Bank routing number security?

[teejayevans]

Assuming you either wrote a check or allow a payment be directly deducted, what security prevents them from just withdrawing more money at a later date? All they need is account number and bank routing number.

 

[pb4uski]

It is easy to look up the routing number... many financial institutions put it on their webpage... it just identifies the bank.

The account number is more critical and that should be kept secure.

What prevents them from just withdrawing more money at a later date? The prospect of many years behind bars for larceny.

Most places do not retain your account information... once the transaction is processed it is erased. Same thing with credit card account information.

 

[Spock]

Assuming you either wrote a check or allow a payment be directly deducted, what security prevents them from just withdrawing more money at a later date? All they need is account number and bank routing number.

That's why I never allow withdrawals directly from an account. I have one life insurance policy that requires either direct withdrawal of payments or they cancel the policy. So I opened a special checking account for them to pull from.
Debit cards are out of the question.

 

[teejayevans]

That's why I never allow withdrawals directly from an account. I have one life insurance policy that requires either direct withdrawal of payments or they cancel the policy. So I opened a special checking account for them to pull from.
Debit cards are out of the question.

Yeah, this is an insurance company, if using credit card they’ll charge about 20% fee.

 

[Looking4Ward]

I never give permission for any expense to be automatically deducted from a bank account.

ACH withdrawals from bank accounts are extremely difficult to reverse, whether it's a simple billing error and I'm overcharged or it's outright fraud because someone used the Routing and Account numbers off a check.

It's another reason I never use checks anymore either.

 

[pb4uski]

That's why I never allow withdrawals directly from an account. I have one life insurance policy that requires either direct withdrawal of payments or they cancel the policy. So I opened a special checking account for them to pull from.
Debit cards are out of the question.

I have a life insurance policy that is set up for autopay for over 35 years and have never had a problem... WADR, a separate checking account is a bit paranoid IMO.

In fact, I've used autopay for virtually all payments for the last 5+ years and have never had a problem.

I don't use debit cards, but only because credit cards provide so much better consumer protection and I get my 2% cash back with a credit card.

 

[Dash man]

I’ve switched to autopay for utilities, Medicare (including supplements and prescription plans) and credit card payments to ACH so we don’t miss anything if I should become incapacitated. I’ve been paying the bills for so long, DW would easily procrastinate or simply miss an email with a bill if I did do this. ADD doesn’t help. I’ve never had a problem, so will continue.

 

[gauss]

Assuming you either wrote a check or allow a payment be directly deducted, what security prevents them from just withdrawing more money at a later date? All they need is account number and bank routing number.

Not having a legal contract in place that allows them to do this (unless one was unwittingly given via click to agree web site).

Also the accountability of knowing where the funds went (ie their bank) also serves as a gatekeeper on the other side of the transaction.

If someone did give legal permission for them to make future withdrawals then that is a different story.

-gauss

 

[W2R]

Not having a legal contract in place that allows them to do this (unless one was unwittingly given via click to agree web site).

Also the accountability of knowing where the funds went (ie their bank) also serves as a gatekeeper on the other side of the transaction.

If someone did give legal permission for them to make future withdrawals then that is a different story.

-gauss

Exactly! This is what my bank told me years ago. They can't pay anything out of my account without my permission.

This is my third decade of having all my regular bills and many other bills automatically deducted from my checking account, and no problems.

 

[Montecfo]

I allow auto-pays. Risk appears to be quite small. Also pay property tax using e-check. Same view.

 

[gauss]

The one defensive move that I do here is to stop auto-pay a couple of months before I plan to close an account and pay the last few months with a bank check or push payment.

It's probably just psychological, but I feel better knowing there will be no unexpected withdrawals (but there may be still be unexpected bills of course.)

-gauss

 

[jazz4cash]

There’s really no security against anyone using your routing and account numbers to extract funds from your account. I recently ordered checks from Amazon with no verification that It was my checking account. I don’t keep much in checking but there is overdraft protection. I only have two merchants authorized to pull funds from my account. I try to only push funds from my account. I do write a few checks to landscapers, house cleaners, and some small charities that could expose me to bad actors. Monitoring and alerts are the best protection. I don’t worry about big businesses that I use regularly but mistakes do happen.

 

[PatrickA5]

I've been using autopay debit from my bank accounts for a few utilities for decades. Never had a problem. Everything else allows a credit card.

Agree with Gauss above. If I knew I was going to cancel a service in the future, I'd probably stop autopay early.

 

[donheff]

I wonder how this doesn't result in a lot of fraud but it seems like the traceability must allow the banks to keep enough track that they can recover losses. The idea that you should protect your account number seems odd to me. It is written on every check so it isn't exactly a secret.

 

[teejayevans]

I wonder how this doesn't result in a lot of fraud but it seems like the traceability must allow the banks to keep enough track that they can recover losses. The idea that you should protect your account number seems odd to me. It is written on every check so it isn't exactly a secret.

What about something like western union cash transfers? Or maybe they restrict ACH transfers to established banks.

 

[ERD50]

I wonder how this doesn't result in a lot of fraud but it seems like the traceability must allow the banks to keep enough track that they can recover losses. The idea that you should protect your account number seems odd to me. It is written on every check so it isn't exactly a secret.

Agreed. And with your name and address (and maybe phone #)! Yet, we are told we need to shred anything like that, but we pass the same info out routinely and voluntarily. Seems odd.

