Three legislators recently forwarded correspondence to the American Bankers Association (ABA), citing concerns regarding increasing check fraud scams.
U.S. Sen. Sherrod Brown (D-OH), chairman of the Senate Committee on Banking, Housing, and Urban Affairs, and Committee members Catherine Cortez Masto (D-NV) and Elizabeth Warren (D-MA) sent the letter to ABA President Rob Nichols.
Check fraud scams cost consumers more than $800 million last year.
“We write to express our concerns regarding the devastating effects that check washing scams are having on working families across the nation,” the legislators wrote. “Check washing occurs when an individual steals a check, usually from the mail system, and washes it in household chemicals to remove the ink. Thieves will then change the payee name and the dollar amount, followed by fraudulently depositing the check, leaving consumers scammed out of potentially thousands of dollars.”
Check washing has become an elaborate and organized method of successfully scamming consumers and banks.
“In light of the many concerns raised by consumers, we are concerned by banks’ inability to effectively identify washed and other types of fraudulently-altered checks, timely process claims, and reimburse those that have lost thousands of dollars,” the legislators concluded. “Consumers should not be left waiting for their accounts to be made whole again. It is the responsibility of banks to properly address these concerns and to reimburse consumers in a timely manner.”
The senators, encouraged the ABA to develop a plan to assist its members in addressing the issue by reducing check fraud and resolving fraud claims while also providing a briefing regarding actions to address check fraud scams.