Electronic funds transfer in the US, stone age?

Martin Comb's $95k cheque story hints at some details. In his case his bank paid the junk cheque into his account, the bank at the other end said "no way", and his bank failed to repudiate the deposit within 10 days.

The money was then his, so he withdrew it in the form of a bankers bond (or something which is a negotiable as cash), stuck it in a safety deposit box, and smiled sweetly when the bank went ballistic.

He had to be very careful to avoid being done for fraud. (Think of the difference between carrying a large torch or a baseball bat for personal protection)

He got in touch with the (retired) bloke that wrote the textbook on this subject, and the author smiled and pointed to where he had anticipated the possibility.

h,

f

In Canada debit cards are very popular with merchants as the fee is only

$0.10CAD per transaction (about $0.073USD), vs 3% for credit cards.

So for transactions over ~$35CAD it is cheaper for the customers to pay with debit. As a small businessman I ask customers if they don't mind paying via debit for their purchases. We also have had the chip cards for about five years now.

True, however customers can also perpetrate fraud by claiming that the product was not as ordered and the seller has no proof of what was sold.

This is a scam done by some using PayPal credit card payments - we got hit for $4000USD back in 2006 via that process. PayPal even admitted it was fraud, but could do nothing about it...so we simply don't take credit cards for large purchases.

If you live in the USA and you pass a bad cheque, isn't that fraud and you could be arrested? I thought that was the case at least until I visited this site:

Really, I thought that offered more protection for the consumer? Can you

expand on that?

VISA security calls me when they detect odd transactions. I loose a card

every year or so to fraud. What I do now is I have at least two cards. One is only for automatic recurring transactions (gov. bills, internet, cable, etc.) and another for all other purchases. I have yet to have the

recurring charges card be compromised, but the other one gets caught pretty much once a year and they send me a new one. At least I don't have to contact all my recurring CC accounts to update them!

Agreed, much the same here in Canada. I have had no fraudulent charges stick.

The one issue I have about CCs is their fees. You know it wasn't that long ago (1970s - it was called Usury) that it was illegal to charge more than 5% interest over prime - that changed in the 80s, credit cards

and other businesses went up with the bank rate, but afterwards never came back down. VISA and the others still charge 19% or more for late fees - which is outrageous. Not to mention drives many people into poverty or bankruptcy because A) the bank gave them too high a credit card limit, then B) the interest fees finished them off when they couldn't meet monthly payments...

(scary stuff - done during the Carter period, what the hell? - but Reagan, etc. never 'fixed' that either)

/ (more scary sh.t)

John

The online electronic funds transfer binds only to account number and sort code or IBAN. The recipients name isn't actually checked.

Your faith in the banking industry is touching. With a common name like Brown I have seen more than my fair share of serious banking c*ck ups.

The best one was when I moved from university and set up a joint account with my wife. The bank helpfully scooped up all the M T Brown accounts they could find and pointed them at our new joint account.

Big problem there was more than one of us. Poor old Morag T Brown suddenly found her bank cards didn't work and salary had vanished.

It took them quite a while to unpick the resulting mess.

--
Regards, 
Martin Brown

There were once two others in IBM with my same name (including middle name). One was maintenance contractor on the same site as I was. He was getting my pay stubs for a while (probably wondering where the money was ;-). The other person was a corporate executive (a VP of personell, or some such). I'd often get email intended for him, sometimes including sensitive stuff like salary plans and executive salaries.

There was another guy in IBM P'ok named "Purdy Outhouse".

>

Excuse herself and discretely see her manager for instruction. My wife worked in banks for twenty years. She would never show incompetence to the customer. That's a *bit* no-no.

That's pretty silly, even for you.

Are they acceptable forms of payment? If so, the bank shure as hell better know what to do with them. If the line teller doesn't know, she should speak to someone who does, not the customer.

That's not goofy at all. It's a feature of the constitution. Anyone with half a brain knows that power tends to corrupt. Governments have absolute power.

Of course you have. You *want* big brother to run your life.

Well, that is BofA - the merchants brain fart's skunk smell. I have bill pay from one bank, it is directed online by logging to the utility of question. Login, to PGE / Comcast / whatever and fill out a form to indicate payment amount AKA transfer amount. Worst case i have seen is 3 days due to weekend plus holiday. And i have seen that to be the case with three various banks.

Move away from a crap bank, to a decent one (NOT Wells Fargo). Or, find a credit union that can handle all such transactions; ASK FIRST.

Nothing wrong with a bit of age on a technology. Sewing, for instance, with needle and thread: we'd feel naked without it.

I expect there is something similar in Norway, but I don't know the details of the limits (having had no cause to need them!).

That's the kind of taxing I mean (though income tax, employee taxes, corporate taxes, etc., might also be avoided if everything is off the record). Perhaps the don't have an equivalent of that in the USA, or that it does not apply to tradesmen services?

It could quickly become the buyer's problem if he /knew/ the taxes were being evaded, or should reasonably have guessed based on the prices. But it would have to be an extreme case before the authorities would find it worth the effort to go after the buyer rather than the seller.

You are confused. The account number is never used. If I pay you by online billpay I enter your name and address and you get a check exactly the same as if I had written the check myself and mailed it to you. No electronic transfer.

Not really relevant.

--

Rick C

It is well known that such high tax rates promote fraud. We don't have that here. Sales tax runs from 0% in a few states to 10% at the high end. 10% is pushing people.

--

Rick C

(That may be the case here too - it's a level of detail beyond my knowledge. All I know for sure is whether the money comes directly from my account, or if it comes from someone else - the bank or VISA.)

Passing a bad check is only criminal if you knew it would bounce when you wrote it. If you pay with a check and then later overdraw your account, that is not criminal.

I once swapped the last two digits on my card and the charge went through. I found out about the problem when the CC company called me to see if I had placed the charges on someone else's account.

--

Rick C

That is different from online billpay. Billpay uses ACH transactions, same as ATM machines. When you give your vendor your checking account number, they present an electronic check to your bank the same as if you had written a paper check. No one handles the paper anymore. They digitize the info and send it electronically. In this case there is no paper check, so they don't send an image, just the info. It goes through as fast as a check can which is one bank day I believe.

--

Rick C

I think it is you who are confused by US shit paper banking.

I described how it works in the civilised world where paperless internet banking has been working for several decades. UK "Fast Pay" system is available to almost all bank customers now. I have been using it for nearly two decades and I know exactly how it works. But don't take my word for it - here is the definitive description:

It is. The banks can be incredibly stupid.

--
Regards, 
Martin Brown

What?

There are no cheques in "online banking". It is a purely electronic transaction bank to bank that takes minutes (worst case 3 hours).

--
Regards, 
Martin Brown

It isn't incompetence not to have ever been trained in or seen an obsolete paper form of payment that hasn't been used in the country for several decades. Banks there do not issue paper cheque books at all.

The same situation arises in the UK with bank books on very old legacy accounts - only a handful of the staff know know to set up and operate the archaic hardware that updates the books with the new balance. Such accounts are almost extinct as their owners are typically in their 90's.

--
Regards, 
Martin Brown

Here you enter the bank sorting code and the account number. For corporations, the bank often (but not always) indicates the corporations name as a sanity check.

For individuals you can enter a name, but I believe this is principally an aid in case problems arise.

There may be other mechanisms where the recipient's name is the primary identification, but I haven't seen them.

It indicates that whether or not "They do a lot to help you not screw it up", it isn't sufficient and the wise take extra precautions.