I am absolutely shocked that there are retailers on the Web that are allowed to directly charge your checking account. All they need is the account number and routing information. A friend showed me some porn site sign ups that will even set up recurring billing right off that checking account info. :eek:
It’s made me very afraid to even give anyone a personal check anymore. If I give my yard man a personal check how do I know he won’t sign up to a porn site or shop at an online merchant with my checking info? Everything he needs is in his hands.
When did Congress destroy all check protections? There was a time a check required a piece of paper and a signature. Merchants wanted two forms of ID. If you paid a bill through the mail then the paper with the signature gave the authorization for that one payment.
So what the heck happened? Are all protections gone from Checking these days? Yes, they can prosecute someone for check fraud. A lot of good that does short term when your checking account is emptied out.
My fear is the smart thief. That silently dips into your account every month for maybe $75. Ten months later they have siphoned off $750. How many people still reconcile their accounts monthly to the penny? How many people would notice $75 gone a month?
It’s funny that before the 1970’s checks weren’t as secure. I can just barely remember blank checks at the grocery stores. IIRC they had them for the local banks. We only had two banks in our small town. My aunt would get a blank check for her bank, fill out the account number, amount, and sign it. I’m pretty sure checks didn’t have routing numbers then. Account numbers were only a few digits to memorize.
That all disappeared by the time I got my first checking account in the sixth grade. By then merchants were asking for ID and banks wouldn’t cash a check unless you had an account with them.
I haven’t paid with an “electronic” check in a long time, but at least some places used to run a verification transaction where they would credit your account for a few cents, then you had to tell them the details of that verification transaction before they would process your payment using that account. This procedure served to prove that you had access to that account beyond just having the routing and account numbers.
Also, a lot of places that accept electronic checks use some sort of validation service that has info about you above and beyond what’s available on the check itself. If they ask you for D.O.B., DL#, or SSN etc., there’s a good chance they’re verifying at least some of that info with a central database to make sure that the numbers match what they have on record. They also flag accounts that have a history of bouncing checks or fraudulent activity.
I’ve had two places that charged thigs to my checking account and both times a single call to the bank took the charges away. Both were fraud attempts, and both from using my debit card at u-hauls.
I balance my account to the penny every month. If you don’t how do you know how much is in the account. I do make math and entry error sometimes but catch them within a month. It’s the only way to do it if you ask me. If someone was taking $75 out I’d catch it in one month. If you are willing to wait 10 months, more power to you. Just make it harder to balance the longer you go without it.
I can recall my parents warning me several times to keep my extra boxes of checks in a secure place. Mom always locked her extra boxes of checks in the filing cabinet.
There was a big concern that if someone got one of your books of checks that they’d forge your signature. Much simpler times back then. Who would have ever thought (twenty years later) just paying somebody with a check was giving them the acct and routing numbers they needed for fraud.
We had an incident at work where a security guard used his keys to get into the Comptroller’s office. He stole several blank checks. Thankfully our internal audit/security measures caught him before he ever wrote one of the checks. Our accounting staff caught the break in check sequence numbers. There’s a audit record of every check written. Back when we still printed checks in operations we’d occasionally ruin a couple getting the printer aligned. Those ruined checks had to be turned back in to the Comptroller’s office. We took the physical check very seriously, even if it was blank.
I’m glad to hear these places that take online checking require additional proof that you’re the account holder.
This is a different issue. If you paid using a debit card then you probably used a Visa branded debit card which works like a credit card but takes money directly from your checking account. The question is about account numbers and routing numbers, neither of which are available to anyone who is able to get your debit card number. (ETA: Otherwise you may have used your card as a debit card using the PIN, but then the fraudsters would not know your PIN. That’s why I assumed the other method.)
You don’t have to balance your checkbook to notice $75. Every week or so I take a look at my account online. For each charge I think, what is that for?
I don’t exactly balance an actual checkbook any more, but I do track my account online and track my purchases daily on scrap paper I keep on the fridge, next to the calendar I use to track the 10 electronic withdrawals for bills per month. I check my online information probably three times a week and verify the balance with my fridge record. I would notice a $75 discrepancy within a couple of days. Since the online account information also gives locations of transactions and/or merchant information, I would recognize a merchant I’ve never used online or been present for purchase.
Using this method, I have caught a couple of accidental overdraws due to mis-timing of electronic bill payments on my part, and was able to cover the difference before the bank had to ding me for NSF.
I do have, I think, three of those electronic payments go through the “electronic check” method rather than via a debit card charge. There were several steps - sorry I don’t remember what all they were as they were set up years ago - that made the process a little more complicated than just the account and routing numbers. So I would still feel fairly confident someone couldn’t take a check and start making online purchases with it without a bit of additional information.
