[NA] Check washing prevention

Let'sgoflying!

Let'sgoflying!

Touchdown! Greaser!
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Dave Taylor
I read about this all the time, I'm sure everyone here has too.
A paper check can have the payee and the amount changed through chemical baths etc..
So any check that sits in your (rural) outbox, or a recipient's inbox is at risk. Yes, minimal risk perhaps - until it happens to you it's not on your radar. The online victims' stories relate that the bank will not make you whole, they have no way of detecting this fraud.

I 'write' checks on my bank's portal. Probably 1500-2000/yr. Those to large corporations ie credit card payments are sent electronically; no paper checks to wash. Safe.
However the bank generates and mails paper checks to the other vendor/recipients.
So I type in the payee and the amount on my computer and their software saves this info after writing the paper checks.
I asked my bank CSR if their software compares what I typed in, to the payment request (the check the recipient presents for payment from my account) and was told nope, they can't.
I was surprised. What a simple task for a computer, considering the billions of other things like this that they easily do.
And what an easy way to prevent fraud on their customers.

Anyone have experience with check washing or fraud prevention in relation to this?
Does anyone have a bank that allows online check generation and then compares payee/amounts of presented checks, to those you typed in?
 
It's a problem. Lots of personal info on checks. It's probably as risky as the electronic funds being watched by some guy in Sao Paulo, or wherever. Crooks are everywhere. Electronic money just made it easier for them, with less or no risk. Paper is certainly easy to steal as well. Billions are spent every year trying to protect electronic money, but still companies with very big budgets get compromised all the time. The $20 in my pcket is the safest money I have. Yes my pocket can be picked, they get my $20 and it hurts my ego, my bank account gets hit and they get how many thousands in only a moment, probably with no possibility of ever any consequences. So pick your risk.
 
Our company bank (PNC) alerted us to a possible problem with a $10,000 check. Not sure what triggered the warning, but the check image showed it was washed and they made us whole. We later got a notice from our local post office that mail was being stolen (fished out of the boxes) from the USPS mailboxes in our business park. We only drop checks in the inside boxes at the post office anymore. Hopefully we can trust the postal workers.
 
Let'sgoflying! said:
I read about this all the time, I'm sure everyone here has too.
A paper check can have the payee and the amount changed through chemical baths etc..
So any check that sits in your (rural) outbox, or a recipient's inbox is at risk. Yes, minimal risk perhaps - until it happens to you it's not on your radar. The online victims' stories relate that the bank will not make you whole, they have no way of detecting this fraud.

I 'write' checks on my bank's portal. Probably 1500-2000/yr. Those to large corporations ie credit card payments are sent electronically; no paper checks to wash. Safe.
However the bank generates and mails paper checks to the other vendor/recipients.
So I type in the payee and the amount on my computer and their software saves this info after writing the paper checks.
I asked my bank CSR if their software compares what I typed in, to the payment request (the check the recipient presents for payment from my account) and was told nope, they can't.
I was surprised. What a simple task for a computer, considering the billions of other things like this that they easily do.
And what an easy way to prevent fraud on their customers.

Anyone have experience with check washing or fraud prevention in relation to this?
Does anyone have a bank that allows online check generation and then compares payee/amounts of presented checks, to those you typed in?
Click to expand...
The bank can do this, and likely does for corporate customers. Positive Pay has been around since even before all checks cleared electronically. Ask for it by name and see what they say. It's possible they're already doing it on the checks they generate.

www.investopedia.com

Positive Pay: What It Is, How It Works, vs. Reverse Positive Pay

Positive pay is a banking service used to match the checks a company issues with those it presents for payment. Learn how it is used to deter check fraud.
www.investopedia.com www.investopedia.com
 
Lon Stratton said:
Our company bank (PNC) alerted us to a possible problem with a $10,000 check. Not sure what triggered the warning, but the check image showed it was washed and they made us whole. We later got a notice from our local post office that mail was being stolen (fished out of the boxes) from the USPS mailboxes in our business park. We only drop checks in the inside boxes at the post office anymore. Hopefully we can trust the postal workers.
Click to expand...
In a recent presentation by a bank it showed several examples of USPS employees being charged with various kinds of fraud involving checks in the mail.
 
