Altered Check Fraud: How Scammers Forge Reality and Steal Your Money

Despite the accelerating shift towards digital payments, the paper check persists as a method of transaction for many individuals and businesses. This continued usage, however, also sustains its viability as a target for fraudsters. Altered check fraud, a scheme where criminals illicitly modify legitimate checks to divert funds, remains a significant and damaging threat. These alterations can range from subtly changing the payee’s name or the amount payable to more sophisticated methods like chemical “washing.” Understanding the mechanics of how checks are altered, identifying who is most at risk, and learning robust prevention and response strategies are crucial to protecting financial assets from this enduring form of deception. The unsettling reality is that a check written or received with honest intentions can be transformed by a scammer into a potent weapon against one’s bank account.

What is Altered Check Fraud? A Detailed Explanation

Altered check fraud is a specific type of check fraud characterized by the material and malicious modification of a legitimately issued check or other negotiable instrument to perpetrate a fraud. Unlike counterfeit checks, which are entirely fabricated, or checks with forged maker signatures, an altered check begins as a valid instrument. The fraud occurs when a criminal intercepts this genuine check and changes critical details. The most common alterations involve changing the name of the payee to redirect the funds to the fraudster or an accomplice, increasing the monetary amount of the check, or, less commonly, modifying the date.  

The legal framework addressing this type of fraud is largely found within the Uniform Commercial Code (UCC). Specifically, UCC Section 3-407 defines “alteration” as either an unauthorized change in an instrument that purports to modify in any respect the obligation of a party, or the unauthorized addition of words or numbers or another change to an incomplete instrument relating to the obligation of a party. This legal definition is pivotal as it forms the basis for determining liability among the parties involved—the drawer (account holder), the drawee bank (paying bank), and the depository bank (bank of first deposit).  

The fact that altered checks originate as genuine instruments can make them particularly insidious and potentially more challenging to detect initially compared to, for example, poorly crafted counterfeit checks. Elements such as the original maker’s signature, the check stock itself, and the routing and account numbers printed on the check are authentic. If a check is merely “washed” to change the payee and amount, the account holder’s signature remains intact, lending an air of legitimacy that can deceive unsuspecting recipients or even bank tellers during initial processing. This deceptive characteristic necessitates a focus on detecting inconsistencies in other areas of the check beyond just the signature.  

How Scammers Alter Checks: Common Tactics and Scenarios

Fraudsters employ several techniques to alter checks, ranging from simple manipulations to more sophisticated chemical and digital methods. Understanding these tactics is key to recognizing and preventing this type of fraud.

Check Washing: This is arguably the most prevalent method of check alteration. It involves using common household or industrial chemicals—such as acetone, bleach, or other solvents—to erase or “wash” the ink of the original payee name, the written and numerical amount, or other details from a stolen, legitimate check. Once the original information is removed, the fraudster rewrites the check, making it payable to themselves or an accomplice, often for a significantly inflated amount. For instance, a legitimately written check for a small sum like $69.99 can be stolen from the mail, chemically washed, and then fraudulently rewritten for $969.99, payable to the criminal.  

Adding Information to Blank Spaces: Scammers often exploit checks where the drawer has left significant blank spaces on the payee line or the amount lines. They can add digits or words to inflate the check’s value (e.g., changing “$100” to “$1,000” or “$100.00” to “$190.00” by adding a “9”) or add an alternative payee (e.g., writing “or John Doe” after the legitimate payee’s name). This method requires less sophistication than chemical washing but relies on the drawer’s oversight.  

Check “Cooking” (Digital Alteration): A more technologically advanced method involves the digital manipulation of a check. Fraudsters obtain an image of a legitimate check—often by photographing or scanning a stolen one—and then use photo editing software to alter the payee, amount, or other details. The altered image is then used to print a new, fraudulent check, often on readily available check stock. This “check cooking” technique can bypass some physical security features designed to prevent chemical washing and allows for the creation of multiple fraudulent checks from a single stolen original.  

