  

  By Greg Collier

  When we discuss the check washing scam, or the newer check cooking scam, we recommend mailing your checks from inside your local post office. But what happens when your checks are being stolen from within the postal system? That’s what one county in Maryland discovered happening in their community.

  If you’re not familiar with check washing, it’s a fraudulent scheme where criminals tamper with a check by altering or erasing information to gain unauthorized access to funds. The term ‘check washing’ specifically refers to the process of removing or modifying the ink on a written check, typically using chemicals or solvents. This allows the perpetrator to change details such as the payee’s name, the amount, or other information on the check.

  Once the check is altered, it can be used by the fraudster to withdraw money from the victim’s account or make unauthorized purchases. Criminals involved in check washing often focus on outgoing mail or checks left in vulnerable locations, such as home mailboxes, where they can easily intercept and manipulate the checks.

  In Prince George’s County, Maryland, investigators discovered a multi-million dollar check washing ring. One of the alleged ring members was a USPS mail handler assistant. This position allowed them to steal checks while on the job.

  From there, the checks would be sent to the ring leader, who allegedly would alter the checks. Then the checks were made out to money mules, who would deposit the checks into their own bank accounts until they cleared. Money was withdrawn or transferred from these accounts into other accounts used by the scammers.

  Each member of the ring is facing a potential sentence of 30 years in federal prison.

  While this is most definitely an edge case scenario, the chance of your check being stolen in the manner is not zero. So, what can you do to prevent your check from being stolen? If you’re insistent on writing checks, we recommend using an indelible ink like a gel pen or Sharpie. These inks are said to be difficult to wash off the checks. However, checks written with these inks are still vulnerable to the new check cooking scam, which alters checks digitally.

  For situations like recurring monthly bills, we recommend setting up automatic payments with your providers. Typically, recurring bills such as utilities, rent/mortgage, and insurance premiums are good candidates for automation.

  While paper checks have been a traditional method of payment, the risks associated with scams like check washing highlight the vulnerabilities in this outdated system. With the advent of secure and convenient digital payment options, it’s time to seriously consider abandoning paper checks. Embracing electronic transactions enhances security and streamlines financial processes, making it a practical choice for the modern era.

   
• 

  Geebo 9:01 am on January 17, 2024 Permalink | Reply
  Tags: check baking, check cooking, check washing, mail theft ( 11 ), Scams ( 1,383 )   

  New version of check washing scam emerges 

  

  By Greg Collier

  In case you’re unfamiliar with check washing, it’s a scam where criminals alter or erase information on a check to gain unauthorized access to funds. The term ‘check washing’ refers to the act of removing or altering the ink from a written check, typically using chemicals such as acetone or other solvents. This allows the fraudster to modify the payee’s name, the amount, or other details on the check.

  The altered check can then be used to withdraw money from the victim’s account or make unauthorized purchases. Criminals engaged in check washing often target outgoing mail or checks left in unsecured locations, such as home mailboxes, where they can easily intercept and modify the checks.

  Now, according to the FBI, there’s a new check scam where the washing part is done electronically. In a new process called ‘check cooking’ or ‘check baking’, a scammer only needs a digital photograph of a check. From there, the scammer can use software to remove any writing that’s on the check. Then, the scammer can print out as many counterfeit checks as they need. Instead of writing one big check like a scammer would with check washing, they can now write out several small checks to stay under the radar. However, by the time the scam is caught, the victim could still lose thousands of dollars to the scammer.

  A scammer would still need to possess a physical copy of one of your checks to commit this scam. To protect yourself from such scams, you may want to consider switching to a different method of payment other than checks. You can always pay your bills through a debit or credit card, or have an automatic payment taken from your bank account.

  If there is a situation where you absolutely have to send a physical check, mail the payment from the inside of your local post office. Whatever you do, don’t leave bills in your outgoing mail at home. Scammers have no hesitation about taking the mail out of your mailbox if there is any hint of a check being in there.

  Additionally, monitoring bank statements regularly for any unauthorized transactions can help detect and report fraudulent activities promptly.

