Check scams are becoming increasingly common. In 2022, there were more than 680,000 claims of potential check fraud, nearly doubled from the previous year.1 While it may seem simple enough to send out a check, fraudsters are finding increasingly deceptive ways of taking your hard-earned money. With the rise of technology and online payment systems, there are new ways to send money quickly, securely, and without worry. Learn all about the different types of check fraud and how to prevent it.
It may be time to reconsider mailing your checks. The rise of check fraud has seen fraudsters going into mailboxes, pulling out checks, and “check washing” – a process where they use a household chemical to erase the payee and amount of the check, then replace it with their own name and desired dollar amount.2 Once the check is deposited and cleared, they withdrawal the money in cash.
While it’s always best to hand your check directly to the recipient, it’s not always possible to do so. When those situations arise, keep these helpful tips in mind to protect yourself from check washing.
If you do have to write a check: use indelible ink, put your check in the mailbox close to the mail carrier’s arrival, and always monitor your accounts. Your checks have all your personal information on them: your name, address, bank account information, and signature.3 This rise in check scams serves as an important reminder to remain vigilant about protecting your personal and financial information.
Remember: always report suspicious or unusual activity to your bank. If you think you've been a victim of check fraud, reach out to your bank as soon as possible.
A cleared check doesn’t always check out.
Take this scenario: Someone asks you to break a $20 in exchange for a few bucks. You give him or her the change, and then go buy gas with the $20 bill. But the cashier spots the bill as fake, and demands you pay up. Who’s to blame?
Checks can be counterfeit, too, and fake check scams are on the rise. Incidents of check-related fraud escalated 66% in 2021.
So how do they work? The criminal sends the victim a check to deposit – maybe as a contest winning – and asks for some money back. The victim deposits the check, sees that it has cleared, and sends the money.
Here’s the thing: Just like the alert cashier, the bank will eventually spot the bad check and eliminate the funds – and the victim is left holding an emptier bag.
Scammers know how to game the system that regulates banks. For example, banks are required to quickly make deposited money available – as soon as the next day if the check is for $225 or less.4 Yet it could take weeks for the bank to identify a check is fake, leaving plenty of time for the funds to be withdrawn and let the scammer get away.
In this scenario, the victim is stuck in the middle and could be responsible for reimbursing the bank.
Check fraudsters take many forms, targeting individuals as well as businesses. The check may be disguised as a prize, but the recipient must cover the taxes and fees. Or a check may exceed the price of a product and the “customer” will ask for the difference back. Even perceived job opportunities can be schemes, with a check sent as an advance, but requiring an activation fee.5
Think you’ve got a hot check? We compiled this checklist from the American Bankers Association and the Federal Deposit Insurance Corp.
✔ Rule out “Prank Bank.” A check from an unknown entity should be treated with skepticism. Verify the source. Ensure the check was issued by a legitimate bank, but note that some counterfeit checks will include a real bank’s name. The FDIC’s BankFind tool lists FDIC-insured institutions.
✔ Address the marks. Scammers may replicate money orders and cashier checks. If the check was mailed, be sure the postmark is of the same city and state as the issuing bank. Also, official checks often carry watermarks, security threads, or other protective features.
✔ Make it official with a ring. If a legitimate bank is listed, call it directly to verify the check. Look up the bank’s number on its website – the number on the check might belong to the fraudster.
✔ Second guess anything that looks “two eazy.” If the sender communicates in writing, look for poor grammar or misspellings.
If you think you or your business is being targeted by a financial scam, seek assistance immediately. These agencies can help.
The Federal Trade Commission at FTC Complaint Assistant.
The U.S. Postal Inspection Service, if the scam involves the mail.
State protection can be found at The National Association for Attorneys General, which lists state attorneys general.
For online crimes, file a complaint with the Internet Crime Complaint Center.
1 "Check Fraud is Up: 4 Steps to Protect Yourself,” Old National, June 2, 2023; https://www.oldnational.com/resources/insights/check-fraud-is-up-4-steps-to-protect-yourself/
2 "Mailing a Check? You May Want to Reconsider," Community First Credit Union, June 21, 2023; https://www.communityfirstcu.org/cfcu-you/blog/2023/6/mailing-a-check-you-may-want-to-reconsider
3 "Check Fraud is Up: 4 Steps to Protect Yourself,” Old National, June 2, 2023; https://www.oldnational.com/resources/insights/check-fraud-is-up-4-steps-to-protect-yourself/
4 “I deposited a check. When will my funds be available / released from the hold?” HelpWithMyBank.gov; https://www.helpwithmybank.gov/help-topics/bank-accounts/funds-availability/funds-availability-check.html
5 “FDIC Consumer News: Beware of Fake Checks,” FDIC, August 2019; https://www.fdic.gov/consumers/consumer/news/august2019.html
6 "Fake Check Scams Cost Consumers $1.2 Billion a Year Annually,” by Frank McKenna, March 19, 2020, FrankonFraud, https://frankonfraud.com/fraud-trends/fake-check-scams-cost-consumers-1-2-billion-yearly/
The information on this page is accurate as of November 2023 and is subject to change. First Financial Bank is not affiliated with any third-parties or third-party websites mentioned above. Any reference to any person, organization, activity, product, and/or service does not constitute or imply an endorsement. By clicking on a third-party link, you acknowledge you are leaving bankatfirst.com. First Financial Bank is not responsible for the content or security of any linked web page. Member FDIC / Equal Housing Lender.
You are about to go to a different website or app. The privacy and security policies of this site may be different than ours. We do not control and are not responsible for the content, products or services.
Online banking services for individuals and small/medium-sized businesses.
If you haven't enrolled yet, please enroll in online banking.
f1RSTNAVIGATOR is where our business clients can access tools to help manage day-to-day account activity.
Sign in now to access your account, or download the new app by searching "Your First Financial."