An Old Scam Is Making a Comeback: Check Washing

(MUSIC INTRO)

[00:00:01] Bob: This week on The Perfect Scam.

[00:00:03] (newsclip) At least 2600 mail carriers were attacked nationwide, with at least 170 arrow keys stolen.

[00:00:09] (newsclip) You just rob your letter carrier, gain access to a blue collection box or a relay box, and boom, you have thousands of dollars. 

[00:00:18] David Maimon: We're not talking about a single person, a single criminal targeting mail carrier for the arrow keys, we're talking about very sophisticated crime groups.

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[00:00:31] Bob: Welcome back to The Perfect Scam. I'm your host, Bob Sullivan. There's a lot of focus on high tech crime nowadays. Artificial intelligence, deep fakes, hackers, and all that is important, but there's an old-fashioned crime that's been making a dramatic comeback lately, and people all over the fraud world are ringing alarm bells about it: check washing. Stealing a check out of the mail, washing off the payee and other information, then cashing the check and stealing money from the check owner's account. This crime has been updated with some high tech elements, but also there's some really troubling violence too, particularly targeting mail carriers. The US Treasury Department says check washing has basically doubled in the past year, and $800 million has been stolen from consumer accounts. While most consumers eventually get their money back from the bank, it can take much, much longer than a typical case of credit or debit card fraud. Now this might all seem strange since Americans write far, far fewer checks today than they did in the past, a good 80% less than they did in 1990, but that's part of the reason check fraud is now thriving. Something Nashville resident, Mark McPherson learned the hard way recently.

[00:01:56] Bob: You got a phone call in the middle of the day from your bank saying someone tried to cash a check, right. Do you want to just tell me what happened?

[00:02:03] Mark McPherson: Yeah, a teller uh at Local Truest Bank called me and asked me if I had written a check to a guy by the name of, I believe it was Richard Starks, and for about $2500, and I had to think for a moment because, you know it, it came out of my business account, and I was trying to wonder if it was, you know, something I had written to, and so I asked for the check number, and when she told me the check number, I knew it wasn't because I, I had used that number that morning to write a check to pay for my business insurance. And I said, "No, that's, that's not it. And so she said, you know, that they had their doubts, and that there had been a problem with people trying to cash fake checks. And they told me that I could come by and pick up the check uh later on that day. So I went uh to that branch and picked it up.

[00:02:55] Bob: And when you picked it up, what did you see?

[00:02:58] Mark McPherson: Not the check I had written. They, everything was completely erased except my signature, and they told me there was a process called check washing. And I had never heard of it; I had no idea. They had evidently stolen the check out of my mailbox because I had left it for the postman to pick up that day, and they just used household products. They would put a piece of like scotch tape over your signature, so they don't wash out your signature. But they put it inside this product, and they wash all the ink out of your check, then they write it for whatever they want to. And this guy had written it for, it was about $2500 and a little bit, and he had actually in the memo field had written, "Great Job" and a couple of exclamation points. And who told the teller that he had done some electrical work for me.

[00:03:51] Bob: Wow. And when you looked at this check, I mean it, did it look legit? Could you tell it had been washed?

[00:03:57] Mark McPherson: Oh yeah. No, I had no idea. I had no idea it had been washed. As a matter of fact, they had folded it quite a few times, they had tried to make it look like you know it had been in somebody's wallet for, you know, a couple of weeks. I mean it looked; it looked completely real.

[00:04:11] Bob: Just try to explain to people, what, what's it like to get a phone call from the bank like that?

[00:04:16] Mark McPherson: (laugh) Uh, it was pretty shocking. I mean really I was; I don’t mail a lot of checks. I pay almost all of my bills online. My insurance company though is a little complicated to pay online, and so they're really the only check I ever mail. And I had never heard of anything like this.

[00:04:36] Bob: But since Mark has come forward with his story, he's heard from a lot of people who have had this happen.

[00:04:42] Mark McPherson: One gentleman I met was an ex-private investigator and he had had nine checks stolen, 'cause he was trying to mail them all the same day, and his checks were actually cashed for about $7000.