   
• 

  Geebo 8:00 am on October 17, 2023 Permalink | Reply
  Tags: check washing, mail theft ( 11 ), Scams ( 1,383 )   

  Check washing scam on the rise again 

  

  By Greg Collier

  We understand there is still a large segment of the population who pays their bills by check. It’s what they know and what’s been working for them most of their lives. Companies still accept checks, so they see no reason to change. Unfortunately, the US mail system is no longer seen as the hallowed system it once was. While at one time it was seen as sacrilege to steal someone’s mail, that is no longer the case. Paying your bills by check through the mail can now put you at an extreme financial risk.

  Check washing is a scam in which a criminal alters the details on a check to gain unauthorized access to someone else’s funds. This is usually done by soaking the check in chemicals, which removes the ink. The scammer will then write the check out to themselves in a much higher amount than was originally issued. Victims of check washing have lost thousands of dollars to this scam.

  Scammers will steal someone’s mail, typically a bill, to get their hands on a check. It doesn’t matter if the bill was mailed at an official USPS mailbox, or one of the drop-off mailboxes in front of your local post office. Check washing scammers have devices that allow them to retrieve the mail through the top slots of just about any mailbox. These scammers especially look for someone sending outgoing mail from the mailbox in front of their homes. Putting up the flag on a home mailbox can be a signal to scammers to come steal your mail.

  For example, take the city of Westerville, Ohio. This suburb of Columbus only has a population of 38,000. Yet, local police have received 50 complaints about check washing since March. Investigators say victims have lost upwards of $10,000. One detective even went as far to say that no one should mail checks anymore.

  To make matters worse, once a scammer steals a check. The information included in the check can be used to steal that victim’s identity. Stolen checks are even being sold to other scammers on the dark web.

  Instead of sending checks in the mail, consider setting up automatic payments with your providers. Typically, recurring bills such as utilities, rent/mortgage, and insurance premiums are good candidates for automation.

  However, if you’re dead set on still using checks, there are some steps you can take to help protect yourself. If you only use gel pens when writing checks, it makes it harder for scammers to remove the ink. When mailing checks, take them directly to the post office and drop them off inside the post office.

   
• 

  Geebo 8:00 am on July 28, 2023 Permalink | Reply
  Tags: AI ( 17 ), arrest warrant ( 26 ), check washing, identity theft ( 108 ), impersonation scam ( 148 ), jury duty scam ( 30 ), police impersonation scam ( 65 ), Scams ( 1,383 ), voice cloning ( 24 ), voice spoofing ( 21 )   

  Scam Round Up: Weird AI scam and more 

  

  By Greg Collier

  Our first scam comes to us from Athens, Texas, where residents have been experiencing a twist in the arrest warrant scam, also known as a police impersonation scam. Typically, when scammers pose as police, they’ll call their intended victims and tell them they have a warrant out for their arrest, The scammers usually claim this for missed jury duty, but they can also claim a number of other infractions.

  For example, residents of Athens have complained the scammers are accusing their victims of using their phone to transmit a photo that traumatized a child. Essentially, the scammers accused their victims of sending explicit material to a child. The victim is then asked to pay several hundred dollars over the phone to resolve the complaint.

  That’s not how arrest warrants work. If there is a warrant for your arrest, especially one that’s supposedly this serious, the police are not going to call you over the phone. Also, no law enforcement agency will ask for money over the phone, and then ask for it in unusual ways, like gift cards or cryptocurrency, just to name a few.

  If you receive a call like this, hang up and call your local police at their emergency number. Not only can you verify there is no warrant for your arrest, you can let the police know scammers are working in your area.

  ***

  Police in Connecticut are warning residents there has been an uptick in check washing. Check washing typically involves stealing checks that are in outgoing mail. Thieves often steal the mail from residential mailboxes, along with the outdoor drop-off boxes used by the US Postal Service. They then dip the written checks in a chemical solution that removes the ink from the check, so the thieves can write the checks to themselves.

