What Is Check Washing Fraud?

Check washing fraud is a type of financial crime where criminals steal checks, erase the original details, and rewrite them to cash out large sums of money. This process involves several steps:

• Stealing Checks: Thieves may steal checks from mailboxes or postal service collection boxes.
• Washing Checks: Using chemicals, criminals remove the payee information and amount while keeping the signature intact.
• Rewriting Checks: The washed checks are then rewritten with new payee information and inflated amounts.
• Depositing Checks: Criminals deposit the altered checks into bank accounts, often using fake identities or money mules.
• Withdrawing Funds: Once the check clears, the funds are quickly withdrawn or transferred to hide their origins.

How to Avoid Check Washing Fraud

There are several steps you can take to protect yourself from check washing fraud:

Use Electronic Payments

One of the best ways to avoid check washing fraud is to stop using checks altogether. Opt for electronic bill pay services, direct bank transfers, or peer-to-peer payment apps.

Use a Black Gel Pen

If you must write a check, use a black gel pen with ink that is harder to wash off. Some pens, like Uni-Ball pens with Super Ink, offer fraud protection.

Drop Checks at the Post Office

Minimize the risk of theft by mailing checks directly from the post office rather than leaving them in a mailbox or collection box.

Retrieve Mail Daily

Check your mailbox daily to reduce the chance of mail theft. You can also sign up for USPS Informed Delivery to receive email notifications of incoming mail.

Request a Mail Hold When Traveling

If you’re going out of town, request a USPS mail hold to prevent mail theft while you’re away.

Monitor Your Checking Account

Regularly review your checking account for any unusual or unexpected withdrawals. Early detection can help mitigate the damage.

What to Do if Your Money Is Stolen

If you suspect that a check has been stolen or altered, contact your bank immediately. They may be able to put a hold on the check to prevent further fraud. If the check has already been cashed, report the fraud to your bank and file a police report. Banks are generally required to reimburse customers for forged checks, but the process can be lengthy and complicated.

To escalate the situation, you can reach out to the bank’s regulator. Use the search tool at HelpWithMyBank.gov to find the appropriate regulator for your bank or credit union.

Monitor Your Credit for Identity Theft

Check washing fraud can also lead to identity theft. Regularly check your credit report and consider using a credit monitoring service with free alerts, like the one from Experian. Identity theft protection services can also help monitor your information and assist with identity restoration if needed.