Check Washing Fraud and Protecting Your Business

Security in a business environment encompasses a wide variety of tactics, ranging from physical to technical and beyond.  Unfortunately, these defenses are sometimes a reaction to known threats, while the criminals continue to create new, unforeseen threats.  Protecting your business from this illicit activity often seems like a game of cat and mouse, but the more you know, the more secure you will be.

Check washing fraud, increasingly in the news, involves the theft of mailed checks (either through theft of a mail key or simply taking mail from an open box), which are then washed, literally, with nail polish remover to remove the payee name and amount.  The perpetrator then adds his own name and a new, larger amount, depositing the check in a compromised account.  Often, these thieves will place ads for online work-from-home jobs, promising the new hire that he or she only needs to deposit checks into their personal account, keeping a percentage, and to wire the remainder to the “employer.”  Furthermore, once these criminals have a routing and account number, creating additional checks is a simple feat.

What can a business do to protect itself from check washing?  Industry professionals, including the USPS, bankers, and lawyers, have suggestions:

  • Use security-tinted envelopes which ensure that the contents of the envelope are not visible to prying eyes.
  • Use a black gel pen, which will often note on its packaging that it is non-erasable.  Blue ink disappears more easily.
  • Fill in all open areas of the check, and do not leave payee name, date, or amount blank.  If there is extra space, use a line or Xs to fill in the space.
  • Drop your mail into a box at the post office.  Leaving it in a home mailbox that is easily accessible makes it much easier for your outgoing mail to end up in the wrong hands.
  • Use online bill pay when possible, thereby reducing the number of checks you write in the first place.  There are risks associated with paying bills online, but your IT/security company will be able to offer advice on secure payments.
  • Keep detailed records of the checks you do write, and be consistent in checking bank activity for cleared checks.  The sooner you contact your bank about any unusual activity, the more quickly and easily it will be cleared up.

Incorporating these simple habits into your bill-paying routine will keep your business from becoming a victim to these check-washing schemes.  If you have additional questions, don’t hesitate to reach out to us at SIP Oasis.