I admit it. I used to love writing checks. I enjoyed the ritual of carefully tearing one off from its packet, filling it out, signing it with a flourish and recording the information in tiny print in a check register while my favorite Phish songs played in the background.
When I was down to my last box, I confess I spent far more time than I should have on check reordering web sites. Browsing screen after screen of artistic and whimsical check designs. Agonizing over text font choices. All in the hope of creating an ideal combination that reflected the impression I wanted my checks to make on the family member, mortgage company or cable TV provider who received them.
But those days are long gone. My few remaining boxes of checks now gather dust in my file cabinet.
That’s because, with very few exceptions, I pay for just about everything electronically.
And whenever I’m tempted to send a check to someone, I remember the warning recently issued by the U.S. Postal Service:
Avoid sending checks by mail if you can. If you must mail them, don’t drop them off anywhere other than in the lobby of your local post office.
Why? Because over the past few years there’s been a growing epidemic of thieves breaking into neighborhood mailboxes and stealing payment letters with checks in them.
These thieves have also become more brazen about stealing checks from letters delivered to people’s homes.
It makes you wonder why, in this digital era, when identity theft and other kinds of fraud result in more than two million cases of compromised online transactions each year, are some criminals resorting to such old school thievery?
Old scam with a new spin
In the “olden days” when I was growing up, check fraud was relatively simple. Someone would steal a check from your mailbox, forge your name on the back, and cash it at their local bank.
Few people can get away with this lone-wolf method today. Most banks only cash checks for people who have accounts with them. And just about all of them require recipients to present a valid form of ID.
So what are today’s check stealers doing instead?
Less-sophisticated thieves use a technique called “check washing,” where they apply chemicals to a check to erase the payee’s name and check amount and then fill it in with new information, keeping the account owner’s original signature.
More technologically sophisticated criminal gangs simply scan a stolen check’s design, account owner information, bank logo, text, and routing and account numbers and recreate them using imaging software.
Print them out using a high-quality digital color printer and commercially available blank check paper (easily available online) and, voila! Thieves now have their own stock of blank checks that are almost indistinguishable from the real thing.
After writing checks of various amounts made out to phony recipients, they hand them off to mules, armed with fake IDs, who fan out across the region to cash them at local check-cashing joints.
Or, if gangs don’t want to get their hands dirty cashing these fake checks themselves, they’ll simply sell them to other criminals who are willing to take on the risk.
Savvy check thieves can also be very selective in choosing victims. They’ll scrutinize every check they’ve stolen closely and Google the account owner to figure out which candidate is most likely to have the largest checking account balance and least likely to notice money that’s missing. An elderly widow making a four-figure mortgage payment is a more attractive “mark” than a 30-year-old barista sending a $10 birthday check to their nephew.
How rampant is check fraud?
In 2022, banks reported 680,000 cases of check fraud, up from 300,000 in 2021. That might not seem like a lot, but keep in mind that the number of check transactions dropped from 14.5 billion in 2018 to just 3.4 billon in 2022.
How to break your checkwriting habit
If you’re used to paying for just about everything by check, now may be the time to start breaking the habit.
Use credit cards, debit cards or even cash instead of checks at stores (the people standing in line behind you will be very grateful). Consider signing up for digital payment services like PayPal, Venmo or Zelle to pay contractors, landscapers or cleaning people who accept these kinds of payments.
Next, make greater use of your bank’s online bill payment application. It’s ideal for making credit card payments and you can set it up to make automatic payments for unchanging recurring expenses, such as monthly mortgage or auto loan payments. Since payments are generally made using electronic fund transfers from your checking account, there's no paper trail.
Try to limit the use of checks to situations where you personally hand them over to people you know. If you still must send checks through the mail, avoid neighborhood mailboxes and drop them off in the lobby of your local post office or hand them to a postal worker.
Then check your online account every few days until you see that the check has cleared.
And take advantage of your bank’s online alert feature. You can set them up to text or email you if your account balance drops below a certain level or if there’s a sudden spike in account transactions or very large unexpected transactions occur.
If you become a victim of check cashing or other bank fraud
You’re not liable if criminals use fake checks to steal funds from your account. And your bank must reimburse your losses.
However, to qualify for reimbursement, you generally must report this fraudulent activity within 30 to 60 days of receiving your last bank statement, depending on the banking laws in your state.
And your bank will have to investigate the fraud to determine who is responsible for allowing it to occur—your bank, the bank or cash checking operation that cashed the check, or a combination of these institutions. It could take weeks or months for your account to be made whole again.
Which is why you may want to avoid this risk altogether by joining me in bringing your remaining checks to your local shredding service and saying goodbye to yet another noble tradition that technology and crime have made obsolete.
This article was authored by Chris Gullotti and Jeffrey Briskin. Chris is a financial advisor and Partner located at Canby Financial Advisors, 161 Worcester Road, Framingham, MA 01701. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at 508.598.1082 or firstname.lastname@example.org. Jeffrey Briskin is Director of Marketing at Canby Financial Advisors.
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