Every time you mail a paper check, you’re effectively sending your account and routing numbers out into the world. Unfortunately, check fraud remains one of the most common and insidious threats to businesses of all sizes. Here’s what you need to know and how to guard against it.

Check Washing

Check washing occurs when fraudsters steal mailed checks—often from unlocked mailboxes and use chemicals to erase the payee information. Once the original name is removed, they can rewrite the check to themselves or an accomplice, then cash or deposit it.

• Why it Works: There’s no protection around paper checks once they leave your hands. If your reconciliation process only verifies check numbers and amounts, you may not notice a washed check until your vendor complains of a missing payment.

Fraudulently Created Checks & Unauthorized ACH Transactions

In some cases, fraudsters don’t bother with physical checks at all. They’ll simply photograph a genuine check, order blank check stock online, and print counterfeit checks using your routing and account numbers. Others log into your online banking (using stolen credentials) to set up fraudulent ACH debits or transfers.

• Why it Works: Every check you issue exposes your account details, giving criminals what they need to fabricate transactions. Without real-time validation of payee names or transaction sources, these fraudulent items can clear before anyone notices.

Protect Your Business

• Dual Control: Require two people to initiate and approve every payment—whether check, ACH, or wire.
• Separation of Duties: No single employee should control end-to-end payment processes. Divide responsibilities among multiple staff members.
• Fraud Insurance: Review your policy limits and deductibles with your insurance agent to confirm adequate coverage.
• Access Management: Limit online-banking permissions to only those who truly need them and assign each person a unique login rather than shared credentials to maintain a clear audit trail. Immediately revoke access when an employee leaves or changes roles.
• Automated Alerts: Most online-banking platforms allow you to set up free email or text alerts for check clears, ACH debits, large-dollar transactions, and login attempts. Turn these on.
• Employee Education: Conduct regular training on spotting fraud schemes and following escalation protocols.
• Technology Hygiene: Keep antivirus, anti-malware, and firewall software up to date, and consider housing banking access on a dedicated workstation.
• Enroll in Positive Pay: This service cross-references every check and ACH debit against your authorized list (including payee name, check number, amount, and date) and flags any discrepancies for your review. You can then reject unauthorized items before funds leave your account.

By combining advanced banking controls (like Positive Pay) with strong internal processes and ongoing staff education, you can greatly reduce your check‐fraud risk, and partnering with a trusted financial institution that can help you safeguard your finances is key. CCFBank offers tailored solutions, expert guidance, and the support you need to protect your assets. Find your banker and ask them for more information on our Treasury Management services.