Experts Warn Mailed Checks Spur Fraud After Retiree Loses Thousands

Q: Your check is stolen and cashed. Which bank is legally required to cover your loss?

Usually, your own bank — the drawee or payor bank, the one that holds your account — must recredit you if it paid a stolen check that was not “properly payable,” such as one with a forged endorsement or fraudulent alteration. Under the Uniform Commercial Code, a bank generally cannot charge a customer’s account for a check that was altered or endorsed fraudulently. That means the account holder’s legal claim is typically against their own bank, not directly against the bank that cashed or accepted the check from the thief. After reimbursing its customer, the payor bank may then try to recover the money from the depositary bank — the bank that took the check from the fraudster — through warranty claims between banks. In practice, liability can become more complicated if the check was chemically washed, the amount was changed, or the customer delayed reporting the fraud. Banks may argue over whether the item showed obvious signs of alteration or whether the customer failed to review statements promptly. That is why experts stress checking account activity quickly and reporting suspicious checks immediately. So for a consumer, the key point is this: your bank is usually the one legally required to make you whole, assuming you notify it in time and it has no valid defense. The bank that accepted the stolen check may ultimately bear the loss, but that fight is usually between the banks, not the customer.

1 articles · Updated · The New York Times · Jun 26

Joan K. Atchinson, 63, said a check she mailed last year was intercepted, altered and cashed, leaving her out several thousand dollars with no reimbursement yet from Charles Schwab or Chase.
More than a fifth of adults either have experienced check fraud or know someone who has, according to a 2025 poll by the Independent Community Bankers of America, underscoring why consumer experts say mailing checks has become increasingly risky.
Adam Rust of the Consumer Federation of America said thieves steal checks from mailboxes and drop boxes, sometimes using sticky tools to 'fish' out letters or taking large batches to copy and sell online.
Those stolen checks are often 'washed' with chemicals to erase the payee, then rewritten to a fraudulent recipient and frequently for a larger amount, making prompt account monitoring critical if checks must still be mailed.