I too worry about writing personal checks anymore, for exactly this reason. The only person I write checks for now is my landlord. Everything else is covered by something else. I’d rather pay for a money order or a cashier’s check than use personal checks for a small business (like a landscaping service or other house maintenance) that refused to take cash. Luckily, I don’t ever do business with places that don’t take credit cards, so I never have to use my personal checks.
The online check thing scares me, and they always have a box to check that says “I swear I am the account holder. Really! I promise!!!” Yeah… a lot of good that does I’m sure.
I’m relieved to hear that they may have access to some secret database that has my driver’s license and whatnot, although that in and of itself is scary. But I’ve paid for things where I did NOT have to enter anything other than the routing number and checking account.
Like I said, scary. Maybe I’m scared for no reason and there is more protection than I assume. I’d like it if these fears could be put to rest. Until then, I’ll continue to be over-cautious about personal checks.
Basically, you are not responsible for fraudulent EFT charges. They have 60 days to do an investigation during which they can hold $50 of the fraudulent charge. Usually they need you to go to the bank and sign an affidavit saying you didn’t authorize the charge.
I check my account daily. I would notice immediately if money were missing. Further, since I can move money around easily, I keep very little money in my checking account - only enough to cover checks that are out. (Which is why I like people to cash my checks quickly.) So it is very easy to spot when money I’m not expecting to go out, actually does.
The couple of times I used an e-check to make a purchase, the seller required that the shipping address match the address on record at my bank.
The only other e-check transactions I authorized on a regular basis were utility bills, where the creditor would obviously be submitting the service address to the bank at the time of debit.
Over the past six or eight years, I rarely ever handed anyone a paper check. That would make it hard for an unauthorized person to get hold of my account & routing info.
As I understand it - You bank with Bank A; they get a request from Bank B to withdraw money from your account and transfer it to Bank B, who puts it into an account in their bank.
If you contest the process, Bank A simply reverses the transaction with Bank B, who then has to get the moeny from their customer. So a bank that habitually lets a customer make fraudulent transfers is going to have an incentive to fix the problem very quickly, or get “frozen out” of the system. the only way Bank A loses is if Bank B goes belly up before they get their money back. Not sure what guarantees the banking system has in place for that, but I asume it’s not a daily occurence.
I assume that any bank of any repute is going to have some sort of criteria for allowing their customers to intiate transfers; like Visa Merchant status, there is probably some form of creditworthiness check, although I assume it could be fraudulently bypassed occasionally.
That raises followup questions for me regarding fraud and NSF
. If there’s a transfer request on your account for an amount of money that isn’t there, and that request is revealed to be fradulent I should hope that any NSF charge would be reversed.
What about if a fraudulent transfer pulls out enough money that a legitimate cheque is NSF? Would the NSF charges be reversed in this case? What would be the impact to the party that cashed the cheque - would you have to send them a new one for them to get their money?
Huh? I thought NSF applied to someone who puts through a cheque (deposit) and it bounces back to them. I write a check to Al’s Roofing and it bounces. Al get hit with an NSF charge. He will then (rightly) ask me to pay the original bill PLUS the NSF charge.
Obviously, I haven’t tried being on the other end. Do banks really hit you with an NSF charge when they refuse a cheque on your account? (I have $3000 overdraft protection, not that I’ve used it more than once or twice in 10 years, which was mainly due to paycheque timing.)
Often banks will try to smooth out problems for long-time customers; if a charge really should not have gone through, and it creates problems, they will settle the issue - probably because they know they will lose in court. They allowed an unauthorised charge through which resulted in extra costs for you, they’ll end up paying that charge anyway.
I wonder if banks have some sort of agreement among themselves to drop these charges when it happens?
I’m guessing that those protections are going away because they are pretty ineffective. All it takes to print real-looking checks is some special paper you can buy at any office supply store. Signatures don’t actually protect against anything because no one checks them (and even if they did, it’s not that hard to fake most signatures, either). On the other hand, an interconnected banking system with a sophisticated fraud detection department is a really good protection; you just don’t see it. I’ve had fraudulent transactions on my credit cards several times. Each time, the bank caught it before I did, called me, and had a new card in the mail the next day.
A bank account number was never intended to be kept secret. Trying to verify the transaction is much harder than looking for fraudulent patterns in the data and cutting them off. Electronic transfers make this easier not harder, because it’s easy to revoke someone’s electronic key, and very hard to figure out where someone’s making fake checks and try to stop them at all possible merchants that might accept checks.
I think you’re overestimating how much trouble this is. You don’t have to “balance your checkbook” to notice fraud. No “to the penny” math required. You just have to look at the transactions on the bank’s website and make sure that you actually made them.
And if this “smart thief” wants to make any real money, he’s going to have to go after lots of accounts at $75/month. Even if only a small fraction of people check for fraud, he’s going to get caught right quick.
Exactly. It’s not like office space where they silently take fractions of a penny and you balance goes down invisibly. There’s a line item for every transaction, so you just have to look for unknown charges. It really ought to take a minute or less a month.