Severian, you can relax about that direct deposit business. Direct Deposit is just that - the ability to directly deposit funds into your account. You don’t have to grant anyone permission to do it, and someone who has the ability to do it has no ability beyond that point - they can’t take funds out, they can’t “take back” any funds they’ve previously deposited, they can’t find out how much money is in the account.
In fact, here’s the text on the form for my bank. You may want to type this up as a letter and take it or fax it to your bank immediately.
REQUEST TO BLOCK ACH ACTIVITY
<Your Name and Address>
I wish to block the following unauthorized ACH activity to my account. I will imdemnify you for any liability you incur acting on my request.
An unauthorized debit is an electronic funds transfer from your bank account initiated by an entity that was not authorized by you in writing, a debit that is in an amount greater than that authorized by you, or one which results in a debit to your account earlier than you authorized.
Please provide:
- Account Number:_______ <enter Account Number>
- Corporate ID: _________ <leave blank>
- Debit: ______ or Credit: _______ <mark Debit>
- Standard Entry Type: _____________ <leave blank>
- Amount: ___________________ <enter “Any”>
- Sender’s ID: _______________ <leave blank>
- Sender’s Company Name: __________ <enter company name>
- Expiration Date: ___________ <enter “Does not expire”>
DECLARATION: I declare under penatly of perjury that the entry I want to block was never authrized.
Dated: _______________ <enter date>
Signature: ___________________ <sign>
Name: __________________ <enter name>
WillGolfForFood wrote
No. I’ll give you one example from my personal history:
An employee was bad and we had to let him go. He had been paid a week before which had been auto-deposited. When we let him go, we gave him his final paycheck which was also auto-deposited. A few days later, we discovered he’d been much much badder then we thought; he’d been stealing pretty heavily from us. I had the bank retract his last two auto-deposits. (I would’ve had them retract more if they could’ve but two weeks was as far as they could go. (I think; it could’ve been more or less.)
As it turned out, when we told the ex-employee he was about to be in big trouble with the law, he didn’t dispute the retraction of the paychecks and we both let it go at that.
There is a difference between retracting deposits and initiating a withdrawal. In order to have direct deposit, an employee only has to provide the bank account number, and authorize the employer to put money into his/her account.
In order to have money taken out of your account, you have to file a form authorizing the bank to allow money to be withdrawn by a specific individual/company.
An employer who has been authorized for direct deposit is not authorized to initiate withdrawals from your account.
ACH stands for Automated Clearing House, if anyone is interested. Here is some PDF information on the ACH network.