Methods of Obtaining Checks for Alteration: The success of these alteration techniques hinges on the fraudster first obtaining legitimate checks. Common sources include:

• Mail Theft: This is a primary and increasingly common method. Checks are stolen from unsecured residential mailboxes, blue USPS collection boxes, or even directly from mail processing facilities. Organized crime rings are sometimes involved, and instances of postal carriers being robbed for their master keys to access mailboxes have been reported.  
• Insider Access: Employees within a business or organization who have access to outgoing checks, blank check stock, or returned checks may steal them for alteration.  
• Dumpster Diving / Trash Theft: Discarded checks, pre-approved check offers, or bank statements containing account information can be retrieved from trash receptacles and used by fraudsters.  
• Burglary or Theft: Stolen purses, wallets, or checkbooks during home or vehicle break-ins can also provide fraudsters with checks to alter.

The evolution from purely physical alteration methods like check washing to include digital techniques such as “check cooking” demonstrates a clear adaptation by fraudsters. As banks and check manufacturers have introduced more sophisticated security features into check paper and inks to thwart washing (e.g., chemically sensitive paper, special inks ), criminals have pivoted to methods where these physical safeguards are less effective, particularly if the altered check is entirely reprinted.  

Furthermore, the heavy reliance on mail theft to procure checks for alteration elevates the security of the entire mail delivery and collection system to a critical chokepoint in the prevention of this fraud. While individuals can take precautions like mailing checks from secure locations, the scale of mail theft reported, including organized efforts like robbing postal workers for master keys , points to systemic vulnerabilities that extend beyond individual control. This implies that while personal vigilance is crucial, broader systemic improvements in mail security are also necessary to effectively combat this vector of check fraud.  

Are You a Target? Vulnerabilities to Altered Check Fraud

Any individual or business that writes or receives paper checks can potentially become a victim of altered check fraud. However, certain practices and situations increase vulnerability:

• Mailing Checks via Unsecured Mailboxes: Placing outgoing checks in unsecured personal mailboxes with the flag up, or in easily accessible USPS blue collection boxes, especially overnight or before the last pickup, significantly increases the risk of mail theft.  
• Leaving Large Blank Spaces on Checks: Failing to fill in all available space on the payee and amount lines when writing a check provides an easy opportunity for fraudsters to add digits or names, thereby altering the check’s value or recipient.  
• Victims of Mail Theft: Individuals or businesses whose incoming or outgoing mail is stolen are at high risk, as checks are a prime target for thieves looking to commit alteration fraud.  
• Poor Internal Controls in Businesses: Companies with inadequate controls over their check stock, limited segregation of duties in accounts payable, or unrestricted access to financial information create opportunities for both internal and external fraud.  
• Reliance on Mailed Checks: Seniors, who may rely more heavily on mailed checks for paying bills or receiving income, can be disproportionately targeted for mail theft and subsequent check fraud schemes.  
• Discarding Checks or Bank Information Insecurely: Throwing away old checks, voided checks, or bank statements without proper shredding can provide fraudsters with account numbers, routing numbers, and signatures that can be used to create or facilitate fraudulent check activity.  

The vulnerability to altered check fraud is not solely determined by how a check is written, but significantly by how it is transmitted and stored. The strong and repeated emphasis in fraud prevention literature on secure mail practices and the proper safeguarding of check stock underscores that physical access to the check is the fundamental prerequisite for traditional alteration methods like washing or manual additions. Even a perfectly written check, if easily stolen, becomes a tool for the fraudster. This highlights the need for a holistic view of check security that encompasses its entire lifecycle.  

Red Flags: Recognizing an Altered Check

Detecting an altered check often requires careful examination and an awareness of common indicators. Both physical characteristics of the check itself and irregularities in transactions can signal fraud.

Visual Inspection of the Check:

• Inconsistent Inks, Handwriting, or Fonts: Look for noticeable differences in ink color, thickness, or sheen, particularly between the pre-printed parts of the check, the maker’s signature, and the payee name or amount. Smudges, overwriting, or different handwriting styles in the payee or amount fields are major red flags.  
• Signs of Erasure or Chemical Alteration: Check for discoloration, faded areas, or unusual stains on the check paper, which could indicate chemical washing. The paper might also feel thinner, rougher, or more brittle in areas where alterations have been made. A faint chemical odor might sometimes be present.  
• MICR Line Irregularities: The Magnetic Ink Character Recognition (MICR) line at the bottom of a check contains routing, account, and check numbers. The special ink used for this line should appear dull and be printed smoothly. If the ink is shiny, raised, smeared, or appears to be of poor quality, the check may have been tampered with or be a counterfeit reprint of an altered original.  
• Perforations and Edges: Most legitimate business checks and many personal checks are produced with at least one perforated or rough edge from being torn from a checkbook or a continuous feed. If all edges of a check are perfectly smooth, it might suggest it was printed individually on standard paper, which could be a sign of a “cooked” or counterfeit check.  
• Bank Logo and Address: While more relevant for counterfeit checks, if an altered check has been entirely reprinted, inconsistencies in the bank’s logo (faded, poor quality) or an invalid or P.O. Box-only address for the bank could be an indicator.  