SoonerAviator said:
Why not just do ACH payments instead of doing electronic checks?
Click to expand...
That works if your bank has the information for ACH. If they don't, they print and mail a check. My utility bills, for example, are paid by ACH; my hangar rent and my dentist are not. They get bank-printed checks in the mail.
 
DaleB said:
That works if your bank has the information for ACH. If they don't, they print and mail a check. My utility bills, for example, are paid by ACH; my hangar rent and my dentist are not. They get bank-printed checks in the mail.
Click to expand...
Right, but that's a simple task as a vendor. You send them an ACH form to fill out and they get their money instantly versus messing with a check. 99% of businesses/people prefer that in my experience.
 
SoonerAviator said:
Right, but that's a simple task as a vendor. You send them an ACH form to fill out and they get their money instantly versus messing with a check. 99% of businesses/people prefer that in my experience.
Click to expand...
They should. In a decently run business they do. I’m not going to try to chase down the likely nonexistent person at the airport authority that will fill out a bank form. Try having that conversation with the receptionist at your dentist’s office and see whether or not you get a blank look. When I start getting paid to provide business consulting services to small businesses, I’ll absolutely tell them to make it easier for people to pay them by secure means, and help them do it.

Shorter answer is, though, that in over 40 years of writing checks I’ve never personally witnessed a check washing issue, nor do I personally know anyone who has. We physically write maybe half a dozen checks a year, and use ink that is difficult to wash. If my bank sends a check that gets processed for an amount different than what I authorized… we’ll have a conversation about whose problem that is, but having worked in the finance industry for 25 years and banks for the past 20, I can tell you - it’s theirs.
 
DaleB said:
They should. In a decently run business they do. I’m not going to try to chase down the likely nonexistent person at the airport authority that will fill out a bank form. Try having that conversation with the receptionist at your dentist’s office and see whether or not you get a blank look. When I start getting paid to provide business consulting services to small businesses, I’ll absolutely tell them to make it easier for people to pay them by secure means, and help them do it.

Shorter answer is, though, that in over 40 years of writing checks I’ve never personally witnessed a check washing issue, nor do I personally know anyone who has. We physically write maybe half a dozen checks a year, and use ink that is difficult to wash. If my bank sends a check that gets processed for an amount different than what I authorized… we’ll have a conversation about whose problem that is, but having worked in the finance industry for 25 years and banks for the past 20, I can tell you - it’s theirs.
Click to expand...
I agree. I just mean that in the OPs case, processing 2,000+ checks per year might be better served by getting those onto ACH so that there is no physical check needed. Especially when those 2,000 checks may only be going to 100 vendors. Reduces the risk down to those vendors who still prefer physical checks.
 
SoonerAviator said:
I agree. I just mean that in the OPs case, processing 2,000+ checks per year might be better served by getting those onto ACH so that there is no physical check needed. Especially when those 2,000 checks may only be going to 100 vendors. Reduces the risk down to those vendors who still prefer physical checks.
Click to expand...
You’d think the bank sending the check would include a form, or a URL, and instructions for the recipient to set this up - especially once they’ve mailed multiple checks to them.
 
Going through this fiasco right now. We have close to 1,000 customers in our system. Our bigger clients are ACH. But some customers, it might be 5 years in between jobs. Not sure how they got them, but on at least 2 occasions we've had checks made out to us go missing, luckily none of our own. One customer said their bank questioned a transaction, customer told them it WAS NOT legit. Bank deposited it anyway, then put a hold on their account when they told the bank they (the bank) effed up. Another customer said their bank is supposed to match totals, didn't work.

We were actually notified by a police department south of the city after they found a check made out to us during a traffic stop. The guy admitted he gets the check from someone, then sells them to someone else for 20 bucks. After this happened we became paranoid about getting the mail. Even on Saturday, I'll go in shortly after to get it.