[00:04:55] Bob: Wow! What happened to the money?

[00:04:57] Mark McPherson: The bank reimbursed him for it because it was, you know, it was not a real check. He hadn't, he hadn't written it for those--, that amount, and they had not contacted him to verify the checks.

[00:05:08] Bob: And while Mark's bank did stop the fraud before any of his money was stolen, he still feels like a victim.

[00:05:15] Bob: I know some people are going to listen to this and they're going to think, okay, so the bank caught it, you, you weren't out any money, uh, and even if you were the bank would have given it back to you, so what's the big deal? But I imagine that even though your bank account was safe, you feel kind of violated by this, no?

[00:05:32] Mark McPherson: Oh, absolutely. Absolutely. I couldn't imagine something like that happening. I've had, you know, some problems before in the past, had, you know, been robbed and had some things stolen before, and you, you feel violated, but this was something I just never expected. And then you start going back and going, you know, could this have happened before and I, I mean I'm pretty good with my checking account, and, and knowing, you know, what has cleared and what hasn't, but I really started watching my checking account a lot closer after that.

[00:05:59] Bob: And so should you. Here are some remarkable numbers to know. FinCEN, the Financial Crimes Enforcement Network, operated by the US Treasury Department issued an alert a couple of months ago saying there was a surge in check fraud. Banks filed 680,000 reports of check fraud to FinCEN last year, up from just 350,000 reports in 2021. Meanwhile, the US Postal Inspection Service reported about 300,000 complaints of mail theft in 2021, more than double the prior year's total according to the Associated Press. Our next guest, David Maimon, believes he knows what's going on.

[00:06:42] David Maimon: I'm a Professor at Georgia State University, and the Director of the Evidence-Based Cybersecurity Research Group.

[00:06:48] Bob: And what is that?

[00:06:49] David Maimon: The Evidence-Based Cybersecurity Research Group is a, is a research group aimed at understanding what works and what doesn't in the context of online crime prevention.

[00:06:58] Bob: His group started picking up evidence that check washing was making a comeback several years ago because they monitor online forums and chat tools where washed checks are bought and sold, just like stocks on Wall Street. We'll get to that, but first I asked him to explain what exactly is check washing?

[00:07:17] David Maimon: Washing checks is, is essentially the act of soaking the check in a bowl with some liquid in it, usually nail polish remover or, or other type of chemical that will allow the criminal to simply remove the content that the legitimate bank customer or check owner wrote on the check. So they will simply remove the content, leave the check to get dry, and then they'll be able to uh, use the fresh check to simply cash it.

[00:07:45] Bob: And there's a similar criminal tactic called cooking a check.

[00:07:50] David Maimon: Cooking a check is, we're essentially are talking about folks taking the information from the checks and using photoshop or any other software to simply, you know, create forged checks. So instead of using the original check, they simply produce very high quality checks that they print taking the information and the signature directly from the checks they stole. That's, that's essentially what cooking a check means.

[00:08:15] Bob: Okay, so like in that, that's creating a check out of nothing essentially, right, as opposed to erasing a check and rewriting information on it?

[00:08:22] David Maimon: Right.

[00:08:25] Bob: Why is there a huge increase now rather suddenly? Well, unfortunately, increased violence seems to have something to do with it.

[00:08:34] David Maimon: We have strong reason to believe that the check washing increased during the last two years or so simply because um, criminals were able to get access to our checks by robbing mail carriers, opening USPS mailboxes, and stealing our mail. This is, we believe, was a major driver for what we're seeing right now. I mean uh we have been collecting data during the last two years, washed checks and, and stolen checks and forged checks from all over the country. We took this data we collected on a monthly basis, and we correlated it with data USPS released with respect to attacks against their mail carriers, and what we, what we find is, is a very high and positive correlation between the volume of attacks happening against mail carrier in specific location and the volume of checks, washed checks, forged checks, stolen checks that we find from those locations.

