Thousands of bank accounts stolen with an old-fashioned scam

‘Jordan Critchlow’, the feds are looking for you. And you, ‘Karen Woodson’.

Are those their names? These are the ones they used when they cheated my bank and took my money: $5,620.

Scholars of fraud tell me the dark art used against me is called “check laundering,” the latest old-school crime that has unexpectedly resurfaced, like carjacking or in-person identity theft, at least. partly due to modern digital anti-fraud technology.

It took us a month to recover the money from our cheated bank, WSFS. It would have been a tough month if, like so many Americans, we were living paycheck to paycheck in these times of high inflation.

Federal agents suspect that our monthly Delmarva Power check may have been among the items stolen from the blue mailboxes at the Talleyville, Delaware Post Office, which fronts busy US Route 202. “You have been identified as a possible victim,” the head of a cross-functional team of Philadelphia-based postal inspectors wrote to me in a letter that arrived on June 13, detailing the brazen theft.

According to the United States Postal Inspection Service (USPIS) and industry groups, this type of old-fashioned check fraud is becoming more prevalent, which researchers ironically attribute to digital anti-fraud technology, which is also one of the causes of our current car theft epidemic.

Does this sound like a throwback? To be sure, the high-tech security adopted by large payment systems can deter thieves, making money more difficult to steal.

But it does not reform thieves, but rather pushes them to resort to new methods, or, in this case, to forms of stealing that predate computers, since the Post Office has not made it difficult to steal from mailboxes.

For example, “If key fobs (with security computer chips) make it harder to steal a car, the way to steal key fobs is to put a gun in someone’s face,” said Post Office Inspector George P. Clark.

The same goes for bank check fraud. If chip cards make it harder to read stolen credit card account numbers, thieves will return to the more primitive tactics of “stealing a check from the postal flow,” Clark said. Philadelphians reported a spate of check thefts at mailboxes last winter.

I’m pleased to say that ‘Jordan’ and ‘Karen’ did no worse damage thanks to my watchful wife, who has worked too long as a banker—most recently as a preschool teacher and caring mother of our six children—to trust the banking system without checking our transactions every day. On May 12, she became aware of the false withdrawals.

We called WSFS and asked them to close the account and open a new one. (This is the second time in a year: Branch workers alerted a Pennsylvania man posing as me at a Chester County WSFS branch last fall. Arrested by East Whiteland police, jumped bail , and has since been arrested again on charges of attempted identity theft and forgery).

How did these last thieves get it? They had a copy of my check, with the correct account number.

They stole my name and address and added other personal data, which is called “check washing,” because of the way thieves sometimes use a careful selection of ink solvents to erase inconvenient data.

This is ancient technology, described in detail in Frank Abagnale’s popular 1980 book “Catch Me If You Can” and made into a hilarious Leonardo DiCaprio movie in 2002.

Consumers reported $2.3 billion in scams last year from imposters — people pretending to be them. That loss was nearly double the $1.2 billion lost a year earlier, according to the Federal Trade Commission (FTC). Global losses from consumer fraud rose 70 percent in 2021, to $5.8 billion. The typical check scam cost consumers nearly $2,000, more than other common scams. People in their 20s are more than twice as likely to be scammed as other Americans.

Total bank fraud hit a record 43,000 in the first quarter, while credit card fraud jumped to a record 118,000, according to the FTC. Delaware, a banking center, and neighboring Maryland are two of the top three states for bank fraud per capita, with more than 500 reports per million residents in both states so far this year, according to the FTC.

“Fraud schemes have certainly been on the rise,” said Christine Davis, chief risk officer at WSFS, the largest bank based in the Philadelphia area. “We’ve had, she would say, a triple increase in check laundering in the last few years.”

When we reported the thefts from our account—before we heard from postal inspectors—Davis’s colleagues asked if we had lost any checks in the weeks before the fraud. I told them that our April payment to Delmarva Power had not been collected. We surmised that perhaps it had strayed into his system; my wife had made a replacement payment electronically and she thought no more of it.

When this happens, “tell the bank,” Davis said. It will alert them to be more attentive to your account.

I hope you guys are careful anyway. ‘Jordan’ and ‘Karen’ were careful: They wrote their six checks for different amounts, from $375 to $1,800, and apparently deposited them into unstaffed ATMs, where they were promptly honored through the convenient electronic process that allows banks move your money without paying branch staff.

Davis apologized for taking a month to return my money after the bank’s mistakes. Sometimes it takes longer. “We have to work with another institution,” he said.

Bankers are careful not to tell people to stop using checks. But “my guess is that (people’s) utility check was intercepted and duplicated,” said Michael Lawson, the retired Wilmington city police detective turned Artisans’ Bank official who chairs the Delaware Association for Bank Securities (DABS).

“The best option to never be a victim of check fraud again is to stop writing checks and pay all bills electronically,” Lawson said.

Indeed, more and more people are paying electronically. But technology also helps thieves. “Now there are a lot more messages on social media about how to do these things,” said Clark, the postal inspector. “They tell you how to get checks: Check your grandparents’ cupboards for old checkbooks, or steal them through the mail. They show you what’s branded (and what looks authentic). They tell you what chemicals to use to change the details.”

Are banks urging Facebook or TikTok to withdraw these handy guidelines, like they do with child porn or bomb making?

“The flow of information seems unstoppable,” Clark said. “Get rid of one, but there are a billion more.”

ATM deposits are a convenience for people who are forced to handle cash and checks at odd hours. But, by removing human personnel, the process invites more thieves: “It’s intimidating to go commit a crime when you have to deal with a person in front of you,” Clark said. But by committing the fraud remotely, via smartphone banking, “you don’t feel like you’re dealing with anyone.”

In short, digital technology “deters some types of theft and makes other theft easier,” Clark said.

Unfortunately, the digital age hasn’t made people more honest.

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