It's happened at least one more time since. We're beginning to think it's a postal employee with how careful we've been getting the mail. I can't help but think the mobile banking and deposit by taking a picture only exacerbates the issue.

Filing a police report is an exercise in futility. It's like they just throw up their hands. Dude, here's the name of the person and a bank account to who deposited the check. What else would you like?

"Well, we don't actually know where it was taken from...it could have been your mailbox or there's and I don't know who's jurisdiction it should be"

Me: SOMEONE GET ME A HAMMER!!!
 
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We had one of our customers defrauded by this scheme, on a check sent to us, to the tune of $20k. She notified the police, a requirement for the bank, and they made good on it, though it took a couple of months. She was undergoing cancer treatments at the time as a kicker.

We felt horrible. We no longer accept personal checks by mail, only ACH, Zelle, CashApp or Bill Pay checks generated by a Bank. When we explain, everyone is on board. I only pay using the same methods, and on the occasions where I must send a check, I walk it into the post office.
 
DaleB said:
You’d think the bank sending the check would include a form, or a URL, and instructions for the recipient to set this up - especially once they’ve mailed multiple checks to them.
Click to expand...

That’s not something a bank can do, the bank doesn’t own the account, the person owns the account. The bank is simply performing the action directed by the account owner.

Some banks do charge a fee for a bank check, some will charge a mailing fee, and some will charge both.
 
Lindberg said:
The bank can do this, and likely does for corporate customers. Positive Pay has been around since even before all checks cleared electronically. Ask for it by name and see what they say. It's possible they're already doing it on the checks they generate.

www.investopedia.com

Positive Pay: What It Is, How It Works, vs. Reverse Positive Pay

Positive pay is a banking service used to match the checks a company issues with those it presents for payment. Learn how it is used to deter check fraud.
www.investopedia.com www.investopedia.com
Click to expand...

I sent this to my bank rep including a link to a provider.
It would be ridiculously simple for them to compare payee & amount on the checks they generate vs what is presented. All electronically, in a flash.
Sigh. Maybe one day.
 
Lindberg said:
The bank can do this, and likely does for corporate customers. Positive Pay has been around since even before all checks cleared electronically. Ask for it by name and see what they say. It's possible they're already doing it on the checks they generate.

www.investopedia.com

Positive Pay: What It Is, How It Works, vs. Reverse Positive Pay

Positive pay is a banking service used to match the checks a company issues with those it presents for payment. Learn how it is used to deter check fraud.
www.investopedia.com www.investopedia.com
Click to expand...
Positive pay. Thats what my customer has. It didn't help them in this instance
 
My bank responded: they charge extra to provide PositivePay protection. I guess the software does cost them.
 
I can appreciate the pita issues of running a business today. When I had my business 20+ years ago, check theft wasn't a thing. Check modifications by people could be a thing, but not if you kept a close eye on your processes and employees. My customers were all businesses, so in that respect things were simpler.

If I had a consumer business today, I'm not sure I would take checks. From businesses? I think having a check service is the way to go, or having your own bank do it. My guess is that if your bank sends the checks on your behalf, you'd be covered by FDIC if the bank screwed up either by clearing a modified check - they issued it for you, they cashed it, seems clear. And I'd think you'd have to be more careful using a 3rd party check issuer. But I'm not a legal risk expert.

With all of the above said, my experience from the IT end of things is that most of the time fraud happens from an internal, not external source. So audit your books and processes, because again in my experience it never just happens once from internal theft.
 
When I use Bill Pay and bank sends an e-check the bank pulls the money from my account and send the check...it is the bank's account info not mine on the check so if there is fraud it is not taken from my account.

In this day and age I can't believe checks are still a thing...I have a vendor I used any they ONLY take checks for payment and of course check gets lost in the mail and ends up being a PITA to resolve...would gladly pay 3% not to deal with that BS if they took cards.
 
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