Houston Woman Loses $24K In New 'Check Cooking' Scam — How One Check Can Lead To Multiple Withdrawals

A Houston woman lost $24,000 to check washing, which is a technique used by fraudsters where they use chemicals like nail polish remover or bleach to remove the payee's name or amount from a stolen check to replace it with their own.

Jamie Forward had dropped a check into a US Postal Service collection box. However, the payment, which was meant for a retirement account, never reached its destination but was deposited into someone else's account.

While younger generations don't view checks as their primary payment option, nearly 50% of consumers still used checks in 2024, according to the US Federal Reserve.

Check usage has largely remained unchanged in recent years, but financial scams related to checks are on the rise. According to a CNN report, check fraud increased nationwide by an astronomical 385% since the pandemic, according to the US Treasury Department.

What Is 'Check Cooking?'

Now, fraudsters have devised a new technique called 'check cooking' to make multiple withdrawals from your accounts after getting access to your banking information or checks. Threat actors use the banking information to create multiple check copies that they can cash.

The main difference between check washing and check cooking is that the former is a physical process while the latter is completely digital. But how risky is check cooking really? Note that fraudsters only need a photo of your check to drain your bank accounts.

Georgia State University's David Maimon recently told a media outlet that criminals are increasingly using check cooking techniques to steal money. 'Cooking checks is essentially the criminal taking the original check, scanning the signatures, taking all the information, then using software to edit and print new checks,' Maimon explained.

The top way check cookers get information about victims is mail theft. Thieves can steal checks when you put a check in your mailbox and make copies before the check reaches its destination. A digital copy enables them to sell it to other fraudsters who make further copies in return.

How to Protect Your Money From 'Check Cooking'

In 2021, the Financial Crimes Enforcement Network received more than 350,000 suspicious activity reports about potential check fraud. Next year, the figure increased to over 680,000 in tandem with rising check-cooking fraud across the nation.

You could avoid falling victim to check cooking by using electronic forms of payments, especially when you have to send a check through mail.

However, if you have to mail a physical check anyway, you can drop it as close as possible to when the mailperson will be picking it to lower the time a fraudster has to steal and make copies of it.

Business owners using checks can ask banks if they provide positive pay services. If you opt in, the bank will compare any cashed checks with authorised checks you provide and alert you in case of any discrepancies.

Always be careful with your bank details all the same and shred any documents that contain banking information. Overall, frequently monitoring your account for unauthorized transactions is essential because you typically have 30 days to report potential fraud to your bank.