Local Banks Warn Against Using Paper Checks

West Allis – Banks in the area are advising customers to eliminate the use of paper checks altogether. They caution that sticking with checks could result in significant financial losses, given the increase in sophisticated fraud schemes targeting standard banking practices.

During a recent community event in West Allis, representatives from Equitable Bank expressed their concerns on TMJ4. Although check fraud has been an issue for some time, the surge in online banking has turned checks into a major security vulnerability.

Lisa Jonas, Vice President of Banking Business at Fuhei Bank, discussed how criminals exploit weaknesses in check management through a method referred to as “check washing.”

“What they do is wash the check, removing the name of the payee and inserting their own,” Jonas explained. “Once that’s done, they can easily make a mobile deposit. The check goes unnoticed, raising no red flags.” She emphasized that people might think their payments are secure when, in reality, the funds could land in someone else’s hands.

The fraud scheme often involves thieves stealing checks from residential mailboxes or collection boxes, altering original details, and then successfully depositing the modified checks using mobile banking apps.

“I might write a check, and it clears my account for the correct amount. I think everything’s fine, but someone else has actually taken my money,” Jonas noted.

Beyond check washing, there are additional threats. Criminals can create and print counterfeit checks using routing and account numbers from legitimate checks, giving them easy access to sensitive financial information.

To protect their customers, banks are strongly advocating for a shift to electronic payments. As reports of check fraud are on the rise nationally, many financial institutions are pushing clients to adopt digital payment methods for day-to-day transactions.