Check Fraud Is Increasing. Here's How to Protect Your Money.

This Week's Quote:

“Tough times never last, but tough people do.”

                                  -Robert H. Schuller

You have most likely heard on the news about people breaking into the blue mail boxes and stealing people's mail.  Check fraud has been the main target from this outcome.  Below is an article to help keep you safe.

 -Belinda Stickle

Writing a personal check is among the most basic ways to pay the bills. It is also becoming riskier.

Paper checks are on the decline, but are still widely used. Americans sent out 11.2 billion checks in 2021, down 7.2% from 2018, according to the Federal Reserve. Checks remain a common method to make payments for rent, utilities, charitable donations, taxes and fees.

The risks of writing a check, however, are heightened as a result of higher levels of check fraud. More scammers are targeting mailboxes to snatch checks and then use chemicals to lift the ink so that new amounts and recipients can be written in.

This low-tech crime is causing some older people, small-business owners as well as those who don’t have a bank but prefer to cash paper checks to wonder whether they should still make payments via paper checks. Security analysts and fraud specialists say the rise of this fraud should give these people pause. For many transactions, digital payments offer better consumer protections.

“Checks have very few security features and are very easy to alter or counterfeit,” said Naftali Harris, chief executive of Sentilink, a fraud-protection company in San Francisco.

Banks filed 680,000 check-fraud reports in 2022, according to the Financial Crimes Enforcement Network, or FinCEN, part of the Treasury Department, nearly double the 350,000 fraud reports filed in 2021. In February, FinCEN issued an alert in collaboration with the U.S. Postal Inspection Service, the law-enforcement arm of the postal service, about the rise in check fraud.

Here’s what to consider before making payments by check, and ways to improve the security of your payments.

Limit the number of checks you write

Today, swindlers can deposit stolen checks on their phones without having to go to a bank. They can also duplicate and sell the stolen checks to third-party criminals.

If you’re uneasy about putting money into banks after failures at Silicon Valley Bank and Signature, WSJ’s Imani Moise explains there are other places to stash your cash. 

The simplest way to protect yourself is to keep the number of checks you write to a minimum, said David Maimon, a professor at Georgia State University and the director of its Evidence-Based Cybersecurity Research Group.

At the very least, try to send checks only to people you know. Mailing a check to friends and family is usually safer than sending one to a stranger, said Alicia Valentine, assistant vice president and cash-management officer at Florence Bank, which serves customers throughout western Massachusetts.

For person-to-person payments, consider paperless options such as Zelle, Cash App or Venmo, Valentine suggested.

Watch for unusual transactions

Keeping an eye on your bank account isn’t just good for budgeting, it can also help you spot any suspicious activity as soon as possible.

“People should go online and look at their bank account every single day,” said Greg Litster, president of SAFEChecks, a check-manufacturing company based in California.  

Since banks have to investigate every case, victims can wait as long as seven months to be reimbursed for a fraudulent check. Pay close attention around holidays such as Christmas, Memorial Day or Thanksgiving when banks are closed. These are the times when criminal activity creeps up since most people aren’t keeping track of their spending, and if they do notice anything, they most likely won’t be able to report it to the bank until after the holiday, Litster said.

Check-fraud activity also tends to increase during tax season when people are most likely to be writing or mailing checks to the state or federal government, Maimon said. Turn on notifications for when withdrawals are made from your account so that you can be alerted via email or text every time that happens. 

Since your checks contain personal information such as routing and account numbers, as well as your home address, they should be secured out of public view.

“People have become careless with how they preserve their checkbook,” said Hubert Klein, a fraud-investigations specialist at Eisner Advisory Group, a New York-based financial advisory firm. Leaving your checkbook out in the open can be as dangerous as leaving out your social-security card, he said.

Use pens with gel ink 

The type of pen you use to write your checks matters. Fraud specialists recommend opting for blue or black gel-ink pens and spelling everything out—from the name or title of the recipient to the dollar amount. Thanks to its chemical composition, gel ink, which is a little thicker than that used in a regular ballpoint pen, is permanent and harder to remove.

“Those are good because they actually seep into the paper a little bit so they are virtually impossible to erase without leaving physical marks that somebody altered the check,” Klein said. 

People tend to write checks in a rush, Klein said. He suggests slowing down and making sure everything on the check is complete, which includes filling out the memo line and writing out what the check is for.

“Never write a check payable to cash,” said Roxann Cooke, consumer-banking managing director at JPMorgan Chase.

Send checks directly from the post office

The worst thing to do is to leave the check you have written in the mailbox in front of your house with the red flag up, fraud-prevention experts say. Be wary of simply dropping a check into a blue USPS box, as swindlers have been attacking mail carriers and stealing their keys to get into big blue drop boxes.

To better protect your checks, seal them in windowless envelopes so others can’t see what is inside, Litster said. Criminals can tell which one is a check and which isn’t through the clear section of the envelope.

“It is a signal in the mailing food chain to ‘steal me,’” Litster said.     

Hand deliver any checks to your local USPS location and give it to a worker there, Valentine said. But when you can, it is always best to hand-deliver your check directly to the payee.  

Credit goes to Oyin Adedoyin. Published May 24, 2023 in the Wall Street Journal.
 
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This Week’s Author, Belinda Stickle

-until next week