Automatic Debit Scams
Fraudulent tele-marketers 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 tele-marketers. 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.
HOW THE SCAM WORKS
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 tele-marketer often asks you right away, "Do you have a checking account?" If you say "yes," the tele-marketer then goes on to explain the offer. Often it sounds too good to pass up.
Near the end of the sales pitch, the tele-marketer may ask you to get one of your checks and to read off all of the numbers at the bottom. Some deceptive tele-marketers may not tell you why this information is needed. Other deceptive tele-marketers may tell you the account information will help ensure that you qualify for the offer. And, in some cases, the legitimate tele-marketer will honestly explain that this information will allow them to debit your checking account.
Once a tele-marketer 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 takes the amount on the draft from your checking account and pays the tele-marketer's bank. You may not know that your bank has paid the draft until you receive your bank statement.