Posted by We continue to hear stories about check washing scams causing major headaches. This scam happens to businesses more than you might realize, but it can also happen to you personally. And we have simple solutions to protect against both that we will share in this blog post!
If you don’t know what a check washing scam is, paper checks are stolen from the mail and then the checks are washed in chemicals to remove the ink. Once the check has been cleaned, the scammer writes in a new payee name and dollar amount. Then they fraudulently deposit or cash the check. Crazy, right?
Protect Your Business from Check Washing
The best way for businesses to protect against check washing is to enable Positive Pay on their banking accounts. We use Positive Pay at Home Rental Services and love the peace of mind we get, knowing that everything must line up before payments via check or ACH are executed.
Positive Pay is an automated cash management service used by businesses to prevent check and ACH fraud by matching issued checks against those presented for payment. The bank compares details like check number, amount, and account number; if they do not match the authorized list, the payment is flagged for review.
How it Works:
Companies send a file of authorized checks (issue date, check number, amount, payee) to their bank. When a check is presented, the bank verifies it against this list. If a check does not match (e.g., altered amount or forged check number), it is flagged as an exception. The company then reviews the item online and decides to either “pay” or “return” it.
Types of Fraud Covered:
Check Fraud: Prevents altered, forged, or counterfeit checks from clearing.
ACH Fraud: Sets rules to filter or block unauthorized electronic debits.
Payee Match: An additional layer that verifies the payee’s name matches the authorized list to prevent check washing.
You can also use pens with indelible black ink if you are filling out paper checks manually. (Most businesses print their checks.) And this is also the best practice for avoiding check washing scams with personal checks!
Protect Your Personal Checks from Check Washing
When writing personal checks, the simple way to combat check washing scams is to use a special pen that has indelible black ink. This makes it incredibly hard for the scammers to wash the check with chemicals. Odds are, the check will fall apart before the payee and amounts wash off!
You can get these pens on Amazon.com. Here is a link to a bunch of options.
The United State Postal Service recommends:
- Do not drop off your mail in collection boxes after the last scheduled pick-up.
- Do not leave your mail in your mailbox overnight.
- If you’re heading out of town, have the Post Office hold your mail.
We hope that this public service announcement about check washing has been helpful! If you are a business, please make sure you have Positive Pay enabled with your bank. And for your personal checks, indelible pens are a great way to protect your personal checks as well!
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