Direct Deposit?

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jmellc

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Location
Durham, NC
Occupation
Facility Maintenance Tech. Licensed Electrician
Just got a decent lighting job I bid. Customer says today I need to sign a direct deposit form for them to deposit payment to my account. 1st time I have had this situation. I have worked for employers who paid that way & it was OK. But this company's home office is in Philadelphia, way out of state, harder to deal with if I need to go over someone's head. I know if they can credit my account, they can also debit it, either by error or on purpose. I am not comfortable with this at all. I badly need the work but don't want to put my account at risk in any way.

Have any of you dealt with this situation?
 
They have a computer terminal where they enter account & bank routing info. They can use that to credit or debit an account. The authorization form specifies only permission to credit, but that does not mean they cannot also debit. The same computer screens can do either.
 
mjf said:
I believe you have been misinformed. Once money is deposited in my bank account (no matter how it is deposited) there is no way any one can debit my account without my authorization unless they illegally hack into my banks system.
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My bank tells me otherwise. The same computer that can make a deposit can also make a withdrawal.
 
jmellc said:
My bank tells me otherwise. The same computer that can make a deposit can also make a withdrawal.
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I had a payroll deposit once that was in error by several thousand dollars. I never even noticed as it was deposited and removed and the correct amount put in within a few minutes.

The same problem can happen with credit card merchant accounts.

I would talk with your bank and see what you can do to protect yourself. Some banks will allow you to have an account that you can sweep into another account so there is no money to remove. As a practical matter, it is an account that can only be paid into.
 
jmellc said:
They have a computer terminal where they enter account & bank routing info. They can use that to credit or debit an account. The authorization form specifies only permission to credit, but that does not mean they cannot also debit. The same computer screens can do either.
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If you don't want them to deposit money in your account I'll be a real friend and let them deposit it in mine. :happyyes:
 
growler said:
If you don't want them to deposit money in your account I'll be a real friend and let them deposit it in mine. :happyyes:
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I'm happy to have them deposit $ in. I just don't like them having access to my account. They can also take $ out the same way. These are people I never heard of, from way out of town, out of state. I prefer a check from them or a credit card.
 
jmellc said:
My bank tells me otherwise. The same computer that can make a deposit can also make a withdrawal.
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If my bank told me that the outside person can make a withdrawal from my account via the direct deposit system, I would be looking for a new bank
 
don_resqcapt19 said:
If my bank told me that the outside person can make a withdrawal from my account via the direct deposit system, I would be looking for a new bank
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Reversing a deposit transaction and making a new one for a different amount is slightly different from withdrawing an arbitrary amount, but the effect you see will be the same. :)
 
don_resqcapt19 said:
If my bank told me that the outside person can make a withdrawal from my account via the direct deposit system, I would be looking for a new bank
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I could be wrong, but I assume that anyone with an account number can make a electronic withdrawl.

If that wern't the case, I don't think I would get so many emails from Nigerian "Officials" promising to give me a windfall if I just let them deposit a few million dollars into my account.

I agree with what others said: Set up a separate account with another bank, and move the money as soon as you get it.
 
steve66 said:
I agree with what others said: Set up a separate account with another bank, and move the money as soon as you get it.
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:thumbsup:
This is a good idea in any case. It helps to shield your assets from 'canceled' credit card charges and fraudulent checks
 
I have a message out to the customer that I prefer a check or credit card. Will probably hear back from her Mon. I need the job, so if that's the only way, I guess I have to do it. I do not have funds to set up a separate account but that is a good idea. I may do that if I have more of these in the future. I do have some leverage, as I was probably lowest bid by far. I'm sure they don't want to pay someone else's higher price.
 
jmellc said:
... I have worked for employers who paid that way & it was OK. ... way out of state... I am not comfortable with this at all. ... don't want to put my account at risk in any way.

Have any of you dealt with this situation?
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You took essentially the same risk when you let your former employers do direct deposit of payroll. If you still have that account, it probably still is at the same risk.

FWIW, in the last few years, I have had direct deposit payment arrangements with payers in Arizona, Houston, Reno, Tennessee, and Washington State. No problems (to date ;)).
 
steve66 said:
I could be wrong, but I assume that anyone with an account number can make a electronic withdrawl.

If that wern't the case, I don't think I would get so many emails from Nigerian "Officials" promising to give me a windfall if I just let them deposit a few million dollars into my account.

I agree with what others said: Set up a separate account with another bank, and move the money as soon as you get it.
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As others have said deposit yest yes , but the ban k should not authorize a withdraw. Anyone can get a bank number its on your check does not give them the authority to make a withdrawl. The person would have to claim you wrote a check electrionically. I would never do that.
 
A direct deposit is authorizing the automatic clearing house to DEPOSIT funds. not a DEBIT or withdrawal. Of course any one can withdraw with your account/routing numbers, but that's fraud and most bank accounts are protected from this and the bank must credit your account within a few days once you file a claim. Then the bank will investigate and make a determination and leave you with the money or transfer the money back if it is found to be a legitimate transaction. (speaking from experience of having a random electronic withdrawal, which was found to be a bank computer error :rant: )

I have customers that pay like this, net 7 days. It's a beautiful thing.
 
nhfire77 said:
Of course any one can withdraw with your account/routing numbers, but that's fraud and most bank accounts are protected from this and the bank must credit your account within a few days once you file a claim. Then the bank will investigate and make a determination and leave you with the money or transfer the money back if it is found to be a legitimate transaction.
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And until it is all straightened out, someone likely wiped out all you had, leaving you with other hardships, even if they are temporary. It is still probably a good idea to have an account with limited funds that is used for these transactions and move money in/out as necessary to prevent someone from taking an amount that will create a hardship for you. If all your money is in one account - then it can all be taken and maybe even more than you actually have. Electronic payments made when there are insufficient funds are not necessarily automatically rejected just like a check with insufficient funds is not always returned unpaid. You still have the payment taken from your account and do end up paying overdraft charges as determined by banks policies.

Reputable companies will not take funds from your account if they were not authorized to do so. OP has someone he does not know or trust, once they have account information, they can take funds. If they are legitimate they likely will not make a disappearing act, and maybe if they took unauthorized funds it may just be a mistake. Someone that does a disappearing act likely was intending to take you for whatever they can. Even if you get reimbursed somehow it created a hardship.

Same goes for writing a check or using a credit card - once someone has your account info - they have a place to start if they want to try something. Look at fine print details for your account to find what limitations may be for your account in the event fraudulent activity happens, it is not necessarily the same for all accounts or even credit card accounts.
 
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