Learn more about the latest ESG updates from the SEC. ...
As more apps are created for transferring money, the use of paper checks has been declining. Despite this, criminals have increasingly targeted personal mailboxes and postal service collection boxes with the goal of finding paper checks to potentially utilize in check washing fraud schemes.
Check washing is a type of fraud that occurs when a stolen check is treated with chemicals, such as nail polish remover, to remove dollar amounts and the name of the payee. Typically, lawbreakers replace the information with larger sums of money and a different recipient before cashing the check into an account they control.
According to the Financial Crimes Enforcement Network, the Postal Inspection Service received more than 299,000 complaints of mail theft between March 2020 and February 2021, an increase of 161 percent from the previous year.
Check washing issues can arise for either outbound and inbound checks and can affect both individuals and businesses. Some common ways criminals steal checks include:
Stealing checks may also lead to additional fraud in terms of how criminals need to cash the checks. For instance, the stolen checks could have been written for personal reasons, tax refunds, business, etc., but in order to cash those checks, criminals may have to go to great lengths to steal the identity of the recipient or even create a fake business with a similar name.
There are a number of ways to minimize the risk of check washing or how to catch it early, including:
If you think you or your organization has been the victim of check washing, contact your bank immediately. Also, contact the intended recipient of the check to let them know what happened, since the perpetrators may have been operating in their local area and other payments they were expecting could be affected.
Schneider Downs Business Consulting delivers sophisticated consulting services to meet the complex needs of today’s business environment. Our team features experienced professionals across a diverse array of specialties that allows us to help our clients make more informed business decisions across every facet of their operations.
To learn more, visit our dedicated Business Consulting page.