Transactional and Behavioral Red Flags:

• Discrepancies in Cleared Check Images: When reviewing online banking or bank statements, compare the image of the cleared check with your own records (check register or accounting software). Unfamiliar payee names, significantly different amounts, or alterations to the date are clear signs of fraud.  
• Checks Cashed Out of Sequence or Missing Checks: If check numbers clear out of their usual sequence, or if checks from your records are missing and then appear cashed with alterations, this indicates theft and fraud.  
• Bank Notifications: Alerts from your bank regarding suspicious transactions, unauthorized activity, or returned items due to suspected alteration should be investigated immediately.  
• Endorsement Irregularities: Examine the endorsement on the back of the cleared check image. If the endorsement does not match the intended payee, or if there are multiple, suspicious endorsements, it warrants investigation.  
• Unusual Rush or Pressure (for those accepting checks): A customer or individual who urges bank staff or a recipient to rush a transaction, bypassing normal processing times, can be a behavioral red flag. This may be an attempt to cash a fraudulent or altered check before it is thoroughly scrutinized.  
• Vague Details about Check Origin (for those accepting checks): If an individual is vague about the source of a check or unwilling to provide comprehensive background information, it may raise suspicion.  

Detecting altered checks often demands a keen eye for detail and a methodical comparison against known legitimate checks or internal records. The alterations are, by design, intended to be deceptive. Subtle signs like slight discoloration or minor variances in check stock or print quality can be easily overlooked without careful scrutiny. This makes regular and thorough review of bank statements and cleared check images a critical habit for individuals, and necessitates specific training for business personnel (like bank tellers or accounts payable staff) who handle checks regularly.  

The Devastating Impact of Altered Check Fraud

The consequences of falling victim to altered check fraud extend well beyond the immediate financial theft, creating a cascade of problems for both individuals and businesses.

• Direct Financial Loss: The most obvious impact is the direct depletion of funds from the victim’s bank account as fraudsters cash or deposit the altered checks for inflated amounts or to unauthorized payees. For businesses, this can mean substantial sums, and for individuals, especially those on fixed incomes, the loss can be devastating.  
• Impact on Credit Scores: For consumers, if altered checks lead to an overdrawn account and subsequently bounced payments for legitimate obligations (rent, utilities, loan payments), their credit score can be negatively affected. This can make it harder and more expensive to obtain credit in the future.  
• Account Closure and Disruption: Victims often need to close the compromised bank account to prevent further fraudulent activity and open a new one. This is an inconvenient process involving updating direct deposits, automatic payments, and informing relevant parties of the new account details.  
• Associated Fees: The fraudulent activity can trigger various bank fees, such as overdraft fees if the account balance becomes negative, stop payment fees if the victim attempts to stop other checks, and fees for new checks or account services.  
• Business Disruption and Reputational Harm: For businesses, altered check fraud can disrupt cash flow, strain vendor relationships if legitimate payments are delayed or bounce, and damage the company’s reputation if they are perceived as having poor financial controls.  
• Emotional Distress and Time Investment: Victims often experience significant stress, anxiety, and a sense of violation. The process of discovering the fraud, reporting it to various entities, and working to recover funds can be incredibly time-consuming and emotionally draining.  
• Legal Ramifications for Unknowing Depositors: In some situations, an individual or business that unknowingly deposits an altered check given to them by a fraudster could face difficulties with their own bank and may even be held liable for the funds if the check is later returned as fraudulent.  
• Identity Theft Component: Information gleaned from a stolen check (name, address, account number, signature) can be used by fraudsters for broader identity theft schemes, compounding the damage.  

The true cost of altered check fraud often significantly exceeds the monetary value stolen. The ripple effects—such as the inability to meet other financial obligations, damage to creditworthiness or business relationships, and the sheer effort required for resolution—underscore the critical importance of robust preventative measures.