  The police in Connecticut are also warning residents the thieves can steal checks out of your trash. If you use your bank’s mobile app to deposit checks, and then throw the checks out, make sure they’re properly shredded before throwing them out, as check washing can still be performed on voided checks.

  If you have to write a check, which is going in the mail, use a gel-based ink pen. The ink in gel pens is said to be more resistant to check washing. Also, don’t put the envelope that holds the check in your mailbox and the put the mailbox flag up. This is a signal to thieves there may be a check in there.

  ***

  Lastly, we’ve read about another AI voice-spoofing scam. There has been a rash of these scams nationwide over the past year or so. In this scam, the victim gets a phone call where the voice sounds like exactly like one of the victim’s loved ones. The scammers manipulate the loved one’s voice in such a way where it sounds like the actual loved one is in some kind of trouble and needs money to resolve the issue. Typically, the scammers ask for bail money, or in some cases a ransom. However, the loved one is usually unaware their voice is being used in a scam.

  However, the recent news article we read out of Alabama, suggests scammers are using the voice-spoofing technique in identity theft. An Alabama woman received a call she thought was from her brother, but was actually from scammers. Instead of asking for money, they asked the woman for personal information. They then used this information to hijack her Facebook account and use that for additional scams. Police there have said the scammers used the videos the brother posted on social media to mimic his voice with AI.

  We can’t say for sure, but this sounds like the scammers may have been asking for the woman’s security questions in case she lost her Facebook password. Considering the answers to these questions are something like “What was your first pet’s name?” or “What city were you born?” these may seem like innocuous questions coming from a close family member.

  In cases like this, it’s best to ask the family member calling a question only they would know to verify their identity.

   
• 

  Geebo 9:00 am on December 14, 2022 Permalink | Reply
  Tags: bank fraud ( 26 ), bank scam ( 72 ), check washing, Detroit ( 4 ), Scams ( 1,383 )   

  Even businesses should watch out for check washing 

  

  By Greg Collier

  Writing personal checks has largely become a relic of the past. However, there are still enough people writing checks that check washing has been rampant lately. Check washing is when a check is stolen either from a home’s mailbox or a postal mailbox. The check is then dipped in a chemical solution which removes the ink. The thieves can then rewrite the check for any amount they want as long as the funds are available. This has largely affected older consumers, who still send checks through the mail.

  However, even though check writing has fallen in popularity with consumers, it’s still a common practice by businesses. If businesses need to pay their vendors, it is still often done by check. This can make them a prime target for check washing.

  For example, a woman from Detroit is a member of her condo’s board association. She wrote a check for $525 to a vendor and mailed the check at a mailbox outside the Post Office. A thief had fished the envelope containing the check out of the mailbox. The check was washed and rewritten for $18,000 before being cashed in New York. To make matters worse, the board’s bank is allegedly dragging their feet in helping them get their money back.

  Much like for consumers, the warning for businesses are largely the same. If you’re still using handwritten checks, there are special pens you can purchase that are resistant to check washing. Some experts say that gel pens and fountain pens are resistant to the check washing process.

  Also, if your business isn’t large enough to have your mail picked up securely by USPS, go inside your local post office to have the checks mailed. Outdoor mailboxes have become vulnerable to thieves in recent years. Check washing has become such a problem, experts say that $1 billion was lost to the scam last year alone.

   
• 

  Geebo 9:00 am on November 29, 2022 Permalink | Reply
  Tags: check washing, Facebook ( 180 ), Facebook Messenger ( 4 ), IRS ( 24 ), job scam ( 81 ), refund scam ( 7 ), Scams ( 1,383 ), text scam ( 23 )   

  Scam Round Up: Job scam wants your Facebook login and more 

  

  By Greg Collier

  If you’re thinking of sending money to relatives as a gift this holiday season, you may want to reconsider writing a check. Once again, scammers are stealing mail from mailboxes in hopes of finding a handwritten check. In a process called check washing, scammers can soak the check in chemicals that will remove the ink from a handwritten check. The scammers will then write the check for any amount they please before cashing it.

