Close the door on direct deposit?

[zedd]

Back in the day when I was a wage slave, I had my pay direct deposited. Thinking about it this morning, former employer still has my account number and authorization.
Am I being paranoid or should I close out that account?

 

[Brett_Cameron]

Only if they had authorization to take money out of your account instead of just being able to deposit.

 

[Pleeplus]

Only if they had authorization to take money out of your account instead of just being able to deposit.

+1 from what I understand the policy of taking $$ from employees accounts is severely frowned upon by most companies unless some type of "special" arrangement is set up. Last year I switched jobs within megacorp and they termed my employment instead of documenting it as a transfer in the systems. This snafu caused all my vacation time to be direct deposited in my bank account. After several conversations with payroll I ended up having to send a personal check back to megacorp for the time as they refused to take the $$ out of the account. Looking back now it was probably a good thing as my confidence that the payroll department would have completed it correctly is minimal.

 

[rbmrtn]

Here's a link to direct deposit FAQ from federal reserve

http://www.frbservices.org/files/eventseducation/pdf/DepositGuide.pdf

 

[Hamster]

Anyone you have ever given a check to also has your account information. Doesn't seem like your ex-employer having it is much of a risk.

 

[travelover]

I'd leave it open. When I retired, my former employer kept depositing checks anyway, though smaller.

 

[scrabbler1]

When I left my company, they mailed me my final paychecks instead of direct depositing them. That told me they terminated their direct deposit capabilities. (Why would they go through the time and expense of producing a check - actually 3 checks - when they did not need to?)

 

[Major Tom]

This post reminded me that when I was a kid and had my first job (as a 16 year-old), workers were still being paid with cash in a small brown paper envelope every Friday. Included with the small packet of bills and a few coins was a slip of paper with the hours I had worked and a brief calculation to show how my pay was arrived at.

How times change!

 

[ducky911]

I owed a small company and had everyone on direct deposit through a payroll service. The service put my partners bonus check into his sons (jr) account by mistake. I was surprised that they where able to get it back out without anyone having to sign.

On Monday I would call the bank.

 

[martyb]

I probably don't have a choice since my retirement payments will be coming from the fed & the military.

 

[Alan]

Anyone you have ever given a check to also has your account information. Doesn't seem like your ex-employer having it is much of a risk.

+1

To have an organization pull money out via direct debit is a totally different matter and needs a lot more authorization.

If you know someone's account and bank details you can even write a check and mail it in, to be deposited into their account without their permission. We used to do this fairly often when our kids were away at college. Chase quick pay makes this a lot easier these days but is still light years away from the UK and Europe where it only takes an hour or so after clicking "submit" for the money to be transferred from your account into someone else's.

 

[Rustward]

I wouldn't worry about this.

However, the fine print on most direct deposit authorizations gives the employer the authority to withdraw any over payments.

Not to worry. They are probably not going to try to screw you.

 

[ERhoosier]

I owed a small company and had everyone on direct deposit through a payroll service. The service put my partners bonus check into his sons (jr) account by mistake. I was surprised that they where able to get it back out without anyone having to sign.

On Monday I would call the bank.

I've had similar experience with DD as well. I've read the Fed's pamphlet DD inc. claim of "no withdrawals", but some employers require signing a waiver or other contract allowing them to make WD's to correct payroll errors &/or debit fees owed to employer. I pulled my DD agreement from my last employer & it included similar employer WD provisions.

zedd is NOT paranoid, at least on this matter . Payroll dept's are generally honest, but some are notorious in their incompetence & slothful in correcting their mistakes. Understandable that many set up separate accts for receiving DD's and maintain minimal balances by sweeping DD's into their 'main' accts.

 

[marko]

I"m guessing that even smallish companies mostly use a payroll service rather than do this themselves. They'd be the ones with your deposit information as well as your SS#. Friend of mine only has 25 employees and uses a service rather than doing it himself.

 

[JOHNNIE36]

This post reminded me that when I was a kid and had my first job (as a 16 year-old), workers were still being paid with cash in a small brown paper envelope every Friday. Included with the small packet of bills and a few coins was a slip of paper with the hours I had worked and a brief calculation to show how my pay was arrived at.

How times change!

Reminds me also of when I was a kid and my dad got paid in cash. The company he worked for did this when you made the supervisory ranks. We lived in a small town and the company didn't want anyone to know what the management personnel were making. So, no checks going to the banks for the tellers to see. As you said, days gone by.