Protecting Yourself: Prevention Strategies Against Altered Check Fraud

Preventing altered check fraud requires a multi-layered strategy encompassing careful check writing practices, secure mail handling, diligent account monitoring, proper check storage, and, for businesses, the use of specialized banking services and strong internal controls.

Secure Check Writing Practices:

• Use Indelible Ink: Always write checks using a black gel pen with permanent, non-erasable ink. This type of ink is significantly more resistant to chemical washing attempts by fraudsters.  
• Fill All Blank Spaces: When writing the payee name and the amount in numbers and words, use all available space. If your entry doesn’t fill the entire line, draw a line through the remaining blank area. This prevents fraudsters from easily adding extra words or digits to alter the check.  
• Use Full Payee Names: Write out the complete legal name of the payee. Avoid using abbreviations (e.g., write “Internal Revenue Service” instead of “IRS”), as abbreviations can be more easily altered or added to.  
• Spell Out Amounts Clearly: Ensure the written-out dollar amount on the designated line is clear, legible, and fills the space. For the cents portion, write it as a fraction over 100 (e.g., “and 78/100”).  

Secure Mail Practices:

• Mail Checks Securely: Whenever possible, mail checks from inside a U.S. Post Office building or hand them directly to a mail carrier. If using a blue USPS collection box, deposit them as close to the scheduled pickup time as possible and avoid leaving them overnight or over weekends. Avoid using unsecured residential mailboxes with the flag raised.  
• Promptly Retrieve Incoming Mail: Collect your mail as soon as possible after delivery to prevent theft of incoming checks or bank statements.  
• Consider USPS Informed Delivery®: This free service from the USPS sends daily emails with scanned images of the exterior of incoming letter-sized mail, allowing you to see what checks or financial documents to expect.  
• Use Security Envelopes: When mailing checks, consider using security-tinted envelopes that obscure the contents.  

Account Monitoring & Management:

• Regularly Monitor Accounts: Review your bank accounts online frequently—ideally daily or every few days—and scrutinize cleared check images for any signs of alteration or unauthorized transactions. Don’t wait for the monthly paper statement.  
• Set Up Account Alerts: Most banks offer alerts for various transaction types (e.g., large withdrawals, online transactions). Enable these to get timely notifications of activity on your account.  
• Follow Up with Payees: If you’ve mailed a check for a significant amount, follow up with the intended recipient to confirm they received it and that it was for the correct amount.  

Check Stock & Storage:

• Use High-Security Checks: Order checks that incorporate security features designed to deter fraud, such as watermarks, microprinting, chemically reactive paper (which visibly changes if solvents are used), and security threads.  
• Securely Store Checks and Financial Documents: Keep your checkbook, bank statements, and any documents containing sensitive financial information in a safe, locked place.
• Shred Discarded Financial Documents: Thoroughly shred old or voided checks, bank statements, and credit card offers before disposing of them to prevent dumpster diving.  

Business-Specific Prevention:

• Utilize Positive Pay Services: This is one of the most effective tools for businesses. With Positive Pay, the company transmits a file of issued checks (including check number, payee, and amount) to its bank. The bank then compares checks presented for payment against this authorized list and flags any discrepancies for the company’s review and decision (pay or return) before funds are disbursed. Reverse Positive Pay is also an option where the bank sends the company a list of checks presented, and the company approves them.  
• Implement Strong Internal Controls:
  • Segregation of Duties: Ensure that no single individual is responsible for all aspects of the check issuance and reconciliation process. For example, the person who prepares checks should not also be an authorized signer or reconcile the bank account.  
  • Limited Access: Restrict access to blank check stock and signature stamps to only authorized personnel. Keep these items locked securely.  
  • Regular and Independent Reconciliation: Bank accounts should be reconciled promptly by an employee who is independent of the check issuance and accounts payable functions.  

Consider Payment Alternatives:

• Whenever feasible, use more secure electronic payment methods such as ACH transfers, online bill pay services offered by banks, wire transfers for large transactions, or peer-to-peer payment apps for smaller amounts. These methods reduce the reliance on paper checks and the associated risks of mail theft and physical alteration.  

