Heads Up: Problematic Paper Payments
To say, “The check is in the mail,” is a joke. It plays on a convenient excuse to put off debt collectors by implying that you sent your payment – they just haven’t received it yet.
What isn’t funny is check fraud.
The New York Times reports that check fraud is escalating, including checks from letters snatched from individuals’ mailboxes and those wrestled from assaulted mail carriers.
Criminals use nail polish remover or other materials to “wash” the ink from checks – except for the signature. Then they rewrite the checks to make them payable to their own accounts or sell them to others. They even alter the amounts of the check.
Beginning in January, Pershing LLC is imposing a $2 monthly paper subscription fee on clients who are not yet receiving all communications electronically. Pershing, the clearinghouse used by Landaas & Company, also will charge $10 annually per account for paper tax documents that clients receive. To avoid fees, clients should log in to their NetXInvestor account and go to Communications > Settings > e-Delivery Preferences.
Read more. Learn more.
According to the Federal Reserve Bank of Boston, financial institutions reported more than 680,000 cases tied to check fraud in 2022, nearly double the total from the year before, with expectations for even more in 2023, costing about $24 billion.
Here are some tips on more careful check writing:
- Use the entire “Pay to the Order of” line so no one can add another name.
- Use the entire line for writing in the amount in words and numerals.
- Sign checks the same way every time.
- Use a gel pen, which can be harder to wash.
- Mail checks at the post office or hand them to a carrier rather than leaving them at your mailbox.
- Consider paying extra for certified mail or similar tracking options for large and important checks.
- Monitor and balance checking accounts regularly to catch discrepancies.
- Consider using Informed Delivery from the U.S. Postal Service, a free option that sends you a picture of your mail before it’s delivered.
- Whenever possible, instead of sending checks, switch to secure electronic payment methods.
Sources: Writing Checks Can Be Risky. Here’s How to Protect Yourself, from The New York Times; Why is check fraud suddenly rampant? from the Federal Reserve Bank of Boston
Joel Dresang is vice president-communications at Landaas & Company.
(Heads Up is an occasional alert on consumer and investment scams.)
Check Fraud: A Guide to Avoiding Losses, from the Office of the Comptroller of the Currency
FinCEN Alert on Nationwide Surge in Mail Theft-Related Check Fraud Schemes Targeting the U.S. Mail, from the Financial Crimes Enforcement Network
Check Fraud, First-Party Fraud to Rise in 2023, from BankInfoSecurity
Check Washing Makes a Comeback; Here’s How to Protect Yourself, from Consumer’ Checkbook
-- (initially posted Jan. 26, 2024)