[00:09:34] Bob: Some of the stories about mail carrier attacks are very disturbing. Listen to this from WFTV in Florida.

[00:09:43] (newsclip) That was also the case in Orlando in March when police say the two men you see in this video approached a mail carrier at a condo complex off of Walden Circle. The postal worker was found beaten with a severe head injury...

[00:09:55] Bob: Criminals aren't looking to steal bags of mail from these carriers. What they're after are keys. Master keys known as arrow keys that open lots of mailboxes, or other master keys to apartments or condo complexes.

[00:10:11] David Maimon: The arrow key which open the USPS blue collection box will be one type of key, and then the residential collection boxes, there'll be a different key for them. But essentially what the criminals do once they rob the mail carriers is rob them from both keys, both types of keys, and uh yeah, I mean to your question, uh one key may open multiple mailboxes. So one arrow key may open hundreds of USPS collection boxes, you know same for residential collection boxes keys.

[00:10:42] Bob: Think about it. Most mail carriers are out there alone and follow very predictable patterns. They are very vulnerable, and the numbers bear that out. Again from WFTV...

[00:10:55] (newsclip) And data obtained by 9 Investigates uncovered from January 2019 through June of this year, at least 2600 mail carriers were attacked nationwide, with at least 170 arrow keys stolen.

[00:11:08] Bob: Here's what Postal Police Officers Association President Frank Albergo said to NBC News about the surge in violence against mail carriers.

[00:11:17] (newsclip) They don't have to rob a bank anymore. You just rob your letter carrier, gain access to a blue collection box or a relay box, and boom, you have thousands of dollars.

[00:11:27] Bob: The, I mean, to be honest, I think about mail carriers all the time walking around by themselves. That seems like their profession is a bit more tricky today than maybe it was a couple of years ago.

[00:11:38] David Maimon: I, I agree. I mean, uh, so I've been doing this for the last two years or so, and, and uh, I come to think about mail carriers nowadays as folks who essentially deliver money from one place to another. So like the Brinks drivers, the only thing that is missing is, is the protection, the appropriate protection. So the mail carriers are not really driving their cars with guns or anything that will be... or anything that will allow them to protect themselves in the case of criminal event against them. And to add to that, there's really no police which could really protect the mission of delivering mail from one point to another.

[00:12:15] Bob: But why is this happening now?

[00:12:19] David Maimon: I think that because of in the lack of, of a, of a better word, we have mail carriers walking around without good protection. The USPS police is, is not really providing protection at this point on the street. And so one of the hypothesis we have is that the criminals identify that issue and so what they do is they take advantage of this opportunity where they see a mail carrier in, in their car with, with no protection, no deterrence, and so they simply target those mail carriers for, for the keys.

[00:12:53] Bob: To be sure, in many ways it's much easier to cash checks today than it used to be. You can do it from home on your smart phone. Does that play a role? Not really, David thinks.

[00:13:06] David Maimon: In order for you to do that you need to have an account that will allow you to, to do so, right, without raising any suspicions fro--, from the banks. Having said that, if you use your bank account to deposit a stolen check, sooner or later the victim will complain, and what will happen if you, if you deposit the stolen check to your account, the bank will, will reverse the transaction, right. I mean and, and you are potentially going to be in trouble, right. So, so it's, it's not that simple.

[00:13:38] Bob: On the other hand, the ease of opening new bank accounts does make check washing easier. This technique has criminals combining old and new fraud methods which is just one way criminals have really scaled up check washing.

