Dec 11, 2024
When Todd Kahler was finally approved for Social Security disability benefits after being denied twice and appealing the decision, he was surprised and delighted. He'd have the money he needed to support himself since he can't work as a result of being severely immunocompromised.
Expecting $97,000 in back pay from the Social Security Administration, Kahler withdrew from state benefits to preserve future eligibility and waited. The check didn’t show up, and when he called the national Social Security office, he got some very troubling news.
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"The guy I spoke to was very nice, and he told me it had been cashed by somebody," Kahler told MarketWatch. "He told me who cashed it; at what bank it was cashed at. We talked for 40 minutes."
It's unclear exactly how his check ended up being stolen, but Kahler said he struggled to afford food and rent in the aftermath. After several months of advocating for himself in different ways, including calling government offices, filing complaints, speaking with the media and working with legal aid attorneys, the Social Security Administration eventually stepped in to return the funds.
Here's how common mail-theft related check fraud is and how you can protect yourself so this doesn't happen to you.
A growing problem
Unfortunately, many people whose checks are stolen and cashed may not be so lucky or persistent as Kahler, and in recent years the group of victims experiencing this financial crime has grown. According to the MarketWatch report, a Social Security agent told Kahler and his attorneys that thefts like these had been happening frequently.
“It’s definitely exploded,” said Carla Sanchez-Adams, a senior attorney at the National Consumer Law Center to MarketWatch “It’s something that people are often surprised by, because they’re like, who still pays by check?”
Last year, the federal government released an alert on a “nationwide surge” in check fraud schemes targeting the U.S. Mail and gathered data from banks for its own analysis. Over a six-month period from February to August of 2023, the Financial Crimes Enforcement Network (FinCEN) received 15,417 reports of mail theft-related check fraud from 841 financial institutions, amounting to more than $688 million in transactions.
After these checks were stolen from the U.S. Mail, 44% were altered and deposited, 26% were used as templates to create counterfeit checks, and 20% were fraudulently signed and deposited.
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How do checks get stolen?
With so many checks falling into the wrong hands, the big question is how this happens. The problem is that there are a number of different methods scammers use, which can make it hard to put an end to the criminal behavior.
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In some cases, postal workers are the culprits, including in one scheme where two former mail workers teamed up to steal more than $4 million in checks that had been issued by the U.S. Treasury Department.
In other situations, criminals may rob mail workers to steal their keys that open collection boxes or postal workers may sell these keys on the black market.
How to protect yourself against check fraud
Check fraud can be hard to fight against since it happens before a check comes to you or after it has left your hands.
One of the best solutions is to reduce the number of checks you're involved with. If you don't send checks and don't receive them, criminals can't intercept them. So, sign up for direct deposit from Social Security, the IRS, your employer, and anyone else who offers the service, and pay as many of your bills electronically as you can.
If you're writing a check, using a black gel pen can make it more difficult to alter and if you're mailing one, use a secure box like those inside of the post office instead of just dropping it in a box outside. If a check you wrote goes missing, you should contact your bank to cancel it. If you notice it has been cashed, report it to your bank and the police immediately.
If you're expecting payment via check, you should also keep careful tabs on when it's supposed to arrive and alert the sender immediately if it's delayed. This could help them to stop payment quickly if there's a suspicion the check has fallen into the wrong hands.
Following these steps can hopefully help you to avoid becoming a victim of this growing crime trend. If you do become a victim, getting aggressive to fight back like Kahler did may be your best and only option to recover your funds that have been wrongfully taken from you.
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Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.