  To better protect yourself from this scam, mail any checks you may be sending inside the post office itself. This goes a long way in preventing the mail from being stolen. There are also special pens you can purchase that are resistant to the check washing chemicals.

  ***

  The Federal Trade Commission has issued an alert warning taxpayers about a refund scam. According to the FTC, scammers have been sending out text messages claiming you’re eligible for a ‘tax rebate’or some other kind of payment from the IRS. As with most text messaging scams, the messages contain a link for the recipient to click on to get their supposed refund. Clicking on the link could have devastating consequences as it could either ask you for personal or financial information, leading to identity theft, or it could inject malware into your phone.

  Just keep in mind that the IRS is never going to initiate contact with a taxpayer through text messages. If there is any kind of issue concerning your federal taxes, you will receive a notice in the mail before anything else.

  ***

  A woman from Missouri was almost scammed out of her Facebook account while applying for a job online. A friend of a friend had posted a job ad on his Facebook page. While interviewing for the job, she was told that she was being interviewed by the company’s founder and CEO. All the interviews took place through messaging apps like Messenger and Google Chat. The phony CEO asked the woman for a copy of her driver’s license and Social Security card, which may not seem unusual. However, she was also asked for her Facebook login information. Thankfully, she realized this was a scam and cut off contact with the scammer.

  While there have been stories in the past about employers asking for employees’ Facebook logins, those are rare exceptions and not the norm. This seems like the scammers wanted her personal information to hijack her Facebook account and use it for additional scams. Having her personal information might allow them to claim that they are the actual owners of the Facebook account. The acquaintance’s account was more than likely hijacked by the scammers.

   
• 

  Geebo 8:00 am on September 29, 2022 Permalink | Reply
  Tags: cashier's checks ( 2 ), check cashing ( 2 ), check scam ( 79 ), check washing, fake check ( 48 ), Scams ( 1,383 )   

  Scam Round Up: A trio of tricky check scams 

  

  By Greg Collier

  Checks have always been prone to a number of scams. Even before most people switched to electronic banking, there was always a way to manipulate checks to someone’s advantage. Now, that most consumers use debit cards and get paid through direct deposit, it’s not surprising there are people who are unaware of how checks can be used in a scam. Here are three check scams from recent news reports you should be aware of.

  ***

  Of course, there’s the fake check scam. This is where scammers will send you a check for any number of reasons. They want you to deposit the check into your own bank account and send some of the money back before your bank finds out the check is fake. While the fake check scam is mostly seen with job scams and online selling scams, it can affect businesses as well.

  For example, a home supply store in Ohio recently received a cashier’s check that was supposed to cover supplies for a home renovation. The check was written for $5000 more than the store was asking. The person who sent the check also included instructions that the difference should be sent to the home’s previous owner for some reason. Thankfully, the store owner felt like he was being scammed and contacted the police.

  If someone you don’t know personally sends you a check and wants you to send part of the money back to them or to a third party, that is almost assuredly a scam.

  ***

  Another check scam that has become more common lately is the check washing scam. This is when checks are stolen from outgoing mail that are usually designed to pay bills. The checks are then soaked in a chemical solution that removes the handwritten portion of the check. This allows the scammers to rewrite the check to themselves and cash the check without the account holder’s knowledge.

  If you pay your bills by check, the best way to protect yourself is to take any outgoing mail that contains checks and drop them off inside the post office. Mail has even been known to be stolen from the mailboxes that are outside the post office. There are also pens you can order that are resistant to check washing.

  ***

  Lastly, the NYPD is warning residents of Staten Island about a different type of fake check scam. One precinct there has received numerous complaints about scammers approaching people on the street asking for help cashing a check. The victim is asked if they could deposit the check at their ATM while withdrawing money for the scammer. Again, the bank won’t find out for a few days that the check is fraudulent, and the victim is responsible for paying that money back to the bank.

  It is recommended if you come into contact with someone asking you to help them cash a check to call 911.