Warning About Banking, Debit Cards, And Paying Bills

I wanted to share some very important information with readers about Banking, Debit Cards, and Paying Bills.  There are some very bad things that can happen, that I want to point out to you.  Some of these things have happened to me, and people that I know.

The very bad things that happen, are the result of people placing too much trust in how things “should work”, “usually work”, or are “supposed to work”, instead of thinking “What is the worst that could happen?”.  As negative as this sounds, where financial transactions are concerned, you should be thinking, “What is the worst that could happen?”

  1. Many, many people, use “AutoPay” to allow utility companies to directly withdraw money from their checking account for their monthly electric, gas, or water bill.  It sometimes happens, that there is an error or mix up in the metering record, and some people have had all of the money in their checking account withdrawn by a utility company, thousands of dollars, all of the money that they had.  Then, the utility companies that have removed all of the money from someone’s checking account have said, “We have found no error in the meter reading or the meter.  The charges are correct.”  Some people have had to fight for months to get their money back, and the utility company could not care less.  Please, do not keep all of your money in one checking account.
  2. Many people use their debit card to pay for fuel.  It has been in the news, where people used their debit card to pay for fuel at a gas station, and they later found that all of the money in their checking account has been removed, several thousand dollars, for one purchase of gasoline.  There was a mistake at the pump, where the pump electronically registered that hundreds of gallons of fuel were pumped.  All of the money that these people had, was removed from their checking account.  The response from the billing company and the bank were, “There appears to be no error.”  The billing company and the bank could not care less.  It took these people several months to get their money back.  Please, do not keep all of your money in one checking account.
  3. I recently viewed my on-line bank statement for my checking account.  I saw that my check for my monthly credit card payment, had been drawn against my account, and that my credit card payment was received on time.  About one week later, I received an e-mail from my credit card company stating that my payment had not been received.  I had to telephone my credit card company, insist that they had cashed my check, give them the check number, check date, date it was drawn on my account, and give them the transaction number.  It took the credit card company two weeks to find out that my check payment had been applied to someone else’s account.  No apology.
  4. It has happened to my father, my grandmother, and other friends of mine, that an employee, worker, or relative, has removed a check from the middle of a book of checks, and written a check payable to them, and forged the account holder’s signature.  When this was discovered by the account holder viewing their bank statements and what checks had been drawn on their account, I know of one instance when the bank said, “So what.  What are we supposed to do about it?”  I had always thought, that when someone steals a check, and forges a check, that this is treated as a fraudulent transaction, and that the account holder is not responsible for this fraudulent transaction.  This can be a very bad situation, when the bank does not want to cooperate.  Please, do not keep all of your money in one checking account.
  5. I have completed a deposit slip, handed the bank teller the deposit slip and the checks to be deposited, received a receipt, and walked away.  While walking away and looking at the deposit receipt, I noticed that the deposit was made to someone else’s account.  Please, look at your transaction receipts.
  6. I have sent a fax to my insurance agent when my vehicle insurance renewal was due, listing the coverages that I wanted for each vehicle and trailer.  Rather than requiring my insurance agent to return a fax to me with a price for each item, I just asked him for the grand total, and I paid by credit card.  I later found out, that my insurance agent had failed/forgotten to insure the truck that I was driving, though it was one of the vehicles listed on the fax that I had sent to him.  Had I gotten into a vehicle accident driving a truck with no insurance, I would have been financially responsible for property damage and people’s medical bills.
  7. For about ten years, my father had been paying for an insurance policy on a house in a foreign country.  He would pay by check, once each year.  He would see that the check for the insurance policy was drawn on his bank account, that the check was received by the due date.  On approximately the eleventh year, my father talked to a different person than he normally dealt with at the insurance company.  The insurance company reviewed their files very carefully, but there was no such account or policy with their company.  What had happened was, this particular insurance agent had created a fake policy and a fake account that did not actually exist with this insurance company.  When he received the insurance payment check for this policy each year, he just went to the bank and cashed the check, there was no real insurance policy.
  8. As in example #7 above, where an employee of an insurance company was able to either deposit or cash a check that was not made payable to him personally, this does happen under certain circumstances.  It has happened to business owners that I know, who routinely send their administrative assistants to the bank with checks and deposit slips, that this has led to financial fraud.

It begins with a business owner entrusting an administrative assistant to take checks to the bank with a deposit slip, to deposit these checks into a company account.  Either right away, or before long, the deposit slips are in the administrative assistant’s hand writing.  Soon, the administrative assistant is asked to deposit some of the checks into this business account, other checks into that business account, and possibly even a personal account.  Next, this does happen, the business owner needs cash, and he sends the administrative assistant to the bank with checks, a deposit slip, and cash back requested.  Or, the business owner needs cash, and he sends the administrative assistant to the bank to cash a check.  Once this has happened, an administrative assistant who desperately needs money, will wait for the chance to take checks to the bank to be deposited, and fill out a deposit slip with cash back requested, this time the cash is for themselves.  Or, they will just cash a check that was payable to the business.

Once administrative assistants have been going to the bank each week to make company deposits, and these deposits have had some variety to them, such as deposits to different business accounts, personal accounts, joint accounts, and deposits with cash back, or even check cashing, the bank tellers have no way of knowing when the administrative assistant is doing something that he/she is not supposed to be doing.

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