By Christina Ianzito, AARP, August 2023
Should You Stop Using Paper Checks?
Other forms of payment may be safer as mail theft and check-washing cases surge.
Last month, two men were arrested in Fayetteville, Georgia, after authorities reportedly found 211 pieces of stolen mail in their possession, including 151 personal checks worth almost $50,000. They’d swiped the stash from a large blue mailbox in front of the Fayetteville post office, according to the Fayette County Sheriff’s Office.
The good news is that the bad guys were caught. The bad news is that this kind of crime is rampant — so much so, it may be time to think twice before using paper checks and opt for alternative ways to send money.
The thefts, and subsequent check fraud, have become a huge problem: Last year, financial institutions received more than 680,000 suspicious activity reports (SARs) related to check fraud, nearly double the previous year’s 350,000 SARs, according to the Federal Reserve. And that’s while the number of paper checks in circulation has been dropping dramatically. Almost 3.4 billion checks were processed in 2022, down by nearly half, from 6.4 billion 10 years earlier.
“Checks have reached a point where they’re almost more of a problem than a solution,” says Frank McKenna, chief fraud specialist for the fraud detection company Point Predictive. “I think limiting [the use of paper checks] as much as you can, and using alternatives right now, is a good idea.”
Mail theft on the rise
The growing check fraud problem is fueled by a surge in mail theft — from mailboxes and trucks — as well as robberies of carriers. In all of 2022, 412 U.S. Postal Service letter carriers were robbed on the job; in the first half of 2023, there were already 305 incidents, according to the United States Postal Inspection Service (USPIS). And after receiving 38,500 reports of mail theft last year, the service has seen 25,000 from just January to mid-May of 2023.
The thieves who steal from mail collection boxes (including personal mailboxes) want the checks, which they alter or “wash” to direct the money — often increasing the original dollar amount — to themselves or someone in their criminal network. Many stolen checks are put up for sale on the dark web for other criminals to purchase.
Those who target mail carriers seek what are known as arrow keys, extremely valuable among criminals because they’re designed to open multiple mailboxes within a certain area.
In response, the USPS and USPIS say they are installing more-secure mail collection boxes that prevent thieves from fishing for mail through the slot, as well as electronic locks to replace arrow-key locks in high-risk areas.
“We are hardening targets — both physical and digital — to make them less desirable to thieves, and working with our law enforcement partners to bring perpetrators to justice,” Chief Postal Inspector Gary Barksdale said in a May press statement.
Though there have been reports of USPS employees stealing mail, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) said in a February alert about check fraud to financial institutions that mail thefts are increasingly committed by non-USPS workers, “ranging from individual fraudsters to organized criminal groups comprised of the organizers of the criminal scheme, recruiters, check washers, and money mules.”
Paper checks and identity theft
There are other reasons to be concerned about using checks: Each one is loaded with your personal information. Most of us have our names, addresses and phone numbers printed on our checks, not to mention our bank account and routing numbers. McKenna notes that identity thieves can use that data to find out even more, such as your Social Security number and email address, using online tools popular with criminals.
“We have to think about who we’re handing a check to even physically because of the way that that information can be used digitally,” says Mary Ann Miller, fraud and cybercrime executive adviser and vice president of client experience at the consumer identity company Prove. Miller notes that the bad actors can get enough information to open another bank account in your name and, using that routing and account number, “conduct ACH transactions out of your bank account.” (ACH transactions are electronic fund transfers between banks.)
“That paper check is riskier than we think,” Miller says.
Alternatives to paper checks
Before writing a check, see if there’s another way to pay, says Roxann Cooke, managing director for consumer banking at Chase, who points to alternatives that include cash transfer apps such as Zelle, your bank’s online bill payment feature, and particularly credit cards, which have substantial consumer protections.
When using apps, it’s important to confirm the payment details before hitting that send button. It can be hard to get your money back if you make an error, which is why some experts, such as Cooke, suggest only using this method when transferring money between friends and family or others you trust. Even then, she adds, “triple check the user name and phone number” before sending the money.
Miller suggests using a credit card for online bill payment when you can, because “it’s easier and more convenient to dispute a transaction with your credit card” than it is with other payment methods.
How to lower your risk of fraud when you do use checks
When making out a check, write out the amount — “Two hundred and fifty dollars and sixty-one cents,” for example — so the words fill out the line. This makes it more difficult for someone to alter it without washing off the ink. Also make sure the numeric amount fills the box on the far-right side of the check.
Use permanent ink to prevent the check from being washed.
“Never, never write checks out to cash,” Cooke says, “unless you intend for it to be used by anyone who comes in possession of that check.”
Sign your checks the same way every time so that your signature is more easily recognized by the bank when signatures are compared, Cooke suggests.
Keep your checks in a secure, private place in your home (never keep blank checks in your wallet).
Deposit mail in collection boxes as close to the indicated pickup time as possible — or, better yet, take it inside the post office for mailing.
Get online regularly to scan your transactions for suspicious activity. “If you get paper statements, you may not know [there’s a problem] for 30 days,” McKenna says. And make sure the amount that the check was cashed for matches the amount you wrote on it. Some banks’ apps allow you to pull up images of the cashed check.
Sign up for transaction alerts with your bank. Unfortunately, however, you need to be aware of bank impersonation scams, in which bad actors pretend to warn you about fraud to get your personal information or money.
Report suspicious activity as soon as possible.
What to do if you think your check has been stolen
Notify your bank. “The faster the better,” Cooke says.
Report suspected mail losses to the USPIS, which uses such reports to identify problem areas and where to focus crime investigations, at uspis.gov/report or by calling 877-876-2455.
Report the theft to local law enforcement, so you’ll have a police report documenting the crime.