No single preventative measure can entirely eliminate the risk of altered check fraud. However, a combination of these strategies—vigilance in how checks are written and handled, consistent monitoring of accounts, and the adoption of bank-provided security services like Positive Pay for businesses—creates a robust, multi-pronged defense. The strong and repeated recommendations for businesses to implement Positive Pay highlight its efficacy as a technological barrier, shifting a significant part of the detection process to an automated system that proactively verifies check legitimacy before payment.  

Victim of Altered Check Fraud? Steps to Take Immediately

Discovering that you have been victimized by altered check fraud requires swift and decisive action to mitigate losses, protect your accounts, and aid in the potential apprehension of the perpetrators.

1. Notify Your Bank or Financial Institution Immediately: This is the most critical first step. As soon as you suspect or confirm that a check has been altered and fraudulently cashed or deposited:
   • Contact your bank’s fraud department or customer service line without delay.  
   • Clearly explain the situation, providing details of the specific check(s) involved (check number, original amount, date, intended payee) and the nature of the alteration.
   • Request copies of the front and back of the fraudulent check(s) as cleared by the bank. This will show the alterations and endorsements.
   • Dispute the unauthorized transaction(s).
   • Inquire about stopping payment on any other potentially compromised checks if applicable, though this may be too late for checks already cleared.
   • Strongly consider closing the compromised bank account and opening a new one to prevent further fraudulent activity using the old account details.  
2. File a Police Report:
   • Contact your local police department or sheriff’s office to file an official report of the fraud.  
   • Provide them with all relevant information, including copies of the altered check(s), bank statements, and any correspondence.
   • Obtain a copy of the police report (or at least the report number). This document is often required by banks and credit bureaus when investigating fraud claims and repairing your credit.
3. Report to Relevant Federal Agencies:
   • Federal Trade Commission (FTC): Report the identity theft and fraud at IdentityTheft.gov or ReportFraud.ftc.gov. These sites provide resources and recovery plans.  
   • U.S. Postal Inspection Service (USPIS): If you believe the check was stolen from the mail (either incoming or outgoing), report the mail theft to the USPIS. This can be done online at uspis.gov/report or by calling 1-877-876-2455. Mail theft is a federal crime.  
   • Internet Crime Complaint Center (IC3): If any aspect of the fraud involved online activities (e.g., if your account information was stolen online leading to the check fraud, or if “check cooking” was involved), consider filing a report with the FBI’s IC3 at ic3.gov.  
4. Place Fraud Alerts and Consider a Credit Freeze:
   • Contact one of the three major credit reporting agencies (Equifax, Experian, TransUnion) to place a fraud alert on your credit report. The one you contact is required to notify the other two. A fraud alert makes it more difficult for someone to open new credit accounts in your name.  
   • For more robust protection, consider placing a credit freeze on your reports with all three bureaus. A freeze restricts access to your credit report, significantly hindering fraudsters from opening new accounts.
5. Collect and Organize All Documentation:
   • Maintain a detailed record of all actions taken, communications, and documents related to the fraud. This includes:
     • A timeline of events: when the check was written/mailed, when the fraud was discovered, when reports were made.
     • Copies of the original check (if available) and the altered check image(s) from the bank.
     • Relevant bank statements highlighting the fraudulent transaction(s).
     • Copies of your police report and any reports filed with the FTC, USPIS, or IC3.
     • A log of all phone calls and correspondence with your bank and other agencies, including dates, times, names of individuals spoken to, and summaries of conversations.

Reporting altered check fraud often involves navigating multiple channels—your bank, local law enforcement, and federal agencies. This can feel overwhelming for victims. Having a clear, step-by-step guide and understanding who to contact and why is essential for an effective response. Prompt action is paramount in these situations.

Understanding Liability for Altered Checks

The determination of liability in cases of altered check fraud can be intricate, often depending on the specific circumstances of the fraud, the timeliness of its discovery and reporting, and the degree of negligence demonstrated by the parties involved—namely, the account holder (drawer), the bank of first deposit (depository bank), and the paying bank (drawee bank). While the primary liability rests with the individual who perpetrated the fraud, recovery from the criminal is often not possible, leading to an examination of the responsibilities of the other parties. The Uniform Commercial Code (UCC) provides the primary legal framework.  

General Principles: A guiding principle is that the party who was in the best position to prevent the loss may bear secondary liability if the actual fraudster cannot be held accountable.  

Drawer’s (Account Holder’s) Liability: The account holder has a duty to exercise “ordinary care” in writing and safeguarding their checks and in reviewing their bank statements.  

