Despite seeming retro, check fraud is experiencing a surprising resurgence, with criminals stealing billions of dollars through these schemes.
According to the U.S. Postal Inspection Service (USPIS), “check washing” fraud is inflicting substantial financial damage on Americans. Postal inspectors report intercepting more than $1 billion in fraudulent checks and money orders annually.
Despite the rise of digital financial transactions, thieves are increasingly targeting mail containing paper checks as a vulnerable point in the system.
Using common household supplies, scammers can modify stolen checks by removing the original information and substituting false details before depositing them under assumed identities. Below, we explain their tactics and how to protect yourself.
Check washing is a theft method where criminals steal checks, commonly from mailboxes, and use household chemicals such as nail polish remover or rubbing alcohol to erase the ink. After removing the original information, the thief changes the payee name and amount, cashes the altered check and escapes with the stolen funds.
This scheme, which has been around for decades, has seen a significant increase in incidents since 2021, with check fraud cases nearly doubling according to the FBI’s Internet Crime Complaint Center. Postal inspectors warn that this troubling trend is expected to worsen throughout 2025.
Criminal organizations have been identified selling stolen checks on digital platforms and recruiting individuals known as “money mules” to deposit falsified checks into fraudulent accounts, according to NASDAQ Verafin. In a contemporary evolution of this long-established fraud scheme, these stolen checks are now being traded on dark web marketplaces in exchange for cryptocurrency.
Real-world cases show just how quickly it can happen, and victims are losing thousands.
According to ABC7 NY, when Carol Perlman mailed a $656 check, criminals altered it to $9,000. Though her bank eventually refunded the money, they only did so after local media covered her story.
In the same ABC7 NY report, Matt Schick became a victim after depositing a contractor’s payment in a street mailbox. Within days, someone had intercepted and cashed it for $7,500.
Fortune magazine reported on entrepreneur Steve, who was stunned to discover that his $310,000 IRS payment never arrived. Thieves had chemically “washed” the check, replacing “IRS” with another name before depositing it. He was forced to pay his taxes again, including penalties and interest, while still fighting with his bank to recover the stolen funds.
These real-life examples demonstrate the devastating impact of check washing and the challenges victims face in recovering their money. While some people get their funds back quickly, many others endure months of waiting and uncertainty.
How can you protect yourself from becoming the next victim of this increasingly common scam?
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Although digital payments are popular, checks remain necessary in certain situations. If you still use checks, consider these protective measures to prevent check washing:
Avoid outdoor mailboxes: When sending important documents, such as checks, it’s advisable to use a post office for mailing rather than a standard mailbox.
Check your mail regularly: To avoid mail accumulation and safeguard your deliveries during absences, consider utilizing the USPS hold-mail service when you’ll be away from home for extended periods.
Write smarter: When completing important documents, it’s recommended to utilize gel or rollerball pens with permanent blue or black ink, as this makes alteration more difficult. Ensure you complete each field thoroughly, leaving no blank spaces.
Cover it up: To protect your financial information from potential mail theft, use security envelopes when sending checks. These specially designed envelopes feature patterns that prevent contents from being visible through the paper.
Go digital: Utilize digital payment options like bank bill-pay systems or mobile apps instead of sending paper checks through mail.
Keep an eye on accounts: Check your accounts regularly and set up transaction alerts to catch fraud early.
Act fast: Contact your bank, local police and the USPIS immediately if you’re a victim.
Check washing might seem like an outdated scam, but this fraud scheme continues to drain billions of dollars from unsuspecting victims, even in our digital era. This sophisticated con can catch even the most careful consumers by surprise. By remaining alert and opting for more secure payment alternatives when available, you can protect yourself from significant financial losses and avoid becoming another statistic.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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