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Posted by Anonymous on 09/28/50 12:01
The Natural Philosopher wrote:
>
> Anonymous wrote:
> > The Natural Philosopher wrote:
> >
> >> Its not possible to drain your account just knowing the sort codes and
> >> account number. Check with your bank, but normally only YOU can
> >> authorize outward transfers.
> >>
> >> Either by some telephoned shared secret, your physical signature, or
> >> some kind of PIN.
> >
> > In theory you are right. However, banks don't check authorization too
> > well and rely on their customers to tell them when a charge has been
> > fraudulently made.
> >
> > In practice it is possible to take any amount of money from a bank
> > account just using the account number.
> >
> > http://news.bbc.co.uk/1/hi/entertainment/7174760.stm
> >
>
> No, it isn't. First of all Clarkson would have had to have had relaxed
> rules set up on his account.
No, not neccessarily. Where I live any registered company (not only
charities) which jumps through a few hoops (the usual background and
credit checks) can have their company account set up to receive debits.
Once that has been set up by the bank they can debit any account they
like with any sum they like.
Of course, in theory this requires your authorization. But in practice
it doesn't! As I have already stated, the banks assume that you have
given the company your consent to debit your account and simply send the
money off. The bank can't know if you have given your consent (no matter
whether in writing or only oral) to the company or not.
For regular debits (paying your rent, telephone company, etc.) it is
quite common to send your bank your consent that company X can draw
money from your account. For one time payments (e.g. you bought some
stuff from Amazon) your consent to draw from your account is usually
only given to the company.
However, you do have the right to dispute the charge within 5 weeks from
the day you have been informed of it by your bank. If you do so your
bank will reverse-charge the debit. They are even legally required to do
so.
> Secondly only charities are allowed to use that route. Its hard to
> profit by it other than setting up a charity and registering
> it..criminal prefer other methods.
It is not required to be a charity to receive debits. At least not here.
However, criminals also prefer other methods here. It's not so easy to
set up your account to be able to receive debits fraudulently. If a bank
does set up your account for that they usually have a very good idea
about who you are and how they can get their money back from you if lots
of your customers dispute your charges. On top of that, you get billed
quite a lot for disputed charges.
> Thirdly, it was an obvious direct debit that showed up instantly. His
> bank probably SHOULD have written to him confirming that they had set it
> up. My guess is that someone at the bank decided 'serves him right' and
> didn't...
Nope, it's common practice to neither check nor inform your customers of
any single transaction. Except perhaps for very unusual ones. You
usually get a list of all transaction once every 1-3 months, depending
on your contract with your bank.
> If you are supremely bothered, set up an account specifically for the
> purpose, and drain it every time it gets a transfer.
>
> That way of your bank is negligent enough to allow someone to pull money
> out of it without your authorisation, its their problem not yours.
Usually this is true. At least if the account is set up that there is no
allowance for overdrawing it. However, this will only protect you agains
the "criminal debits your account" scenario which is quite unlikely, as
mentioned above.
But it does not protect you from the reverse-charge fraud. If you
receive money and take it off the account and after that if your bank is
legally bound (or bound by contracts with other banks) to reverse-charge
the money transfer your received (because the sender claims the transfer
has been made without his knowledge or authorization, or any similar
reason) your account *will* be charged with it. Your account will simply
be in the red and your bank will call you and ask you to balance your
account. If you fail to do so immediately you will even have to pay
interest.
As I already said, there are several variations of the reverse-charge
fraud. The most common today are the financial agent and the ebay
variations. And there is no protection against it. Except of course
knowledge to recognizing them and vigilance in not falling for them.
Bye!
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