Check washing fraud is rapidly evolving, and scammers are becoming more skilled at manipulating checks to steal money before anyone notices.
Today’s criminals use a mix of chemical washes, stolen mail, and digital tools to alter checks with alarming accuracy.
The good news is that there are reliable strategies to identify red flags early and prevent fraudulent checks from becoming costly losses.
In this article, we’ll break down what check washing fraud is, how scammers carry it out, and what practical steps you can take to protect yourself.
Check washing fraud occurs when a scammer steals a legitimate check and uses chemicals to erase the handwritten details, typically everything except the signature. They then rewrite the check, changing the payee’s name and often increasing the amount.
Once altered, the check is deposited or cashed, allowing the thief to pull money from the victim's account before they even know something is wrong.
This type of fraud is rapidly increasing, and the data reveal just how serious the problem has become. Here are the latest statistics:
Check washing fraud doesn’t happen overnight. It’s a process that typically requires a few steps:
Scammers can’t alter a check until they steal one, and mail theft is their favorite tactic. They often target residential mailboxes, especially those with the flag up as it signals that outgoing payments may be inside.
Criminals also break into USPS blue collection boxes, hit postal facilities or mail trucks, and, in more serious cases, even rob postal workers.
Once they have a stolen check in hand, scammers use a technique called check washing to erase the handwritten payee and dollar amount, allowing them to rewrite the check for their own benefit.
They usually preserve the authentic signature, often by covering it with tape, while using readily available solvents or household chemicals to break down common inks, leaving the check looking legitimately “blank.”
Some fraudsters now skip chemical washing altogether by digitally scanning a check, editing the details, and printing a highly convincing counterfeit.
After removing the original ink and drying the check, scammers rewrite the payee and amount, typically using permanent ink that cannot be easily altered again.
They may make the check payable to themselves, a cooperating “mule,” or a fabricated identity backed by a fake ID. They also tend to inflate the amount, turning an ordinary $100 payment into something like $1,000 by simply adding a zero.
With the check now tailored to their chosen name and inflated value, the scammer may:
When a washed check slips through the system, it often appears legitimate at first, so the bank credits the scammer and pulls money from the victim’s account during normal processing.
By the time the fraud is discovered, the thief has usually withdrawn or transferred the funds, leaving little hope of recovering the funds.
In the end, the victim’s balance is depleted, the scammer disappears with the cash, and the bank is left to sort out the fallout.
In most cases, banks, not consumers, absorb the loss, but the outcome can depend on timing and specific circumstances.
When a bank accepts a washed check, the consequences can ripple throughout the organization and affect its operations, security efforts, and customer relationships. Aside from the direct financial loss, banks must also manage:
Banks and credit unions can significantly reduce exposure to check washing fraud by taking proactive measures. Below are several key strategies and safeguards to help prevent these schemes:
When expectations are clearly defined and consistently applied, from frontline staff all the way through back-office operations, fewer gaps are left for criminals to exploit.
Well-trained employees play a critical role in identifying the physical, behavioral, and situational red flags that signal potential check fraud. Consistent, practical training ensures staff can spot issues like washed or altered checks early and take the right steps to prevent losses.
Traditional batch reviews and manual checks aren’t fast enough to keep up with today’s fraud attempts. Real-time monitoring allows the bank to identify high-risk deposits the moment they’re submitted, reducing losses before funds move.
VALID Systems specializes in real-time check-fraud screening. Its CheckDetect module reviews check deposits across mobile, ATM, and in-branch channels all at once. Using AI, it flags suspicious items the moment they’re submitted, giving your team the chance to stop altered or stolen checks before they clear.
Banks that use tools like this have been able to identify more than 75% of potential check-deposit fraud up front, dramatically cutting down on unexpected losses.
Strong verification tools help confirm a check’s authenticity before any funds are released. These safeguards reduce the chance of altered, duplicated, or counterfeit items slipping through.
VALID’s CheckDetect delivers industry-leading counterfeit detection by analyzing inconsistencies across check fields, identifying mismatched templates, and flagging MICR or serial number anomalies in real-time.
Its AI-driven image forensics can spot subtle signs of forgery or alteration that manual review rarely catches, helping institutions stop counterfeit checks before they ever enter the clearing process.
Organized groups rarely target just one institution, often striking multiple banks in coordinated waves. Sharing timely intelligence helps institutions identify emerging patterns sooner and stop criminals before losses spread.
VALID’s Edge Data Consortium gives institutions a powerful advantage by enabling secure, AI-driven data sharing across banks and credit unions.
By pooling intelligence on fraudulent items, behaviors, and emerging patterns, Edge identifies coordinated fraud activity far earlier than any single institution could on its own, helping stop counterfeit checks, account-opening scams, and deposit schemes before they escalate.
To understand the serious financial and personal consequences of check washing fraud, consider several recent real-world cases.
A New York check-washing ring operated from early 2022 through mid-2024, stealing mail and altering checks, a scheme that caused millions in losses, including about $176,000 taken in a single 2023 theft.
The group was led by Michael Edwards and included Shakeemo Hill, William Hill, Alixandria Lauture, Shuron Malone, and Carlos Mercado.
They used stolen postal keys to pull mail from collection boxes and then chemically or digitally rewrote the checks.
In 2023, a former Florida mail carrier was caught trying to sell stolen USPS arrow keys along with nearly $550,000 in stolen checks.
Arrow keys open secure mail collection boxes and cluster mailboxes, giving thieves access to large volumes of mail.
By offering both the keys and the stolen checks, he directly supplied the tools needed for large-scale check-washing activity. He was arrested after attempting to sell them to an undercover agent.
Six people were charged during the pandemic with attempting to steal $80 million by cashing fraudulent checks tied to COVID-19 relief funds.
Some of these checks were believed to have been obtained from government mailings and then altered or washed before being deposited.
The group inserted large volumes of fraudulent checks into the relief system to exploit the urgency and scale of federal aid programs.
VALID Systems delivers next-generation fraud prevention powered by machine learning, cross-bank intelligence, and real-time transaction scoring.
By processing over $4 trillion in annual check volume across major U.S. institutions, VALID provides the advanced visibility and predictive analytics required to stay ahead of rapidly evolving fraud threats.
Schedule a consultation to see how VALID can reduce check fraud losses, streamline reviews, and deliver a safer, faster experience for your customers.