posted on June 25, 2001 05:10:29 PM
Prospective new sellers: Before you give eBay your checking account info, consider this: If some person/company posts a fradulent electronic debit to your checking account, you are NOT protected against loss! The $50 statutory limit for credit cards does NOT apply, and your bank won't cover the loss. People have had checking accounts emptied with no recourse by this.
This situation came up with PayPal earlier...they're trying to reassure people with insurance against it (insurance, though, is NOT the same as protection under law, as the insurance carrier is not legally bound to accept your claim or cover the loss).
This eBay policy is even more brazen. I hope it's vigorously resisted and moribund alternatives like Yahoo jump on it with both feet for competitive purposes.
I point this out also because a few months ago I had my main credit card cancelled on me (not finding out until it was declined at the store) because of the Egghead.com hack. The data was compromised and stolen by hackers, but fortunately they didn't have time to sell the lists or attempt charges on my account (They stole so many numbers they couldn't get to them all!)
I've also been a 2-time victim of lower-tech credit-card fraud. I didn't have to pay anything either time because I was in no way at fault and, more importantly, because there was the $50 cap (which was waived).
If that had been a checking account, though, and some entity had run through an fraudulently presented preauthorized electronic debit, then that money is GONE, with no recourse. It's the perfect thing for offshore scamsters (the same ones that come up with the spam in your mailbox)
Ebay also doesn't need that kind of information from every seller. They DEFINITELY don't need it for I.D. verification, and have no need to store it even if they don't have reason to use it.
Ebay is betting you'll have to give in because their dominant market share makes them seemingly the only game in town. Wall Street will be watching to see if they can make the new policy stick. IMO it's a new height in intrusiveness.
posted on June 25, 2001 05:28:55 PM
I've heard of it, but I don't understand this "preauthorized electronic debit" deal that gives vendors access to your bank account.
As I understand it, the vendor does not have to provide any proof that they have my permission to tap into my money. All they have to do is have the account information (which anybody who has ever received a check from me would have), and say to the bank, in effect, "It's OK, triplesnack said so," and the bank coughs up the dough.
I ordered some new checks from Checks Unlimited a few weeks back, and I was surprised when the customer service person told me, "OK, that's $49.60, and we'll take that directly out of your account." Didn't seem like they recorded -- or documented in any way -- me giving my permission (and I don't actually recall that I even did, except perhaps implicitly), but it just doesn't seem right to me that the bank hands out my money on somebody else's say-so. I would love it if someone here had more details about how this works exactly. I find it hard to believe there's no protection or recourse if this should be done fraudulently!
Is it only checking accounts that are vulnerable to this, or is it savings accounts as well?
Are there any steps that you can take at the bank to forbid this kind of transaction or activity from taking place on your account?
posted on June 25, 2001 05:44:10 PM
Maybe yisgood will see this & have some answers. I value his opinion & advice.
It seems that everyone now wants your checking account # for verification & to prevent fraud, but they offer no protection when you give it. So who's protected???
posted on June 25, 2001 05:48:17 PM
Where did you get the information that your bank is not liable if they permit an unauthorized entity to empty out your account? If my checkbook is stolen, and my bank cashes fraudulent checks, they are damn sure liable. It may be a mess to straighten out, and it may take a while, but fraud is fraud. If you're worried about someone accessing your checking account, start a second account and give eBay that account number. Keep very little money in that account.
posted on June 25, 2001 08:19:26 PM
birdwatcher: If it's a paper check then it would fall under forgery laws and the bank would assume some liability for cashing without checking the signature. No such situation with electronic debits, though.
The reason PayPal, eBay and numerous others are trying to get into your bank account is because they want to avoid having to use credit cards for billing and pay the credit card companies a cut.
The worst companies want to have automatic-debit access to account. NO one should get that under ANY circumstance. Why? Besides the protection issues, it would be an open invitation to them to tack junk fees and other invented charges and fees on, figuring you won't notice. Just like banks themselves have been doing to accounts for years.
posted on June 26, 2001 06:33:50 AM
Wow, wasn't aware they could empty out your checking account with you having no recourse! Have to move my money out today!!
posted on June 26, 2001 07:26:52 AM
I've mentioned this before, and there's another poster who's mentioned something like this.
Because a lot of online businesses need a checking account number in which to deposit money they owe you (PayPal, Amazon Marketplace, and half.com, to name just three), it really is in your best interest to find a bank that will let you open a very small balance checking account with very low or no fees. I have one, and my average balance last month was less than $10 because three days after every transfer from one of those entities, I withdraw the money or transfer the money into my "real" account.
If you're under 55 years old you may have to pay some fees, but if over, you can probably get an account like this for nothing. I can't imagine letting a large company have access to my main account under any circumstance - the larger they are, the more mistakes they make.
posted on June 26, 2001 08:31:05 AM
My credit union allows everyone in my family to have their own free checking account (kids too!), with more than one person listed. So, I have my main checking account, and a joint account with my 15 year old, and I use that account to receive paypal money, and immediately transfer it online to my real account.
So, check your bank/credit union for no cost accounts.
posted on June 26, 2001 09:04:19 AM
I'm a big fan of credit unions as well, though mine has such good service that they'll cover overdrafts from savings accounts (not exactly what you'd want with an unauthorized debit, but their heart is in the right place).
Another option is to go with an Internet-only bank like Netbank. I believe they have an account option with no maintenance fees and a $100 minimum balance. Still, having to do this as a defensive measure underscores how dysfunctional the current system is.
posted on June 26, 2001 10:40:09 AM
I think another large part of this, is that they can pin responsibilty to a SSN. Even if I open a netbank or something, ebay has a means of verifying I am who I say I am...and I woudlnt be surprised if they'd be willing to hand over identifying info to any crackhead customer wh ohappens to be a laywer and writes htem a letter
posted on June 26, 2001 11:56:58 AM
According to my bank when I asked them this question (what recourse do I have if an unauthorized withdrawal was made from my account)...
The company/person requesting the debit is presumed to have my permission (the bank does not need anything on file to prove I did give permission). If in fact they did not have my permission to do the debit (or the amount is wrong) all I have to do is notify the bank that the debit was not authorized and the bank will automatically do a reverse debit against the person/company that did the original debit.
But...I went ahead and opened an account that is just for paypal deposits..has a $25 balance requirement and costs $3 a month. I didn't feel like leaving my main business account open to any problems with paypal. Billpoint and ebay have my main account number for deposits (billpoint) and payment debits (ebay)
Have to move my money out today!! 