Check fraud is nothing new. It has probably been around since people started writing checks. The old-fashioned way is stealing blank checks, filling them out and either cashing them or using them as payments. Methods have changed. Things have gotten a lot more sophisticated. But the bottom line is the same – thieves are taking money from other people’s bank accounts.
How bad is the problem? Banks and credit unions filed over half a million reports tied to check fraud in 2023. That number is more than double the number from 2021! This explosion of check fraud is costing financial institutions billions, and wreaking havoc with many check writers’ finances. And of course, those billions always end up being paid by the public.
What does this have to do with us? Why this town hall? We’re here today because this problem has affected us directly. We’re going to tell you what has happened, what we have done about it, and what you can do.
So, what happened? How was the problem discovered?
This past fall, a staff member informed the Building and Grounds Committee that the church across the way had reported some checks missing.
A few weeks later, a member of that committee discovered that a check they sent to the church had been cashed, but it had not been recorded by the church as received. In reviewing their bank statements, they also realized that another check that should have been cashed by the church, had not been.
The member reported the fraudulent check activity to their bank and to the church. The bank said that they would investigate, this person would be reimbursed for the fraudulently cashed check, and the bank would put a stop payment on the missing, uncashed check.
What have we done about this?
There was no way to know how the checks went missing, when and where they were stolen. So, what could we do? In an abundance of caution, we replaced our regular mailbox with one that has a lock. That would make things more secure there. The issue of the stolen checks was reported to the police, who assigned it a case number for further investigation.
Shortly after learning of the missing checks, members of the staff and the Board tried to see if they could determine whether any other checks had gone missing. They researched members’ check payment patterns to see if there was anything unusual, something that could point to other checks being missing. When they found something that appeared to be off, a Board member reached out to them personally, by phone, to discuss the discrepancies. Needless to say, not every irregularity meant that something was wrong, but it was learned that a few more members had missing checks.
Now not every person makes pledge payments on a regular basis. And donations do not generally fall into patterns. The Board notified all members who had a pattern of sending checks between July and December 15, via email, and urged that they do a thorough review of check transactions. In this notification, they highlighted the check fraud issue. A few weeks later, year-end statements were distributed to the entire congregation. Along with the statement, there was a narrative providing detailed information about the check situation.
People do not always read their emails. And I am sure that a lot of people glanced at those year-end statements and ignored the piece that was included about making sure the numbers that the church had matched the numbers in their checking accounts.
What else could we do? What would be our next step? The answer was to have a town hall. Why?
- To raise awareness about check fraud
- To answer questions and address concerns about this situation
- And to provide information and discuss ways we can protect ourselves and the church from check fraud in the future.
The mail system is not as secure as you may think it is.
Criminals steal signed checks from postal boxes, and sometimes other locations. Checks are then washed, which is the process by which the dollar amount and the name of the “payee,” or recipient, are removed. Depending on the quality of the check and the ink used, the thieves may be able to use common chemicals like nail polish remover to wash the check. Then they rewrite the check for a new recipient and a larger sum — often hundreds or thousands of dollars more — before cashing it.
Sometimes washed checks are sold on the internet in bunches, and there can be a long time between when it was originally mailed and when it is fraudulently presented for payment.
What can you do to protect yourself?
First, take a look at your checking account. Whether you use a checkbook, a spreadsheet, or a software program, see if it matches your bank statement. Are there any payments you have made where the check has not been cashed? If it has been too long a time, try to contact the payee. If it has just been too long since you sent a check and you cannot find out what happened to it, you can put a stop payment on it.
If a check has been cashed for a wrong amount, go online and look at the image they have for that check. If it looks like fraud, contact your bank and let them take it from there. The sooner you do this, the sooner you will be reimbursed. And there is a time limit. You have 30 days from the date of a bank statement with fraudulent activity to report it. Once it has been reported and you have provided the bank with the information they need, you should have that money back in your account as a provisional credit within ten business days.
What to do moving forward? You can drop off envelopes containing checks inside the post office. That guarantees that thieves cannot get your checks by robbing the local postal box. Most banks make electronic payments to major companies such as utilities and credit card companies, and only send out checks to smaller businesses and individuals.
Checks can be stolen anywhere along the line, from the postal box to your mailbox. So, try to do as little writing of checks as possible.
For making pledge payments or other donations to the church, you can switch to Breeze, having money withdrawn from your account either on a schedule or an ad hoc basis. And if your bank does not play well with Breeze, you can set it to be a credit card payment, you can pay then pay that bill electronically.
Personal story of check fraud
A few years ago, I mailed two checks to the county. I had made these payments a few weeks early to get a 2% discount. All of my checks and other payments are noted on a spreadsheet, so I have a record of when things have been paid. The date for that discount passed and the checks still had not been cashed, so I called the county phone number, and was told that they never received them. A few days later, I saw that one of those checks had been cashed, but the amount was way off. It was three times that of the larger of those two checks. When I went online to look at a copy of the check, I saw that it was made out to someone I had never heard of. I called the bank and told them what had happened. They asked me if I knew the person the check was made out to. Nope.
When I pay a bill where you have to actually send that in with your payment, I make a copy of it, showing the filled-out check. I went to the bank later that day and talked with them, showing them what the check had originally looked like, and filled out some paperwork. A stop payment was put on the other check number. The next day, the amount stolen from my account was back in there.
A month later, I got a call from my bank, wanting to know if I had gone to a branch in New jersey that morning. No. Had I even been in New Jersey that morning? No. Then they told me that someone had tried to cash a check from our account (my wife’s and mine), but the teller thought the signature on the ID did not look right, so they refused. I called my branch and they said that we should change our accounts. They then sent a message to all of their branches to be aware of what was being attempted.
We went to our branch and filled out the paperwork for new savings and checking accounts. The officer had me sign a withdrawal slip for the amount currently in our account, then he went over to a teller. He came back a minute or two later and told us that the amount in our account had dropped by $1,500 while we were sitting there. That check had been cashed at another branch. After filing the fraud claim, the money was back in our account in a few days.
Anytime I have a payment that must be paid by check, it now gets dropped off inside the post office. And our payments to the church are now done exclusively through Breeze, so there are no checks anywhere along the line for thieves to take.