-ERD50

 

[Midpack]

We don’t keep that much in checking, why would anyone? Autopay from checking is too convenient to ignore, we’ve done it without incident for about 20 years - mostly utilities and various government agencies, not likely to scam us IMO.

 

[CRLLS]

20% charge for using a charge card? That seems way out of line. AS I recall 2-3% is more like it. I don't worry about somebody trying to take out more money than they are able to from a check. To do that, they would need another blank check, a password to my account, or a false identification if done in person with a withdrawal strip. In that last case cameras would have his photo for sure.

Auto pay is a different situation. The company you have given permission to could conceivably withdraw more than they are entitled to. Not being a security expert, I suspect that an individual in that company trying to take money from me would be difficult. At least I hope so. Still, I allow this for one utility bill and my Medicare Supplement monthly premium. I like getting mailed bills. It makes me at least look at what the charges are. It also makes me time when the bills get paid, I manage the cashflow from my checking account this way. A habit from when savings accounts paid real interest. Old habits die hard!

 

[ERD50]

We don’t keep that much in checking, why would anyone? Autopay from checking is too convenient to ignore, we’ve done it without incident for about 20 years - mostly utilities and various government agencies, not likely to scam us IMO.

I don't think the amounts are the issue (but what do you mean by "that much"?), a scammer doesn't know your balance. I think it's more the inconvenience in dealing with a fraudulent charge.

But like you, I've been doing this a long time w/o incident, so I don't worry about it, but I'm curious.

In fact, the only bill pay problem I've had (other than maybe some minor glitches on initial set up of a biller) was in ancient times with a paper check snail-mailed in. The check was cashed, but the utility said I had not paid my bill. Apparently, they applied my payment to someone else. I had to get a copy of the cleared check, snail mail it to the utility to get it cleared up. Never had that happen with the internet autopay systems.

-ERD50

 

[Midpack]

I don't think the amounts are the issue (but what do you mean by "that much"?), a scammer doesn't know your balance. I think it's more the inconvenience in dealing with a fraudulent charge.

We’ve never had a fraudulent charge. And if someone cleaned out our checking account it wouldn’t be the end of the world - we deliberately keep a low balance for that reason, while using autopay when convenient. We don’t need to care what scammers know. Those who have concerns could keep balances low to limit risk…

 

[CRLLS]

ERD50, I had a similar situation where my mortgage company paid both my, and somebody else's RE taxes from my account. It caused my account to be overdrawn big time. I had 6 months to bring it up to date and they increased my escrow by 2x. I think my new monthly payment was >3x my normal rate. That got my attention quick. They found the mistake and corrected it without issue. That was an internal accounting mistake though, not one regarding ACH fraud.

Like I mentioned earlier, I like paper billing. Getting a paper bill makes me open it and look at it. When my utility bill with auto pay (on a CC) comes due, I don't get a bill, I get an eMail or a text that the bill is available online for me to look at. I don't take the time out to look online. They don't say how much it is in the eMail. I don't get any kind of notification with my MC supplement bill, they just withdraw it from my account. I have to remember to write it in my checkbook. I do periodically balance my checkbook. I would see if something went wrong. I wonder how many of the younger generations still balance their bank accounts.

 

[PatrickA5]

I have to remember to write it in my checkbook. I do periodically balance my checkbook. I would see if something went wrong. I wonder how many of the younger generations still balance their bank accounts.

I do use a check register. I also put everything in Quicken. None of my kids (20's and 30's) would know what a check register even is. I asked the kid at the bank for a new register. He gave me a withdrawal slip. I explained that I write down my deposits/withdrawals/checks in the register and he informed me that all of that was "in the App". LOL!

The banking industry probably doesn't want people using registers and knowing exactly how much money is actually in the account. More overdraft fees!

 

[Sunset]

... I don't worry about somebody trying to take out more money than they are able to from a check. To do that, they would need another blank check, .......
...

Nope, they can use the check you already signed, just wash it and add some zeros , change the name if they stole the check from mail or someone you intended to pay.
It is a crime, but that's how it's done.

 

[walkinwood]

Assuming you either wrote a check or allow a payment be directly deducted, what security prevents them from just withdrawing more money at a later date? All they need is account number and bank routing number.

My local utility, cable company, HOA and credit card companies have been automatically withdrawing money from my bank for decades now and I've never had an issue. They've always withdrawn exactly what was in the bill. And I make it a point to check the bills before they are due.



Of course, I wouldn't hand over my bank information to just anybody.

 

[Trailwalker]

I think I've written about this before, but I had a case of fraud with an Alliant credit union account. I had the account as a convenience because they have a better no-fee ATM network than my sticks and bricks bank. I used the ATM card a few times, but did not write any checks or use the account for any auto-payments. About six months went by when I did not check my monthly statements. During that time, someone used my routing number and account number to set up auto- payments for a pre-paid Verizon cell phone account. Alliant reimbursed me for the most recent 60 days of payments but denied liability beyond that time period. They were totally disinterested in tracing the payments and suggested I contact Verizon. Verizon was similarly disinterested and referred me back to Alliant. I closed the Alliant account and chalked it up to an educational cost. Part of what I learned was that the financial institution's ACH liability is only 60 days. The other part was to check my monthly statements religiously and keep fewer accounts.