• Negligence in Writing or Safeguarding Checks: If the account holder’s negligence substantially contributes to the alteration, they may be precluded from asserting the alteration against a bank that paid the check in good faith. Examples of negligence include leaving large blank spaces on the check’s amount or payee lines, or failing to secure blank check stock, making it easily accessible for theft.  
• Failure to Promptly Report Alterations: The UCC imposes a duty on customers to examine their bank statements and canceled checks (or check images) with reasonable promptness to discover any unauthorized payments, including alterations.
  • Generally, a customer must notify the bank of an alteration within a reasonable period, often considered to be 30 days after the statement showing the altered item was made available. Failure to do so can shift liability to the customer for that item and potentially for subsequent alterations by the same wrongdoer if the prompt reporting could have prevented further losses.  
  • There is typically an absolute time limit, often one year from the time the statement is made available, for a customer to report an altered check, regardless of either party’s negligence.  
  • In cases involving repeated alterations by the same wrongdoer, if the customer does not notify the bank within a shorter timeframe (e.g., 14 to 30 days after the first altered item appears on a statement), they may be liable for subsequent losses that could have been prevented by earlier notification.  

Depository Bank’s (Bank of First Deposit) Liability: The depository bank, which is the first bank to take the altered check (e.g., from the fraudster who deposits it), generally makes certain warranties to subsequent banks in the collection chain and to the paying bank.

• Under UCC § 3-416 (and similar provisions), the depository bank typically warrants that the check has not been altered. If this warranty is breached, the depository bank may be liable to the paying bank for the loss.  
• If the depository bank accepts a check that has been clearly or obviously altered, it may be deemed negligent and held liable.  

Paying Bank’s (Drawee Bank’s) Liability: The paying bank (the account holder’s bank) is generally expected to pay checks according to the drawer’s original, unaltered instructions.

• If the paying bank pays an altered check, it may have to re-credit the drawer’s account for the amount of the alteration, unless it can prove the drawer’s negligence contributed to the alteration or that the drawer failed to report the alteration in a timely manner.  
• The paying bank can, in turn, seek to recover from the depository bank based on the presentment warranties regarding alterations.

The UCC provides a complex framework, and the “promptness of discovery and reporting” by the account holder is a consistently emphasized factor in determining the final allocation of loss. This underscores the critical importance of diligent and regular account monitoring by all check users. Furthermore, the concept of “negligence” in how a check was written or secured introduces a degree of subjectivity that can sometimes lead to disputes between the customer and their bank. This makes adherence to best practices in check writing and security not just a matter of prudence, but a factor that can directly influence financial liability in the event of fraud.  

Altered Check Fraud by the Numbers: Key Statistics and Trends

Recent data indicates a concerning rise in check fraud incidents, with altered checks being a significant component, largely fueled by an alarming increase in mail theft.

Suspicious Activity Reports (SARs) related to check fraud nearly doubled between 2021 and 2023, signaling heightened criminal focus on this payment method. This surge is closely linked to the theft of checks from the mail. The U.S. Postal Service (USPS) received 299,020 mail theft complaints between March 2020 and February 2021, a staggering 161% increase compared to the same period a year earlier. More recent figures show over 250,000 such complaints in 2023 alone.  

The financial impact is substantial. One estimate suggests that total check fraud attempts reached approximately $18.5 billion in 2023, with successful fraud losses amounting to about $1.4 billion. Another source estimates overall check fraud losses in 2023 to be closer to $21 billion, highlighting the variability in tracking this crime but confirming its significant scale.  

Check washing, a primary method for altering checks, is reportedly increasing in various regions. For example, Illinois saw over 17,000 reported cases of check washing from the beginning of 2022 through October of that year. The illicit market for these compromised instruments is also active, with reports indicating that washed checks are sold on the dark web; one observation noted an average of 1,325 stolen checks being sold online daily in observed dark web groups during 2021.  

The Rising Tide of Check Fraud & Mail Theft	Data Point	Source(s)
Increase in Check Fraud SARs	Nearly doubled from 2021 to 2023
Annual Mail Theft Complaints (USPS)	299,020 (Mar 2020-Feb 2021); >250,000 (2023)
Percentage Increase in Mail Theft YoY (Mar 2020-Feb 2021)	161%
Estimated Annual Losses from Successful Check Fraud (2023)	~$1.4 billion (one estimate) / ~$21 billion (another estimate)
Average Stolen Checks Sold Daily on Dark Web (observed groups, 2021)	1,325
Reported Check Washing Cases (Illinois, Jan-Oct 2022)	>17,000

This table starkly illustrates the growing problem of check fraud and its direct correlation with the increase in mail theft, underscoring the urgency for enhanced preventative measures.

