March 28, 2024
BANGOR DAILY NEWS (BANGOR, MAINE

Protect checking accounts

Fraudulent telemarketers have found yet another way to steal your money, this time from your checking account. Consumers across the country are complaining about unauthorized debits (withdrawals) from their checking accounts.

Automatic debiting of your checking account can be a legitimate payment method; many people pay mortgages or make car payments this way. But the system is being abused by fraudulent telemarketers. Therefore, if a caller asks for your checking account number, or other information printed on your check, you should follow the same warning that applies to your credit card number.

Do not give out checking account information over the phone unless you are familiar with the company and agree to pay for something. Remember, if you give your checking account number over the phone to a stranger for “verification” or “computer purposes,” that person could use it to improperly take money from your checking account.

The scams work like this. You either get a postcard or a telephone call saying you have won a free prize, or can qualify for a major credit card, regardless of past credit problems. If you respond to the offer, the telemarketer then goes on to explain the offer. Often it sounds too good to pass up.

Near the end of the sales pitch, the telemarketer may ask you to get one of your checks and to read off all of the numbers at the bottom. Some deceptive telemarketers may not tell you why this information is needed. Other deceptive telemarketers may tell you the account information will help ensure that you qualify for the offer. And, in some cases, the legitimate telemarketer will honestly explain that his information will allow them to debit your checking account.

Once a telemarketer has your checking account information, it is put on a “demand draft,” which is processed much like a check. The draft has your name, account number, and states an amount. Unlike a check, however, the draft does not require your signature. When your bank receives the draft, it take the amount on the draft from your checking account and pays the telemarketer’s bank. You may not know that your bank has paid the draft until you receive your bank statement.

Protect yourself. It can be difficult to detect an automatic debit before you suffer financial losses. If you do not know who you are talking to, follow these suggestions to help you avoid becoming a victim:

Don’t give out your checking account number over the phone unless you know the company and understand why the information is necessary.

If someone says they are taping your call, ask why. Don’t be afraid to ask questions.

Companies do not ask for your bank account information unless you have expressly agreed to this payment method.

It’s the law: Since Dec. 31, 1995, a seller or telemarketer is required by law to obtain your verifiable authorization to obtain payment from your bank account. That means whoever takes your bank account information over the phone must have your express permission to debit your account, and must use one of three ways to get it. The person must tell you that money will be taken from your bank account. If you authorize payment of money from your bank account, they must then get your written authorization, tape record your authorization, or send you a written confirmation before debiting your bank account. If they tape record your authorization, they must disclose, and you must receive, the following information:

the date of the demand draft;

the amount of the draft(s);

the payee (who will receive your money) name;

a telephone number that you can call during normal business hours; and

the date that you are giving your oral authorization.

If a seller or telemarketer uses written confirmation to verify your authorization, they must give you all the information required for a tape recorded authorization and tell you on the confirmation notice the refund procedure you can use to dispute the accuracy of the confirmation and receive a refund.

If telemarketers cause money to be taken from your bank account without your knowledge or authorization, they have violated the law. If you receive a written confirmation notice that does not accurately represent your understanding of the sale, follow the refund procedures that should have been provided and request a refund of your money. If you do not receive a refund, it’s against the law. If you believe you have been the victim of fraud, contact your bank immediately, tell the bank that you did not OK the debit and that you want to prevent further debiting.

Consumer Forum is a collaborative effort of the Bangor Daily News and Northeast COMBAT. Send your questions to Consumer Forum, Bangor Daily News, P.O. Box 1329, Bangor 04402-1329. COMBAT is a membership organization with basic dues of $10 a year. For membership information write to the above address. Please enclose a large, stamped, self-addressed envelope.


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