CLEVELAND — It was just a few days before Christmas 2021 when she dropped a check in the mail — $28 for a magazine subscription.
“I went through the drive-thru drop box at the South Euclid post office, dropped it in, didn’t think anything of it,” she said.
But a few days later, her bank account showed it was cashed for $7,000 to a person she didn’t know.
“They didn’t even change the memo line,” she said.
“Oh, so a $7,000 magazine subscription?” Reporter Homa Bash asked.
“That’s what everybody said. For a one-year subscription, that’s a lot of money.”
We are keeping her identity hidden since she’s already been victimized once.
This woman isn’t alone.
She’s one of dozens and dozens who have fallen victim to "blue box" thefts — checks taken out of USPS boxes right in front of post offices, altered, and cashed, draining bank accounts.
The photocopy she shared of her check looks so obviously fake, a human bank teller would’ve been able to spot the fraud, however, police reports reveal these checks are cashed through mobile check deposit.
According to Federal Reserve data, more than half of Americans use mobile banking on their phones.
“So the problem is not so much with the mobile technology but the validation process the bank employs,” explained Shankar Ramachandran, banking and finance expert and assistant professor at Case Western Reserve University.
Ramachandran says for banks, it is about cost versus convenience because defrauded customers are required to get their money back.
“The law dictates if a customer did not authorize a particular transition, then the bank needs to make it good so that’s why it’s a bit of a loss, but I think on the trade-off side, banks come off better with the mobile technology,” he said.
A couple of weeks ago, we told you about nearly 50 victims of blue box thefts from North Royalton.
Parma Police tell us they’ve had more than 60 people hit with $430,000 in losses from December 2021 to as recently as August 17.
It started at the State Road post office, but now the post office on Day Drive is being targeted.
Reports reveal one woman wrote a $437 for her business, and through this scheme of changed checks, was defrauded for more than $23,000.
Again, the law says you must get your money back, but it doesn’t stipulate when.
The woman we spoke with in University Heights said she did get her $7,000 back, but it took more than two months and reports were filed with both the bank and the police.
“So they had to go through their whole investigation and the bank and to get their money back from the bank where the check was cashed before I would get my money back,” she said. She eventually received a letter from the Department of Justice earlier this year stating that the people involved in her check fraud were caught, but as News 5 has been reporting, the thefts have continued.
Since then, the woman said her habits have changed and she has advice that may help others.
First and foremost, she walks every check into the post office and directly into a person’s hands, even though it's less convenient.
She also takes photos of every check she writes to have her own record.
Lastly, she set up alerts on all her accounts to be notified of any fraud as soon as it happens.
News 5 reached out to dozens of major banks to see if any would sit down for an interview to discuss issues with mobile banking technology and any safeguards in place, but every single one refused an interview.
KeyBank shared the following advice via email:
Check fraud can cause a serious burden to the accountholder including loss of funds, incurring overdraft fees, and a significant time commitment to fix those issues.
To help protect yourself against check fraud:
- Utilize your bank’s online bill pay feature to send payments to merchants or individuals.
- When mailing checks is necessary, go inside a Post Office. Avoid using standalone U.S. Post Office blue boxes whenever possible as the risk of check fraud with the use of blue boxes is greatly increased.
- Do not include unnecessary information on checks, such as your driver’s license number or telephone numbers.
- Avoid leaving large blank spaces in the number or amount on lines on checks.
- Use the entire name of the company when writing or printing checks. For example, if the payee is the Internal Revenue Service, don't abbreviate “IRS.”
- Indicate the amount of the check with both numbers and words, and spell out the amount completely. For example, on a check for $2,255.00, write out "Two thousand two hundred fifty-five dollars and 00/100." This makes it harder for fraudsters to tamper with the amount.
- Store your checkbook and checks in a safe, secure place.
- Shred old checks, ATM receipts, and statements before discarding them.
- Do not sign blank checks or endorse payments until the time of deposit.
- Always be diligent about monitoring your accounts for unauthorized transactions and immediately report any suspected fraud to your financial institution.
The following is a statement and advice from the American Bankers Association:
“Banks make extraordinary efforts to safeguard customer accounts and prevent about 90% of deposit account fraud attempts each year. We’ve recently seen criminals gravitate back toward check fraud, but fortunately, banks are well-equipped to catch it thanks to sophisticated fraud prevention systems and constant vigilance by dedicated employees. It’s important to remember that bank customers are generally protected against losses due to unauthorized transactions if they are reported in a timely fashion. They should monitor their accounts regularly and report any suspected fraud immediately.”
ABA tips for consumers:
- Report any suspected fraud to your bank immediately.
- Use online banking to protect yourself. Monitor your financial accounts regularly for fraudulent transactions. Sign up for text or email alerts from your bank for certain types of transactions, such as online purchases or transactions of more than $500.
- Consider making and receiving payments electronically through online bill-pay, debit or credit card, or other electronic options.
- Beware of phishing scams. Never give out personal financial information in an email or over the phone unless you have initiated the contact.