[00:13:52] David Maimon: So in the past we've seen folks washing the checks and then go to retail shops and cash the checks there. So Walmart, Kroger, all those retail shops which allow you to cash a check, so, you know there's a limit to this operation at the end of the day because there's a limit to how many people we can send to those location and simply cash the checks. And so what criminals decided to do was they decided to actually deposit the checks also in, in bank accounts. The problem is that they need to have suitable bank accounts for you to work with, right, I mean so there are a couple of ways around this issue. The first, you, you can defraud people and send them those checks to deposit in their legitimate bank accounts and then ask those individuals to send you a portion of the money. In other words, you know I can hire you, for example, to do some work for me, and, you know, at the end of the month I will send you a stolen check and I will tell you go ahead, deposit the check in your account. Send me 100 or 200 or 300 dollars, right, just for me to sort of you know, uh know that the check has been deposited or, or I'm, I'm going to overpay you a little bit, and, and so you know, that way once the bank realized that you deposited a stolen check, me, as the criminal, you know, I already got the $500 from you and, and you're the victim. So that's one way to go. The other way to go, and that's where we're seeing a dramatic increase during the last year and a half or so, is to simply create bank accounts under fictitious identities. All right and this is one of the things that we are seeing happening a lot right now. We're seeing mule accounts, drop accounts which the criminals simply open all over in all bank branches personal bank accounts, business bank accounts; those banks, and then they grow those bank accounts for a period of time, three, four, five months, have some transactions there. And then once they need to deposit the checks and once they need to deposit high balances checks, uh they simply use those accounts, right. So once you deposit the check for $10,000 in the drop account, you know, the account will be clear or the check will be cleared in two days, you will be able to take the money. If the victim complains, the bank potentially will shut the, will shut down the account, but at the end of the day they will not know who opened it, because again, those accounts are being opened under fictitious identities.

[00:16:16] Bob: Criminals spend months working on the reputation of these drop accounts. And when they figure the bank is convinced the new account is legit, they cash out a big dollar check and run. Another big development in what David calls the supply chain of check fraud, is the addition of so-called walkers into the fraud model. What are walkers?

[00:16:40] David Maimon: Yeah, that's, that's a term that we started talking about a while ago, and then uh folks started using as well. So the walkers, and we actually have videos and images of the walkers; the, the walkers are folks the criminals are recruiting to actually get inside the retail shops or the banks and help them either cash the check or deposit the checks and you know get the, get the balance on the checks. And the runners are the end of the supply chain. What they will do is they will take a bunch of checks, they will find walkers; those walkers will go to those retail shops and, and the banks, and simply cash the checks, right. The runners are really good in finding the walkers who will not raise suspicion. We are usually talking about older people, sometimes we're talking about homely, homeless folks who criminals simply manufacture a fake driver's license, they give them the check, and then they, they send them uh to the retail locations to uh cash the checks.

[00:17:35] Bob: Are many of these people like innocent bystanders, if you will. Do they know that they're participating in a crime?

[00:17:42] David Maimon: Many of them are. Some are not. I mean they're getting paid for the service, so there's a fee for that as well. The fee for a walker ranges between 100 to 200 dollars per check. But you know many of the individuals do not know that they participated in a criminal event. I mean we've seen several videos where people did not know. When the banks sort of stopped those individuals from cashing the check and started investigating them, many of them do not know that they're taking part in a, in a criminal operation. Some of them have suspicions. Some of them do not care.

[00:18:14] Bob: As you can tell, this newfangled check washing is a far cry from the days when criminals would steal checks, erase the entries, and try to cash them one at a time at a bank.

[00:18:25] David Maimon: So first of all, it's, it's really important for me to convey that we're not talking about a single person, a single criminal targeting mail carrier for the arrow, because we're talking about very sophisticated crime groups at this point. And the operation of robbing the mail carrier is just a, the first activity, the first operation in a very long and elaborated supply chain. Once the criminals or the group of individuals who are responsible for obtaining the arrow keys get the arrow keys, they um simply start opening mailboxes, sometimes in the middle of the night, in other cases in the middle of the day, sometimes even wearing USPS uniforms, emptying the mailboxes, finding the checks, chauffeuring the checks to hideout locations where the rest of the group along with others, sometimes drug addicts which the gang recruits to help them sort through the mail, find the checks, find the debit cards, the valuable envelopes, sort through them, and then wash the checks.

[00:19:35] Bob: And it's important to understand these crime gangs are in it for the long haul.

