Behind the Screens. Exploring Check Fraud in the Shadows of the Dark Web

Over the years the number of checks written has decreased, however, check fraud remains a persistent issue.  Criminals engage in various forms of check fraud, including forged signatures, altered checks, account takeover, stolen checks, etc., however, fraudsters have taken a different approach to fraud with a technique that has become popular again known as check washing.   Check washing is a form of check fraud where a criminal alters a check to remove or modify the ink used on it, such as the check amount, name of payee, etc.  Check washing can be conducted by using a simple chemical like fingernail polish remover to erase the information giving them the ability to fill in the desired information.   

The first step in check fraud is to obtain a check. That can be accomplished using a variety of methods such as: 

Social Engineering – Scammers can manipulate individuals into providing checks or check information through deception.  Scammers may call an individual posing as a health insurance provider asking for their checking account information such as routing and account numbers. 

Stolen Checks – Fraudsters may steal checks from unsecured mailboxes. 

Burglary – Criminals may break into homes, vehicles or businesses to steal checkbooks. 

Insider Threats – An employee with access to checks or mail may misuse them for personal gain.  We have seen this activity in postal workers obtaining checks that are being mailed and selling them on the dark web. 

Lost or Misplaced Checks – Fraudsters may find lost or misplaced checks and use them for transactions.  An individual may place a checkbook in the trashcan which is an open opportunity for someone to go dumpster diving.   

Online Marketplaces – Some dark web platforms sell stolen or counterfeit checks. 

Fraudsters may sell checks through various methods, one being dark web. The dark web is part of the internet that cannot be accessed through a standard search engines like Chrome orFirefox.  Accessing the dark web requires the use of an anonymizing browser called Tor. The Tor browser routes your requests through a series of proxy servers that are operated by thousands of people across the world rendering your IP address unidentifiable and untraceable.  Traditional websites use a naming structure ending in .com or .co, but on the dark web websites end with .onion.  Websites use a scrambled naming structure that create URLs that are difficult to remember.  For example, a website address might be “uiwyuy6734chje1569ui.onion. 

.  Personal checks may be sold for a set price of around $120-$150 per check.  However, a business check may bring as much as $250 per check.  If you purchase 100 or more checks then the price may drop to a low price of $80 per check.   

Items for sale on the dark web marketplaces may be purchased in exchange for cryptocurrency. Utilizing cryptocurrency allows two parties to conduct a transaction without the identity of either party being identifiable.  Cryptocurrency is a contributing factor in the growth of the dark web and the dark web is a contributing factor to the growth of cryptocurrency. 

With the increase of check fraud, individuals need to implement precautions to keep their checking account information secure.   

Tips to avoid check fraud: 

• Mail checks at the post office instead of using stand-alone boxes or your mailbox at your house.  Mailing checks from your home mailbox with the flag up is an open invitation for a fraudster. 
• When writing a check, use a black gel pen with indelible ink. That ink seeps into the check’s fibers making check washing more difficult. 
• When you write a check, routinely check your bank account until the check clears to confirm that the check was cashed for the correct amount and the endorsement was the name of the payee. 
• Never leave your mail overnight in your mailbox outside your home.  If possible, check your mailbox frequently so you can retrieve the mail as soon as possible. 
• When going on vacation, have the post office hold your mail at the post office until you return. 

• When using an outgoing mail drop box, take it later in the day so the mail will be picked up in a short amount of time. 
• Keep your checkbook in a secure place.  Never leave a checkbook in your vehicle unattended.   
• Be cautious about sharing personal and financial information. 
• Shred old checks and checking account statements. 
• Report lost or stolen checks immediately to your financial institution and law enforcement. 
• Make sure to reconcile your account regularly and report any discrepancies to your financial institution. 
• Stay informed about the latest check fraud scams to better prepare yourself. 

Take a stand against check fraud by implementing precautions to keep your information secure so that you are not the next check fraud victim.