---
title: "Check Fraud and Check Washing: How Small Businesses Stop It"
description: "How stolen business checks are washed, altered or copied, what FinCEN found in over 15,000 mail-theft check fraud reports, and the controls that stop it: Positive Pay, fewer paper checks, secure mailing and fast reconciliation."
url: https://payeeguard.pages.dev/check-fraud-small-business
---

Payment fraud · checked 29 October 2026

# Check fraud and check washing: how to protect your business

Criminals steal checks from the mail, wash off the payee and amount, and deposit them, or use them as templates for counterfeits. FinCEN says check fraud reports nearly doubled in 2022. The fixes are cheap: pay fewer vendors by paper check and turn on Positive Pay.

## What FinCEN found

- FinCEN warned banks about mail-theft check fraud in an alert in February 2023, after check fraud reports nearly doubled in 2022.
- Its later analysis of **15,417 reports** from 27 February to 31 August 2023 found stolen checks were ** altered and deposited (44%)**, ** used as templates for counterfeits (26%)** or ** signed and deposited by someone else (20%)**.
- Fraudsters often used mobile or ATM deposits to avoid bank staff.

## Controls that work

- **Positive Pay:** you send your bank the checks you issued; anything that doesn't match is held for you to approve. Payee Positive Pay also checks the payee name. [Positive Pay explained](https://payeeguard.pages.dev/positive-pay-small-business).
- **Move regular vendors to ACH**, and verify their bank details by phone first. [How to verify vendor bank details](https://payeeguard.pages.dev/vendor-bank-account-verification).
- **Mail checks inside the post office**, not from a blue box or your mailbox overnight.
- **Use gel ink pens** that resist washing, and write the payee and amount in full.
- **Reconcile daily or weekly.** Banks set short windows to report a bad check, and the faster you spot it, the better your chance of getting the money back.

## If a check was stolen or altered

- Call your bank now: stop payment and report the altered or counterfeit item.
- Report mail theft to the US Postal Inspection Service.
- Tell the intended payee and pay them by a safer method.
- Close the account if counterfeits are using your account number.

Sources: FinCEN check fraud alert (February 2023) as summarised by Ballard Spahr's Consumer Finance Monitor; FinCEN Financial Trend Analysis on mail theft-related check fraud (September 2024) as summarised in JD Supra. Read 29 October 2026. General guidance.

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