In a recent interview, Phi Dang, a Chinese American businesswoman from Southern California, shared her harrowing experience with check fraud that underscores the rise of emerging scams. Dang discovered that a check she had sent was ingeniously altered after it had been mailed. The thief not only intercepted the check but also manipulated its details, resulting in a staggering loss of over $10,000 because she failed to report the incident within her bank’s required timeframe.
Dang runs a family-owned small business supplying small appliances to various retailers. She became alarmed when a supplier reached out regarding an unpaid invoice. Although she had issued a $14,000 check for the payment, which was already deducted from her account, she later realized that the name on the check had been tampered with.
“I suspect the thief stole the check from the mail, used chemicals to change the payee’s name, and then cashed the altered check at the bank,” she explained. “I was extremely anxious because that’s a significant amount of money.” Determined to resolve the situation, she contacted Wells Fargo, her bank, to report the fraud. Unfortunately, she learned that since she hadn’t reported it within 30 days, she couldn’t recover any of her lost funds. While the bank expressed sympathy for her predicament, they reiterated that all customers must “promptly report suspected fraudulent transactions.”
Celine, another resident from Southern California, recounted a similar ordeal. She mailed a check worth several thousand dollars, only to have it stolen and altered by criminals, resulting in a loss of $16,000 from her account.
The U.S. Treasury Department has reported a staggering 365% increase in check fraud since the pandemic began, with banks often falling short in offering effective solutions to victims.
Carola Sanchez-Adams, a senior attorney at the National Consumer Law Center, highlighted a prevalent issue: many victims only realize they’ve fallen prey to check fraud when it’s too late. She noted that, under the Uniform Commercial Code (UCC), victims are supposed to notify their banks within one year of the fraud. However, many banks have shortened this period to just 30 days in their account agreements.
To mitigate the risk of check fraud, experts advise taking several precautions: personally delivering checks whenever possible, regularly reviewing bank account transactions, and verifying the images of cashed checks to ensure that neither the payee’s name nor the amount has been altered.
