HOUSTON – Thousands of dollars were allegedly stolen out of a Huntsville man’s bank account; and for months the bank told the customer he may not get the money back. KPRC 2 Investigates is looking into check washing fraud and what you can do to protect your money. Check washing is an old-school crime still happening today. New technology is making it even easier for criminals.
What is check washing fraud?
Check washing is a process that involves stealing, erasing, and rewriting a check. Often, checks are stolen out of the mail system and unsecured mail boxes.
“Six thousand and three hundred bucks, it’s a lot of money. I mean, for anybody,” said Stan Dorak.
Dorak was shocked to discover a check he wrote to the Texas Department of Motor Vehicles was changed and cashed for a much larger amount. He immediately went down to his Chase Bank branch and filled out paperwork for the fraud department. Weeks later, he still didn’t have his money back.
“They said that it’s still under investigation,” explains Dorak. “It could take 60 to 90 more days and that’s where I lost it; and that’s why I contacted you, Channel 2.”
Dorak did find out the check was deposited at a Chase Bank ATM. When he got a copy of the check and looked on the back, there was no signature.
“So they accepted a check that was unendorsed,” he explained.
He’s pretty sure the check was stolen from his mailbox or somewhere in the mail system. That’s how most of these thieves work.
“What a lot of them do is they’ll go through neighborhoods and just check mailboxes, pull things out, pull out bills,” said Ken Smiley.
Amegy Bank Executive Vice President Ken Smiley said the reason check washing is so common is that it’s easy.
“They’ll take scotch tape or low adhesive tape, tape and cover the signature, and then dip that into whether it be a solution of paint thinner bleach acetone. They use some sort of solution to remove the ink, obviously preserving what’s under the tape, dry it, rewrite a check to whoever,” said Smiley.
How to prevent check washing and check fraud
Smiley said there are a few things you can do to help prevent it from happening to you:
- Pay electronically through a bank or app. This can be a payment system through the bank, like Zelle, or with a payment app like Venmo or PayPal.
- Use a black gel pen. It’s harder to lift off paper. Blue ballpoint is the easiest ink to remove from checks.
- Double-check images of checks from your account. Since most banks post images of the checks to your account, go back and make sure nothing was changed on your checks. Check to see if all of the checks that were cashed were legitimate.
- Don’t put your mail in an unsecured mailbox. Smiley suggests dropping the mail off at a box on the *inside at the post office. Don’t let it sit in an unsecured box overnight.
Stan said Chase Bank should be more proactive about his money, while they investigate what went wrong.
“They should replenish the $6,270 in my account immediately and they should go and figure out what happened,” he said.
We have spoken with some (other) customers who said their bank froze their entire account and they didn’t have access to their money at all. It’s why some people advise transferring any money you have to a new account away from that bank if this happens to you. Then you are only waiting on the bank to re-find the money that was stolen from you.
Chase did eventually put the money back into Stan’s account. Chase Bank sent us more information on how to protect your account from fraud.
What to do if you are a victim of check fraud or check washing
If you have a problem with check fraud and you need help with your bank, you can file complaints with the Office of the Comptroller of the Currency at www.helpwithmybank.gov. This agency regulates all federal banking institutions.
You should also file a complaint with the Consumer Finance Protection Bureau at: https://www.consumerfinance.gov/complaint/
If your bank is a state bank, they are regulated by the Texas Department of Banking; and you should file your complaint here.
In Stan’s case, since it involved a check sent to the Texas Department of Motor Vehicles, he also filed a complaint with them.
We asked Smiley if there are any regulations that require banks to return customers’ money when it is lost to fraud. He sent is this information:
“In general, Universal Commercial Codes (UCC) provide guidance that provides up to one year for a consumer to report fraud as the result of an alteration or forged signature. UCC does not provide a timeframe for your bank to refund money. Rules pertaining to refund timeframes vary between banks and states.
- Also, the time allowed can be shortened or lengthens in the deposit agreement with one’s bank. Few people read their depository agreement.
- In some cases, like fraud from repeat offenders, the time frame may shorten, especially for subsequent events.
- Rules relating to electronic fraud are more clear and are found in Regulation E (Reg E) Electronic Fund Transfer Act (Reg E) | American Bankers Association (aba.com) Reg E regulates transactions involving debit cards, ATMs and electronic debits (ACH transactions).”