Check Washing: A Type of Check Fraud

Check Washing is a specific type of check fraud involving stealing and altering checks by removing ink with chemicals.

Definition

Check washing is a specific type of check fraud in which a perpetrator steals a check, removes the ink used to fill out the details (such as the payee and amount) with chemicals, and then rewrites the check with new information. This fraudulent activity enables the criminal to cash the check or deposit it into an account under their control, thus stealing money from the original account holder. The term “washing” refers to the chemical process used to erase the ink.

Understanding Check Washing

Process of Check Washing

• Theft of the Check: The perpetrator first steals a physical check. This can occur through various means, such as mail theft, trash diving, or even stealing from a checkbook.

• Chemical Erasing: The stolen check is treated with chemicals, like acetone, bleach, or nail polish remover, to dissolve and remove the ink. The amount of time required to erase the ink depends on the type and quality of the ink and paper of the check.

• Rewriting the Check: After the original details are removed, the fraudster rewrites the check with new information, such as a different payee or increased amount.

• Cashing/Depositing: Finally, the altered check is cashed or deposited, allowing the perpetrator to illegally obtain funds.

Chemicals Involved

The chemicals typically used in check washing include:

• Acetone
• Bleach
• Nail Polish Remover
• Alcohol-based solvents

These substances are chosen for their ability to dissolve ink without significantly damaging the paper.

Security Measures to Prevent Check Washing

• Special Inks: Use of gel-based or permanent inks that are resistant to chemical removal.

• Watermarks and Security Features: Incorporating watermarks, holograms, or other security features that make checks harder to alter.

• Bank Notifications: Regularly reviewing bank statements and using online banking alerts to quickly identify unauthorized activity.

Historical Context

Check washing, while not new, has evolved with advancements in technology. In the past, such frauds relied heavily on physically intercepting checks during transit. Today, the integration of financial technology and physical security features presents a dual approach to combating such fraudulent activities.

Examples of Check Washing

1. A businessman’s check for $150 intended for a utility payment gets stolen from his mailbox. After altering the payee and amount, the thief cashes it for $1,500.

2. A personal check written for $50 as a birthday gift is intercepted, washed, and rewritten as a $500 payment to a fake company the fraudster controls.

Related Terms

• Check Fraud: Broad term encompassing various types of illegal activities involving checks, including forgery and counterfeit checks.

• Identity Theft: Often associated with check washing, as stolen personal information can be used for check alterations.

FAQs

How can I protect myself from check washing?

You can use gel pens for writing checks, employ banking alerts for any suspicious activities, and secure your mailbox or use secure drop-off locations for mailing checks.

What should I do if I suspect my check has been washed?

Immediately contact your bank to report the suspicious activity, cancel the check, and potentially report the incident to local authorities.

Are electronic transactions safer than checks?

Electronic transactions often have more security layers, such as encryption and fraud detection algorithms, making them generally safer than physical checks.

References

• Federal Trade Commission. “Protecting Your Checks from Fraud.” FTC.gov
• American Bankers Association. “Check Fraud Prevention Tool Kit.” ABA.com

Summary

Check washing is a fraudulent activity involving the theft and alteration of checks through chemical means. It poses significant risks, but awareness and proactive security measures can mitigate such threats. Understanding the intricacies of this type of check fraud can help individuals and businesses guard against financial losses.