[00:19:41] David Maimon: So you know, the longer it takes victim to understand that their checks has been stolen that, and, and that someone deposited the checks you know in accounts that are, you know, were not really supposed to be deposited in, you know the longer the drop accounts will exist, the more money they will be able to launder and, and being stolen.

[00:19:59] Bob: So this makes a, a lot more sense to me. We're not talking about a, a criminal stealing a piece of mail and running into a, a hardware store and saying, give me $200 for this check; we're talking about something, an, an elaborate system that, that is months, maybe more and in place and the, the, the check stealers are just one small part of this big system, right?

[00:20:20] David Maimon: Yeah, that's right. I mean so, so we are talking about a very sophisticated, very elaborated supply chain at this point where you have the folks who are responsible for getting the keys from the mail carriers, the folks who are responsible for emptying the, the mailboxes from the mail, the folks who are responsible for washing the checks or cooking the checks. The folks who are responsible for fetching important information about the victims fro--, from financial institutions, from credit bureaus, you know that, that aspect of the operation is, is very important as well, because what we're seeing happening right now is that those checks, like cashing a check is just a first step in a very long road that, you know the victim at the end of the day will go through, right? Because once the criminals have the checks, they also have the victims' identities. And so what we're seeing the criminals doing right now is they take the identities from the checks, they fetch the information on those specific identities from credit bureaus, from banks, from financial institutions where those criminals have insiders, or you know moles who help them fetch all the information, and then they use the identities to open more bank accounts, to establish new credit lines without the victims really knowing that new credit lines have been established for them. Taking loans on behalf of those victims. Manufacturing fake driver licenses and then buy guns, health services; those identities are out there, and the criminals are using them as well. So it's a very sophisticated but elaborated supply chains with different actors responsible for different types of operations.

[00:22:07] Bob: Did you catch that? For some victims, having a check stolen and cashed by a criminal is just the start of a long ordeal. Criminal gangs also use the information they steal for a host of additional crimes.

[00:22:21] David Maimon: Again, we talked about fetching the information on the individuals. We also are familiar with folks uh who then take all this information and offer the information for sale on the markets we oversea. So you know, taking pictures of the stolen checks and offer them for sale. Taking the information from the check with respect to the individual or the company and offer all this information for sale as well for the criminals to use, and they have the customers who actually purchase this information and use it in the context of many types of frauds folks are working on. And we, we are talking to victims a lot, and the, the stories we hear at this point, you know, are just mindboggling in terms of you know, someone was sending a check and realized that a lot of money has been stolen from his account, but also someone has opened a new company under the identity of that individual, and then created a business account, and established a credit line under that individual name, in the business name. So it's all over the place right now. This was just a starting point, a segue if you want for a more complicated, a more sophisticated type of crime that we're all experiencing in the US at the moment.

[00:23:40] Bob: Organized criminals have operations that can learn a lot about the victims' accounts they are using. And all of that makes theft easier.

[00:23:49] David Maimon: Once you know you know the balance on the account, you will definitely be able to make decisions with respect to how much money you want to steal. Some criminals will also want to know the balance of the accounts simply because they would, would like to drain it completely, right. Yeah, you know if you know what you are doing then you probably won't be doing this at this point because two years to this issue, the banks are definitely applying more scrutiny and so if someone has $5000 uh, on their bank account, and then they see a check for $5000 being deposited, uh somewhere being cashed somewhere, there will be more red flags, and so knowing how much money someone has in their bank account is, is extremely important, especially in this day and age where their banks are on it, so to speaking in terms of determining the next moves with respect to how much money you will steal and when exactly. It, it's a very sophisticated operation. You probably will not be surprised if I tell you that these guys are very competent, right, and, and they know exactly what they're doing, they know exactly how to bypass all the controls the financial institutions have in order for them to succeed. And during the last two years they have been doing an amazing job stealing a lot of money from us all.

[00:25:06] Bob: Doing an amazing job stealing a lot of money from us all. David knows all the ins and outs of this crime because he and his team work in chat rooms and telegram channels where a lot of this illegal activity is organized.

