SCAMS: Check Washing & Gas Pump Card Skimmers

Steve, an entrepreneur, has businesses in different states and pays his federal taxes on a quarterly basis.

In early January 2024, Steve’s wife wrote a $310,000 check to the IRS from their personal Wells Fargo account, he said in an interview with Fortune. She mailed the check from a secure mailbox inside a Seattle-area post office. A Wells Fargo bank statement showed that the check cleared on Jan. 31, 2024.

Months later, Steve’s accountant contacted him, and he discovered that the IRS never received his check. A short time later, the IRS asked Steve to provide a front and back copy of the $310,000 check. After his wife obtained it from a local Wells Fargo branch, Steve saw that someone had chemically washed the check and replaced the name “IRS” with a random name, “Ezavier Josiah Staples.”

Despite his check-washing problem, Steve still had to pay taxes, including penalties and interest, while dealing with his bank to recover his stolen money.

While check washing fraud has been around for decades, the number of check fraud cases has nearly doubled since 2021, according to the FBI’s Internet Crime Complaint Center. Inspectors at the U.S. Postal Inspection Service (USPIS) expect this fraud to worsen throughout the rest of 2025.

In check washing scams, fraudsters steal checks — often from mailboxes — and use household chemicals, such as nail polish remover or rubbing alcohol, to erase the payee’s name and amount. The criminals rewrite the check, usually for a larger amount, and cash the check.

The criminals don’t always cash the check themselves at a local bank. Sometimes criminal organizations sell washed checks on digital platforms and recruit “money mules” (people who move illegally obtained money for others) to deposit the falsified checks into fraudulent accounts, according to NASDAQ Verafin. And that’s not all. The stolen checks are also traded on dark web marketplaces in exchange for cryptocurrency.

Getting Your Money Back Isn’t Always Easy

While criminals commit their crimes relatively quickly, some victims say it takes a long time to get their money back from their banks and the banks that cashed the fraudulent checks.

New York residents Carol Perlman and Matt Schick were both victims of check washing fraud. Perlman wrote a $656 check to pay a bill and mailed it from within her building. By the time it was cashed, it was made out to a stranger for $9,000, according to a report on ABC7, NY.

The news station also reported that Matt Schick, a freelance TV producer, wrote a check to one of his contractors and deposited it in a street mailbox. Within days, someone had stolen the check and cashed it for $7,500.

Both Perlman and Schick told ABC7, NY, that they had trouble getting their banks to refund their money. Perlman and Schick said their banks only returned their money after the news station covered their story.

Steve reported the check fraud to the Seattle police, and he’s still working with Wells Fargo to recover his money. “I’m just shocked that [banks] don’t have insurance for this kind of thing, or with all the fraud stuff they’re doing, that they don’t care about protecting the consumer,” Steve told Fortune.

Safeguard Yourself From Check-Washing Schemes

Security experts recommend taking immediate action once you discover you’ve been a victim of check-washing fraud. Contact your bank, local police, and the USPIS immediately. Under the Uniform Commercial Code, which governs banks, customers have one year from the day they learned of the fraud to report it to their banks.

Security experts also offer steps that you can take to protect yourself—and your checks—from falling into the hands of criminals:

1. Do not use outdoor mailboxes to mail important documents.
2. Go digital. Rather than sending paper checks through the mail, use digital payment options such as mobile apps or bank bill-pay systems.
3. Don’t let your mail accumulate. Check your mail regularly. If you will be away from home for an extended period, have the post office hold your mail and packages.

4. Check your bank accounts regularly and enable transaction alerts to detect fraud early.

While some may contend that paper checks are outdated and should be phased out, they remain a prime target for fraudsters. Check washing schemes are still very prevalent, according to Christopher Caffarone, a partner in the Pillsbury Winthrop Shaw Pittman law firm’s corporate investigations and white-collar defense practice.

“Members of the public should be vigilant about reviewing financial accounts,” Caffarone told Fortune. “If they see anything suspicious, they should report it to the financial institution and to the police.”

Digital Wallets May Save You From Gas Pump Skimmers

Fraudsters are all around, even at gas stations. Who would think that using a debit or credit card to pay for gas could put you at risk of scammers?

Criminals hide small devices called “gas pump skimmers” inside or on top of a card reader on a fuel pump. When you insert your debit or credit card into the pump’s card reader, the skimmer copies the data stored on your card’s magnetic stripe. In some cases, fraudsters install a pinhole camera or a fake keypad to record your PIN. This gives them all they need to empty your bank account.

It’s not easy to spot a skimmer because it’s made to look like a legitimate part of the pump. However, if you have an iPhone, Apple provides a feature to help you prevent scammers from stealing your funds.

With Apple Pay, you can tap your device to pay at the pump without inserting your card. Unlike swiping a card, which transmits your real card number, Apple Pay creates a unique, encrypted token for every transaction that cannot be cloned, copied, or reused. So, if scammers try to intercept the data, it would be useless to them.

On Android phones, Google Wallet and Samsung Pay also use tokenization to store your payment information securely.

Tips to Protect Yourself From Gas Pump Card Skimmers

Some gas pumps have contactless readers, which helps to eliminate the fear of being scammed. However, not all gas stations have upgraded devices. So, to protect yourself from fraudsters:

1. Use your credit card at the gas pump rather than your debit card. Credit cards provide better fraud protection and don’t require a PIN.
2. If you use your debit card, run it as “credit” instead of “debit.” In this way, you don’t have to type in your PIN, which a fake keypad or camera could capture. Also, credit card networks offer stronger fraud protection.
3. Use the gas pumps closest to the store. Fraudsters often install fake devices farther away from the cashier’s line of sight.
4. Set up alerts for unusual charges on your credit card or debit card so that you can act quickly if your data is compromised.

Source Links:
https://finance.yahoo.com/news/check-washing-costs-americans-over-210000527.html
https://fortune.com/article/check-fraud-jpmorgan-chase-wells-fargo-check-washing-internal-revenue-service-wells-fargo/
https://www.bgr.com/1962054/how-iphone-apple-pay-protects-against-gas-pump-card-skimmers/