By Lane Montz
Better Business Bureau
Summer is in full swing, and I hope you are reading this on a well-deserved summer vacation. I don’t want to ruin your vibe, but I’m writing to warn you – check-washing is back with a vengeance and you ARE at risk if you still mail paper checks to pay bills. If you don’t already know, check-washing is when thieves steal paper checks, chemically erase the payee’s name, replace it with a fake name, and electronically deposit the newly forged check into their own (fake) account. They also usually rewrite the amount to be much larger. This crime has always been around, but it’s exploded in the past 18 months as a favorite of large crime rings. The FTC’s Consumer Sentinel Report and the U.S. Postmaster have both issued warnings, and the U.S Treasury’s Financial Crimes Enforcement Network wants people to stop mailing paper checks entirely. I predict check-washing will be the top scam of 2023.
You can be sure check-washing is not some big-city or overseas problem – it’s hitting close to home. Back in May I sent out a Scam Alert to BBB members warning about the meteoric rise of this crime. Several businesses immediately wrote me back to say this already happened to them and even our own BBB recently had a paper check stolen and washed, forcing us to adopt a variety of new check security measures, including making more online payments and only mailing paper checks inside the post office. However, the protective measure I like best is the Positive Pay system through our bank. Positive Pay is an internet-based app that temporarily stops each outgoing bank transaction until the business account holder logs in and affirmatively approves the transaction. For the cost of a few extra minutes each morning, we review and approve every expense before the transaction goes through, and it’s already paid off. In the first 2 weeks, we discovered – and stopped – a fraudulent ACH transaction. The next week a new one appeared under a different fake vendor name. We immediately and permanently rejected that one, too. Several more have appeared and been rejected and, best of all, no more forged checks. The savings has already outpaced the cost of our time.
Sadly, we expect these attempts to steal our money will continue indefinitely. If you haven’t been targeted yet (and maybe you have been but didn’t catch it) , prepare yourself. Either way, I strongly recommend you find ways to reduce or eliminate paper checks, including talking with your bank about how to implement precautionary measures like Positive Pay. Keep your money this summer … and your cool.
Lane Montz is president and chief executive officer of Better Business Bureau® and Better Business Bureau Ethics Foundation, Inc. in Toledo.