[00:25:21] David Maimon: During the last two years and a half or so, we are seeing a movement from the Dark Net as folks know it or thought about it in the past, to criminals using encrypted communication platforms or text message applications such as WhatsApp and Telegram and ICQ and Signal and Jabbar, to support their criminal operations. So essentially what criminals do is they open shops on those platforms, they simply create groups and they allow the customers different actors on the ecosystem to uh join those groups. And on those groups what they do is essentially sell and purchase all kind of illegal commodities that they can use in their criminal endeavors. And so what my group does in the sense is monitor those platforms both on the Dark Net as well as on the criminal communication platforms such as Signal and Telegram and WhatsApp and so on in order to identify emerging trends, to really try and understand what's hot so to speaking, what are some of the new crimes folks are working on, simply because we are trying to understand how different types of technologies we are using, different types of policies we're using are impacting the ecosystem, the online fraud ecosystem on those markets I just discussed.

[00:26:42] Bob: You must see some wild things.

[00:26:44] David Maimon: We see a lot of crazy things simply because we oversee thousands of markets. At this point, our fraud operation is very extensive, so we oversee markets from all over the world, we see domestic markets, we see markets from Nigeria, from Russia of course. It, it's just mindboggling to see how fast and how competent, right, folks are with respect to thinking about new crimes, as well as with respect to the way they are adopting new technologies in order to facilitate its successful criminal uh operation. So for example, one of the things that we're seeing right now is the use of AI and Deepfake to steal from individuals, you know what I mean. We're seeing, for example, the Yahoo Boys. The Yahoo Boys are a group of criminals situated in Nigeria who are experts in, in the engagement of fraud. We see how they use real images with AI to create videos which they then use in order to communicate with their victim live, establish rapport with them, and then steal money from them. So we see those videos. It's really sad to see the victims talking to puppets at the end of the day, sock puppets that the criminals uh are using, developing trust, developing feeling towards those, those figures. And then we're seeing how much money they are losing.

[00:28:07] Bob: And among those crazy things they see are six-figure and even seven-figure stolen checks for sale.

[00:28:15] David Maimon: I've been doing this for the last two years, and uh, to tell you the truth, every time I see a check with over, you know, $100,000 on it, I'm, I'm surprised. The problem is that I see a lot of those checks, especially the due day of tax season. You can tell that before at, at the end of April, we were seeing hundreds of checks being sent over to the Department of Treasury from all over the country and, of course, those checks have been intercepted by the criminals; checks with very high balances on them. And I, and I'm talking about $800,000, a million dollars, right, being sent to the Department of Treasury. So that, that is surprising and alarming. We, we're seeing a lot of checks that the government sends to citizens as well. So think about all the IRS checks, where people are getting their tax refunds using checks. Again, millions of dollars people are getting over their tax refunds. And, and it's alarming to see. I mean I can tell you that uh in one case we were able to track four checks, four IRS checks, each one on, on an amount of, the largest was $250,000, and because we were seeing those four checks, we immediately contacted the legitimate owner of the company. The owner, of course, thanked us, and then started an investigation and, and reached out to uh the relevant authorities, and a couple of days after he reached out and told us that, you know, it was good we contacted him because he found out that the criminals have used those checks to open a new business with the same name, just adding another letter at the end of the company, opened a business account, and then deposited those checks in this bank account, stealing $2 million this way.

[00:30:02] Bob: And in these chats, criminals often compete with each other, try to outbid each other for stolen checks.

[00:30:10] David Maimon: We've been doing for the last two years, so when, when they first started, like in 2021, mid-2021, we're talking about personal checks going from 120, between 120 to 170, and then business checks going for 250. Sometime along the way with inflation and with the realization that uh this is a, a very lucrative business in that you can steal a lot of money with the checks, the prices of checks have increased. So I think personal checks now with low balances on them, can go for up to 250. The business checks may go starting at 650 and up to 1000, but, but what we're seeing that plays a very important role now is, is the balance on the checks. So I mentioned earlier we have seen a lot of checks being sent to the Department of Treasury, in the mid, in the middle of April with, with very high balances; those checks were often for sale for very, very high prices, right. We're talking about checks being offered for sale for $2000, for $3000 uh, and what, again, drove that high prices were the balances on the checks.

