BBB Warning: Watch out for Check Washing!

A Podcast by BBB of the Tri-Counties

A BIG thank you to Ayers Automotive Repair in Santa Barbara

Welcome to this week’s edition of Your Moment of Trust! Check use may be declining,
but check fraud is still a serious problem. Watch out for this scam, dubbed “check
washing,” which involves stealing checks from mailboxes and then altering them.
Fortunately, you can do a few things to protect yourself and your business.

How the scam works:

You send a check in the mail as payment for a service or product. However, a few days
or weeks later, you are contacted by the company you paid. They say they never
received a payment. Then, you discover the check you sent has been cashed, either for
the amount you wrote it for or for a much higher amount. What happened?
Scammers use many techniques to intercept mail, sometimes directly from your or the
post office’s big blue mailbox. Scammers have even been known to sneak into post
office boxes with stolen keys. Individuals can fall victim to this scam, but scammers
mostly target businesses, which typically write checks for larger amounts and have a
predictable schedule for paying and mailing bills.  Once scammers find an envelope containing a check, they use household chemicals to “wash off” the name and amount you wrote down, replacing it with a name and dollar amount of their choice. Usually, they use fake identities to cash the check later on. And even if no one cashes your check, you are at a much higher risk of identity theft once it's found its way into scammers' hands.

How to avoid check-washing schemes

● Take advantage of electronic payment methods. If you can use electronic means
to make payments and receive them, do so. That will eliminate the possibility of
falling victim to check washing.

● If you must mail a check, take precautions. Drop it off at the post office using the
lobby mail slot instead of leaving a check in the mailbox with the flag up. If you
need to use a blue box, drop off the mail before the day’s last pick-up time. Don’t
leave unsent mail in your mailbox overnight; retrieve your delivered mail
promptly, advises the United States Postal Service.

● Put a hold on your mail. If you are going out of town, have your mail held at the
post office until you return. If you run a small business that isn’t open on
weekends, consider asking the post office not to deliver mail on Saturdays.

● Improve your mailbox security. Installing highly visible cameras near your mailbox
and using a locked mailbox are two additional ways to avoid falling victim to this
scam.

● Keep an eye on your checking account. Monitor your bank accounts carefully to
ensure no one cashes a fraudulent check from your account. If you notice
suspicious activity, notify your bank immediately.

● Use “positive pay” services. Many banks offer “positive pay” services for business
checking accounts. You can pre-authorize checks for a specific amount by their
check number. This will at least stop scammers from withdrawing more money
than the specified amount.

● Always report check fraud. If you think your check was intercepted in the mail, let
your bank know right away. Then, file a report with the Postal Inspection Service
and your local police department.

For more information:

Read about more ways scammers use checks to commit fraud in BBB’s Fake Check Scams
Study. Get more advice on how to avoid scams at BBB.org/AvoidScams.
If you’ve been a victim of check fraud, you can also report it to BBB.org/ScamTracker.
Your reports help build public awareness and reduce scammers’ effectiveness.

Until next time!