Consumer Payment Card News

Check Washing

The National Automated Clearing House Association warned consumers yesterday to avoid being victims of check washing. NACHA says the best way to protect yourself is to switch to paying bills electronically. Check washing is an emerging crime in which thieves steal checks out of people’s mailboxes and use a chemical solution to erase the ink while leaving the pre-printed information intact. The checks are usually bill payments for utilities, insurance, mortgages and other services. The criminals then make out the checks to themselves. Reportedly check washing losses will top $2 billion this year.

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The National Automated Clearing House Association (NACHA) is offering security tips to help consumers avoid being victims of check washing.

Elliott C. McEntee, President and Chief Executive Officer of NACHA, said, “Consumers can protect themselves from check washing by paying their bills electronically. After all, if you don’t use a check, it can’t be stolen, washed, or forged.”

Check washing is an emerging crime in which thieves steal checks out of people’s mailboxes and use a chemical solution to erase the ink while leaving the pre-printed information intact. The checks are usually bill payments for utilities, insurance, mortgages and other services. The criminals then make out the checks to themselves. ABC News has reported that check washing could be a $2 billion-a-year problem.

“There are several ways to pay your bills electronically,” explained Harold J. Piotrowski, Vice President of Charter One Bank in Cleveland and the Chairman of NACHA. “One is Direct Payment, in which you authorize a company to access your account electronically to pay the bill. A good example is a monthly mortgage payment. Almost forty percent of all households pay at least one bill a month this way.

“Another way to pay bills electronically is to use technologies such as telephone banking, PC banking and Internet banking.”

Consumers who want to use Direct Payment should contact the companies that regularly bill them. These include: insurance companies; utilities such as gas, electricity, oil, water, sewer, and telephone; other services such as cable television and Internet; loans and credit payments such as mortgages, home equity loans, car loans, lines of credit, and credit cards; and other recurring payments like health club memberships.

Consumers who want to use electronic banking services should ask their financial institutions which of these services they offer. Piotrowski continued, “For additional security, people should also receive their pay or Social Security benefits by Direct Deposit to eliminate the risk of checks being stolen.” Employees can ask their employers about the availability of Direct Deposit, and Social Security recipients are encouraged to sign up through their financial institution or by calling the Social Security Administration at 1-800-772-1213.

Finally, McEntee points out that paying bills electronically provides other benefits besides security. “If you pay 10 bills a month electronically instead of by check, you will save $38.40 a year in postage. You’ll also use about 5 fewer books of checks each year. And if you use Direct Payment, you will never be charged a late fee again in your life.”

About the National Automated Clearing House Association (NACHA)

NACHA represents more than 13,000 financial institutions through its 35 regional ACH associations, six councils and Affiliate Membership program. A leader in the payments industry, NACHA develops operating rules for the Automated Clearing House Network and for emerging electronic payment solutions in the areas of Internet commerce, bill payment and presentment, financial electronic data interchange, cross-border transactions, electronic checks, and electronic benefits transfer. Visit NACHA on the Internet at http://www.nacha.org.

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