[00:31:16] Bob: After seeing all this crime firsthand, what does David recommend to consumers? First, he says, freeze your credit report so...

[00:31:25] David Maimon: ...no one can establish a new credit line under your name and that means that they cannot really hurt your credit score. So even if your check has been stolen, the criminals will not be able to do a whole lot with respect to establishing, you know, new debt for you. It doesn't mean that they will not be able to open a new bank accounts under your name, but you know there's a limit to what they will be able to do with respect to your credit scores and taking loans and stealing money under your name. So in addition to the credit freeze, another important service that uh, I would strongly recommend to businesses and individual is the identity theft protection plans. Those are really good usually and they will simply alert you when someone is using your identity to do pretty much anything, right, any financial transaction that you're not responsible for, even if you are trying to fly and someone is trying to identify you, that you will get a notification there. So those identity theft protection plan, folks should definitely have both for themselves and for their businesses.

[00:32:26] Bob: But the biggest piece of advice he offers, and you'll hear this from a lot of people right now is to keep the number of paper checks you send to a minimum, and be very, very selective about the way you drop them in the mail.

[00:32:41] David Maimon: To respect to sending checks, you know, I've been asked a lot whether I recommend folks sending checks and, and sending or paying their bills using checks. I, I think that at this point, we all understand that you should definitely shouldn't use the blue collection box. You should definitely shouldn't leave mail in, in your own private mailbox. If you need to send a bill, you might as well just go to the post office and leave your mail inside the post office with the clerk or mailbox that is situated inside the post office. That'll be your best bet to, to send a check to its destination.

[00:33:24] Bob: But there's one more important point David had to share. These criminal networks are out there all the time recruiting new walkers, people who cash their fraudulent checks, regular people who won't arouse the suspicion of a teller. People just like you and me. You might get approached playing an online game or on an online dating site or anywhere really.

[00:33:48] Bob: There might be people who are listening to this podcast who could be a candidate to be a walker, so we want to give a warning to them as well. What sorts of things should they be looking out for and suspicious of?

[00:33:58] David Maimon: Sometimes folks who will reach out to you, they will hire you online to perform some kind of a task, and then they will send a check to you asking you to deposit it, and then send the new employers 200, 300, 400 dollars from that particular transaction. That, that is a major red flag for the fact that someone is potentially, is using you as, as a money mule. Sometimes folks will reach out to you, you know, people are looking for jobs on, on all those classified ads, they reach out to people over there. They will ask them to, you know, engage in some, some simple tasks and then they will send them $5000 for them to uh simply deposit in their check account and then send two or three or, or $400 to the criminals. That's, again, is a major red flag which folks should be aware of.

[00:34:49] Bob: The best way consumers can protect themselves is by doing something everyone should do anyway. Look carefully at your checking account, at least once a month, and if you spot any unusual activity, tell your bank's fraud department immediately. Time is of the essence. Consumers can lose their ability to get a refund for failing to report fraud in a timely manner. But here's what's really important to understand about check washing. You probably know it's relatively easy to dispute charges and get your money back after a bout with credit or debit card fraud or even online bank hacking. Those situations are usually governed by federal regulations that are pretty consumer friendly. Victims must receive at least a provisional credit within 10 days, for example. With check fraud, things are not so simple. That's governed by state laws. And while consumers are entitled to refunds in almost all cases, the investigations can involve multiple banks, can drag on for a long time, and refunds can take weeks or even months.

[00:35:50] David Maimon: Most often the banks will reimburse you for the stolen money. The problem is, it, it sometimes will take time. I know about victims it took seven months for them to get their money back from the banks, and for some folks, you know that, that time period is very difficult to, to wait because they need the money.

