People really need to know how to protect themselves these days with paper checks, because the banks are little help with all the fraud going on. You do have some protections by law, but you have to monitor your bank statements very carefully for fraudulent charges, and in the author’s case, the charge can even look legit if the check is “washed” or just copied/modified, and deposited by cell phone picture. Checks are printed with magnetic ink for the routing and account numbers, but that minor protection is obviously lost if it is just deposited via a cell phone photo.
There is lots of info online about how to avoid check fraud as described in the article. It has gotten much worse now that banks allow people to deposit checks into their account just by taking the cell phone picture of it (a really stupid idea), since the check image can easily be modified with any graphics program before deposit. Banks may also not not be verifiying anymore that the signature on the check even resembles your signature on file, unless it is a very large check. ( There is lots of info online about how paper checks are processed electronically if you Google the subject.)
Some tips:
Most bank managers will tell you that you should no longer write paper checks at if you can avoid it due to possible fraud (US Bank now tells customers this). It is obviously much better to use a credit card (where charges are easily contested) or an “e-check” where you enter your bank routing number and your account number online on the vendor’s secure website. For paying rent or mortgages many property managers, banks, finance companies, etc. now have this set up on their websites, with an e-check fee of about $3 (as opposed to a big 3.5% charge if the renter pays by credit card). If you must use a paper check to pay rent to a landlord, you can obviously hand deliver it each month to them, rather than mailing. Or you can actually deposit the check at the landlord’s bank, if they will give you their account number.
I’d avoid using the other smart phone and online payment systems. There has been a huge amount of fraud going on with them, where people have had their bank accounts totally drained in short order. Yes, I know, they are supposed to be the “modern” payment methods, but they are still not very secure. If you use them, research and understand the risks.
If you write a paper check, at least use one of the special pens with ink that is harder to wash off with chemicals, such as the UniBall Signo 207 Pen – either medium or bold (at Walmart, Amazon, etc.). The medium type tends to clog with the speical ink if not used frequently; the bold give gives a wide line but doesn’t clog.
If you must mail a check, only drop it into the slot INSIDE the post office, and do so before the last posted daily pickup – often this is before 5 pm. No outdoor post office box (typically the blue ones) is safe anymore. Thieves routinely rob postal workers of their master keys which will open all the USPS boxes in a particular area; so they don’t even need to “fish” inside the boxes for checks as described in the article.
There are similar issues for home mailboxes. Theives are robbing the USPS employees of the main keys to apartment, condo, and neighborhood “kiosk” boxes, and USPS may NOT notify you of this. Do not have any checks, credit cards, replacment check packets, etc. sent to an unlocked home mailbox; they sell ones now that have a slot and you unlock it with your own key to retreive the mail. You can obviously also rent a USPS post office box and have any sensitive mail sent there. This also allows you to get packages at the PO box and avoid “porch pirates.” USPS now also allows “street addressing” for PO boxes so you can get UPS and FedEx deliveries – ask a USPS clerk about this (details also oline on the USPS site and elsewhere).
If you use paper checks, have new check packets delivered only to your bank for pickup. Don’t have them mailed. Check packages have been stolen by USPS employees in the mail since they so obviously contain check packets (a flat plastic pack where the check packets iniside can be easily felt). If the package is stolen in the mail is a HUGE hassle, since the bank has to stop payment on all the checks, and they could possibly charge you a large amount to do that – they can claim that you got the checks but just lost them. So just order the checks through the bank and pick them up at the bank.
Unfortunately mailing large important checks is not secure unless you use (slow) USPS Registered Mail option, which is an add-on service for First Class Mail. The envelope or package then goes in locked boxes all along the way, and USPS takes Registrered Mail seriously. Regular First Class Mail does get lost at some low percentage rate (which may be your check). Another option for checks is Priority Mail or Priority Mail Express, both with tracking and signature with ID required as “Signature Required Restricted Delivery” option (about $20 or $30). However, Priority and Priority Express also do sometimes get lost, stolen, delayed or misrouted (had it happen), so any large checks should always be sent by Registered Mail with signature and ID required. Registered can take a couple of weeks but is the only secure way to send a check these days. (You can only use paper envelopes and paper tape for Registered – info online.) Many banks use UPS or FedEx with tracking ID and signature required for sending large paper checks, but they are not as secure as USPS Registered Mail.