The dramatic escalation in mail theft serves as a direct catalyst for the surge in altered check fraud, as physical access to a legitimate check is the fundamental prerequisite for traditional alteration methods like washing or adding information. This highlights a critical vulnerability in the payment ecosystem. While individuals and businesses can adopt safer mailing practices, the sheer scale of mail theft suggests a systemic issue that requires broader attention and solutions from entities such as the USPS and law enforcement agencies to effectively curb this avenue of fraud.  

Frequently Asked Questions (FAQ) about Altered Check Fraud

This section aims to answer common questions regarding altered check fraud, drawing upon the information discussed.

• What is check washing? Check washing is a fraudulent practice where criminals steal legitimate checks and use chemicals (like common household solvents) to erase or “wash” off the original ink, particularly the payee’s name and the amount. They then rewrite the check to themselves or an accomplice, often for a much larger sum, before cashing or depositing it.  
• How can I best prevent my checks from being washed or altered? The best prevention involves a combination of practices: use a black gel pen with indelible ink when writing checks; fill all blank spaces on the payee and amount lines; mail checks securely (preferably from inside a post office); monitor your bank accounts and cleared check images regularly; and consider using electronic payment methods instead of paper checks whenever possible.  
• How do criminals typically obtain checks to alter? The most common method is through mail theft—stealing checks from unsecured residential mailboxes, USPS blue collection boxes, or even from within the postal system itself. Other methods include insider theft from businesses or dumpster diving for discarded checks.  
• How prevalent is altered check fraud and check washing? Altered check fraud, particularly check washing, is reported to be on the rise, largely due to an increase in mail theft. Specific regions have seen significant spikes in reported cases.  
• What should I do if I discover I’m a victim of altered check fraud? Immediately contact your bank to report the fraud, close the compromised account, and dispute the unauthorized transactions. File a report with your local police department. If mail theft was involved, report it to the U.S. Postal Inspection Service (USPIS). Also, file a complaint with the Federal Trade Commission (FTC).  
• What are banks doing to help prevent check washing and alteration fraud? Banks employ various measures, including reviewing checks for noticeable alterations, training staff to spot red flags, and notifying customers of suspicious activity. For business customers, many banks offer services like Positive Pay, which is highly effective in matching checks presented for payment against a list of checks legitimately issued by the company, thereby catching altered or counterfeit items before they are paid.  
• What is the main difference between an altered check and a counterfeit check? An altered check starts as a legitimate, valid check that has been illegally modified (e.g., payee or amount changed). A counterfeit check, on the other hand, is an entirely fake check created from scratch, often using stolen account information, to look like a genuine check.  

Conclusion: Vigilance is Key to Combating Altered Check Fraud

Altered check fraud, driven significantly by the escalating problem of mail theft, remains a potent threat in the financial landscape. The methods employed by fraudsters, from traditional chemical washing to digital “cooking,” demonstrate a continuous adaptation to overcome security measures. The consequences for victims, both individuals and businesses, can be severe, encompassing direct financial losses, operational disruptions, credit damage, and considerable emotional distress.

However, vulnerability to this type of fraud is not insurmountable. A multi-faceted approach to prevention can significantly mitigate the risk. This includes meticulous check writing habits, such as using indelible ink and eliminating blank spaces; secure mail practices that bypass easily accessible mailboxes; diligent and regular monitoring of bank accounts and cleared check images; and the use of high-security check stock. For businesses, the implementation of robust internal controls and the adoption of bank-provided services like Positive Pay are particularly crucial and effective defenses.

Ultimately, while the allure of paper checks may be diminishing in an increasingly digital world, their continued use necessitates ongoing vigilance. By understanding the tactics of fraudsters, recognizing the warning signs of alteration, and consistently applying recommended preventative strategies, individuals and organizations can better protect their financial integrity. Should fraud occur, prompt and informed reporting to banks and law enforcement agencies is essential to limit the damage and aid in the pursuit of those who perpetrate these crimes.