[00:36:09] Bob: The problem of delayed refunds for victims is so bad that in March a group of three US Senators wrote to the American Bankers Association urging banks to come up with a new plan for resolving check washing fraud claims. "Consumers should not be left waiting for their accounts to be made whole again," the letter said. Meanwhile, while it's not common, if the bank can argue that a consumer was negligent, say you lost your checkbook and didn't report it promptly, well the bank can try to decline the refund. Mark was lucky. His bank spotted the fraudulent check before money was taken out of his account, so he didn't have to wait for reimbursement. But now that he knows just how serious and prevalent the problem is, he's speaking out.

[00:36:54] Mark McPherson: I want as many people as possible to find out about this, because most people can't imagine that something like this could have happened. You know I, what I thought, you know my, my insurance company is just four letters. And so I thought, well they just, you know maybe they, they wrote over the top of those four letters, and then maybe, you know then they maybe changed the amount, you know, and added 2 on the front of it or something like that. But then when I saw it, I was completely shocked that, that none of my writing except my signature was on the check.

[00:37:24] Bob: Has this incident impacted the way that you pay your bills?

[00:37:28] Mark McPherson: Oh, absolutely. I, I don't write a check at all now. I mean, they, I was told that, and it's true, there is a, a certain pen that is made by Uniball, it's a gel pen, and uh I use that if I do have to write a check because that ink can't be washed out. It's a gel-based ink, it can't be washed out, but any other pen, they can, they can do it to, but I, again, I have not put one check in the mailbox since then. If, if I have had to mail a check, I go to the post office and I go inside and mail it inside because I've talked to some postal employees; they are actually taking like a coat hanger and putting like gum on the end of it and sticking it in those blue boxes that are on the outside of the post offices at like you know 2 or 3 o'clock in the morning and trying to fish out letters that are in there.

[00:38:20] Bob: Wow.

[00:38:21] Bob: After Mark told friends and neighbors about what happened to him, he had to deal with something that comes up a lot. People wanted to blame him. Fortunately, that hasn't kept him from speaking out.

[00:38:32] Mark McPherson: Yeah, if it happens to you, don't feel stupid, you know because we're, we're all grew up with the idea that, you know, when you want to mail something, put it in your mailbox, pull the flag up, and the mailman will get it. I posted it on social media for my neighborhood just to kind of let people know this had happened, and about 70% of the reactions from people was basically, you're an idiot because you put mail inside your mailbox. And I just, I could not believe the attitude that people took on it, because and, and again, these were mainly younger people and who don't mail checks, and so they didn't, they don't really understand the culture that I grew up in.

[00:39:12] Bob: But after this experience, Mark has definitely changed some of his habits, and he hopes you will too.

[00:39:19] Mark McPherson: Number one, never put a check in your mailbox. That is for, for whatever reason, you know, you need to pay something, don't put a check in your mailbox. You know I live in what would be considered a upper middleclass neighborhood. I have talked to people that are in poorer neighborhoods, I have talked to people in extremely wealthier neighborhoods that have had the same thing happen to them. So there's no reason whatsoever to ever put a check inside your mailbox. If you have to write a check, write it, a gel-based check. If you have to mail it, go inside the post office. And I know for a lot of people that, that's a hassle, but you never want to go through this.

(MUSIC SEGUE)

[00:40:03] Bob: You never want to go through this. Crime always evolves, and sometimes what is old is new again, so we all just have to be careful and heed these new warnings. Criminals are out there looking to steal your checks. Make it as hard for them as you can.

(MUSIC OUTRO)

[00:40:24] Bob: If you have been targeted by a scam or fraud, you are not alone. Call the AARP Fraud Watch Network Helpline at 877-908-3360. Their trained fraud specialists can provide you with free support and guidance on what to do next. Thank you to our team of scambusters; Associate Producer, Annalea Embree; Researcher, Sarah Binney; Executive Producer, Julie Getz; and our Audio Engineer and Sound Designer, Julio Gonzalez. Be sure to find us on Apple Podcasts, Spotify, or wherever you listen to podcasts. For AARP's The Perfect Scam, I'm Bob Sullivan.

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