If you do not use USPS Registered (just Priority, Priority Express, UPS, or FedEx), and a check is lost or stolen along the way (check the tracking frequently), to be safe you have to stop payment with your bank as soon as online tracking shows it no longer moving for a few days in their system. When sending a “bank check” or “cashiers check” (drawn on the bank itself) for payment, the bank can actually require you to buy an insurance bond for the value of the lost or stolen check (expensive) and make you wait 90 days for reimbursem*nt. So it is actually safter to send a personal check that you can immediately stop payment on. Be aware that since USPS Registered Mail is slow, tracking is not updated frequently, you just have to be patient and wait.
Unfortunately USPS employees have been convicted of stealing regular mail that looks like it might have a check. (I’d always use a 9″ x 11″ rigid envelope.) And they do sometimes lose mail and the big city processing centers (lots of USPS Google reviews stating this). In contrast, Registered Mail doesn’t get “lost,” and if it is stolen, it is a big deal, and the Postal Inspectors get involved.
The real problem with paper checks these days is anyone handling a paper check at a business along the way to depositing it can copy the bank routing number and your account number. (So don’t write checks to landscapers, doctor’s offices, barbers, etc. because anyone that works there will have access to the check.) With the two numbers, it is possible to submit a fraudulent ACH debit to your account. There is info online about how this is done, often through a foriegn bank. While a fraudulent ACH debit can be reversed, you must report it to the bank as soon as you receive your paper statement or look at your online statement – monitor and scan your account transactions carefully for fraudulent charges. Your time to report is limited. With businesses the allowed time is VERY short (info online), so businesses should always put “ACH blocks” on all their checking, savings, and money market accounts so that only debits from authorized creditors can go through. Most banks only allow ACH blocks for businesses, but you can ask for personal accounts if you won’t be paying any bills out of that account.
However, with the new cell phone deposit system for checks, a crook doesn’t even need to submit a fraudulent ACH debit. All they need to do is take a photo of ANY check you have written to a business. Then using any graphics program, they just change the payee line and deposit the check to an account by taking a picutre of it for a phone deposit. Then they will withdraw the funds before the original real check is processed.
If you ever have a burglary but your checkbook is NOT stolen, look in the back of the checkbook. The burglars will often pull checks out of the very back, thinking you will not notice. Then if they have a reasonable copy of your signature from something else, they will cash the fraudulent checks at your bank with fake ID. They’ll do this for odd amounts like say $230, and put “landscaping” or some similar service in the memo line. Crooks who get inside elderly people’s homes using different scams also do this.
Avoid using debit cards rather than credit cards because the funds are immediately withdrawn from your bank account with debit cards (Dave Ramsey is just wrong about using debit cards). “Skimmer” devices can be used on credit and debit card scanners at gas stations and retail stores which can capture your account number if you use the slot where you swipe the magnetic strip on the card. If anything looks odd or feels loose on the scanner device, do not use it. (Skimmers look like an extra rectangular piece over the real slot.) So always use the chip option where you either “tap” (preferred) or insert the card; it is harder to capture the number with a tapped or inserted chip. With a debit card requiring a PIN to also be entered, the crooks who mount a the skimmer will often also position a tiny camera somewhere to capture the PIN being entered on the keyboard – they’ve even used high powered binoculars at gas stations.
Of course, you can always use cash for local purchases (and get a receipt). No big deal to take a few minutes to prepay with cash at a gas station to protect your card. And obviously use cash for any firearms or ammo purchases, since some leftist states are now recording gun and ammo purchases made by credit card (using a special card “merchant code” for those purchases). The vendor then also saves the extra credit or debit card charge, which they obviously like.
