Scamraiders

CHECK WASHING SCAMS – TAKING YOU TO THE CLEANERS

Check fraud is a trend which seems to be on the uptick. If you put a check in your mailbox to pay a bill, you could be at risk for check washing scams.

In 2007, a report from the United States Secret Service estimated that check fraud cost the United States financial systems $5 billion a year. Check washing is thought to account for almost $815 million worth of that total.

The scam itself is pretty simple. The crooks steal mail from residential mailboxes in an effort to find outgoing bill payments. Once they have procured the victim’s check, they are able to erase the ink on the check with common household cleaning products or any number of items found on the shelves of the local hardware store or supermarket. Once the ink has been erased and the “payee” and “amount” portions of the check, they can change the recipient to themselves and increase the amount being paid to however much they desire.

Other con artists use the same tactics, but don’t actually wash the checks. Instead, they simply take the routing and account numbers, along with the victim’s name and address and create an entirely new set of checks on stock that can be found at many business supply stores.

But the check washers have the advantage since they preserve the victim’s original signature, which often fools banks into initially thinking these checks are valid. Many times, victims don’t even realize they have been stolen from until they receive their bank statement or get a past due notice for the bill they were trying to pay.

Often times the check washers work in gangs. In South Florida one of the biggest known check washing rings was busted after stealing the mail of 177 different people over the course of 14 months, washing the checks, and then cashing them to the tune of $650,000. The average amount of the fraudulent checks was about $400, but at times the scammers aimed a bit higher and changed a check for $2,000 to $24,000 which they successfully cashed. Over 110 gang members were arrested by the police for these crimes.

While many are paying bills online these days, if you are still dropping checks into the mail here are tips that should help you protect your bank account:

— Install a locked mailbox or mail bill payments with included checks at the post office or drop them in an official post office box.

— If you do end up putting a bill payment in your mailbox, do not leave them there overnight. This is prime time for scammers to try attempt stealing mail, especially when they see the red flag raised. If you must use your home’s mailbox, put the bills out shortly before the mail carrier’s normal arrival time, or better yet, take it out to your mail carrier personally. The best bet though, as stated above, use a post office or official mailbox.

— Check with your bank or the company that provides your checks to see if there are any extra security features available that help combat counterfeiting and check alterations.

— Store checks, deposit slips, cancelled checks and bank statements in a secure and and/or locked location. Never leave a checkbook in your car or out in the open.
— Be sure to reconcile your bank statement promptly, within 30 days of receipt. Some banks might have a time period after which you will be liable for any fraud you didn’t spot right away.

— Never share your account number with strangers, especially over the phone. This is the backbone of many frauds, some of which we have covered on Scamraiders in the past. Unsolicited phone sales are often a red flag.

— Upon receiving a new order of checks, check them immediately to make sure they are all there. If any are missing or they do not arrive in a timely fashion, contact your bank. A fresh batch of checks with your name, address and bank account information is a great resource for a scam artist.

— If your house is burglarized make sure your check supply has not been breached. And inspect closely, smart criminals will often only take one or two checks from the back or middle of the checkbook. The victim won’t notice they are missing for some time, and the more time given the better chance the crook will pull off a successful fraud.

— Limit the amount of personal information on your checks. Never include your social security, driver’s license or telephone number. A scammer can use this information to impersonate you and open up new credit card accounts or apply for a loan.

— When paying your credit card bill, do not include your credit card number on the check.

— Never make checks payable to cash. If this type of check is lost or stolen, a crook will find a way to easily cash it.

— Don’t endorse checks for deposit until you are ready to hand them over to the bank. The information can be lost or stolen and the deposit rerouted to a scammers bank account.

— There are pens available that are specifically designed to help prevent check washing. Gel pens, like the UniBall 207, can be bought cheaply and make check washing difficult by trapping color particles onto the paper during signing.

These days we often work ourselves into a frenzy over high-tech crimes and many are hesitant to bank or pay their bills online for fear of fraud. We should remember, scams come in all forms, and sometimes the old fashioned frauds are just as effective as those on the cutting edge. Take the time to protect yourself, and you might just save a lot of headaches and heartbreaks down the road.

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