The FBI and U.S. Postal Inspection Service are warning that check fraud is on the rise, with a significant volume enabled through mail theft. Reports related to check fraud have nearly doubled from 2021 to 2023. Fraudsters take advantage of regulations requiring financial institutions to make check funds available within specified time frames, which is often too short a window to identify and stop the fraud. As a result, the compromised checks clear, and the funds are withdrawn by the criminal participants before the fraud is detected.
Obtaining the Checks
Fraudsters gain access to legitimate checks and sensitive financial data by stealing mailed checks from USPS facilities or during delivery to the intended recipient. Check theft occurs several ways.
- Checks left in residential mailboxes overnight or for long periods of time.
- USPS blue collection boxes after the last pickup time.
- Burglary of USPS facilities.
- Robbery of USPS employees.
- Bribery/collusion of USPS employees.
Preparing/Altering the Checks for Deposit
To make the checks appear legitimate, fraudsters use check washing or other check "cooking" techniques to alter checks or create counterfeits. in other instances, checks are unaltered and deposited with forged endorsements. Check washing involves the use of chemicals to physically alter the check, typically altering the original payee and financial amounts. In many cases, financial institutions, consumers, and law enforcement agencies are not aware of the fraudulent activity until after funds have been illicitly withdrawn.
Who is Harmed by Check Fraud?
Businesses - Businesses could experience disruption to business activities and reputational harm due to overdue or missed payments or delays or disruption in finalizing payments when account details are compromised.
Consumers - Consumers can experience impacted credit scores for late payments for bills, account closures, stop payment fees for other outstanding checks, missed interest from refund checks, compromised personally identifiable information which may also be sold in subsequent fraud schemes, and loss of assets or investment money. Victims of fraud are often refunded some of the charges, but refunds are often delayed until investigations are complete.
Governments Entities - Funds intended for citizens are intercepted and altered or forged, resulting in government funds being dispersed incorrectly. It can be a time intensive process to investigate and reissue payments to the rightful recipients of intercepted checks.
How to Protect Your Mail
- Pick up your mail promptly after delivery. Do not leave mail in your mailbox overnight for for long periods of time.
- If you are heading out of town, submit a USPS Hold Mail request asking your local post office to hold your mail until your return.
- Sign up for Informed Delivery at USPS.com to receive daily email notifications of incoming mail and packages.
- Contact the sender if you do not receive a check, credit card, or other valuable mail you are expecting.
- Consider buying and using security envelopes to conceal the contents of your mail.
- Use the letter slots inside your local post office to send mail. If using a blue USPS collection box, be sure to drop your mail as close to the posted pickup time as possible and before the last collection of the day.
How to Protect Your Checks
- Use pens with indelible black ink so it is more difficult for a criminal to wash your checks.
- Don't leave blank spaces in the payee or amount lines.
- Don't write personal details, such as your Social Security number, credit card information, driver's license number, or phone number on checks.
- Use mobile or online banking to access copies of your checks and ensure they are not altered. While logged in, review your bank activity and statements for errors.
- Consider using online bill payment, ACH payments, and other electronic and/or mobile payments.
- Protect vulnerable members of your family and community. Fraudsters use high-tech, low-cost technology including printers, call spoofing technology, and AI-assisted voice recreation to trick vulnerable people into acting as unwitting accomplices.
Note: Source for this information was FBI and USPIS Public Service Announcement. Alert Number: I-012725-PSA.