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In addition to this “phantom debt” scam, there is the “automatic debit scam” you need to be wary of. Automatic debiting from your checking account can be a useful financial tool but is now being used by fraudulent telemarketers. If you get a call from someone asking for the number of your checking account or any other information on your check, treat it the same way you would for information about your credit card. Just say no.
How this scam works
The way this works is that you receive a telephone call notifying you that you’ve won a nice prize or that you qualify for a special credit card. The telemarketer will ask whether or not you have a checking account. If you answer yes, he will go on to “sell” the offer that will sound too good to not take advantage of. Towards the end of the call the telemarketer will ask you to read out all the numbers at the bottom of one of your checks. He may or may not tell you why he requires this information. If you provide the numbers, the telemarketer can then do what’s called a “demand draft” that’s processed much the same as a check but does not require a signature. When your bank gets this draft, it will pay the telemarketer’s bank just as if it was a check – and you’re out of luck.
How to protect yourself
You want to make sure you protect yourself from financial losses to an automatic debit scams. Here's what you could do to protect yourself.
Unless you know the company and understand why it needs your information, don't give out your checking account number to anyone you don’t know personally or with whom you don’t already have a financial relationship.
In the event a person says they are taping the telephone call, ask why. And don't be afraid to ask questions.
As a general rule, companies will not ask for your bank account information unless you have specifically said that you will use this method of payment.
There was a law passed in 1995 that a telemarketer or seller must obtain your verifiable authorization in order to get paid from your checking account. What this means is that if a person gets your account information via the phone he or she must have your specific permission to debit your account. There are three ways this can be done. First, the caller must tell you that it will be taking money from your bank account. If you have authorized the payment from your account, they must get your authorization in writing, record it or send you confirmation in writing before debiting your account.
Just be careful
As the old saying goes, being forewarned means being forearmed. Now that you’ve been warned, you’re forearmed and should be able to avoid either of these scams.
Finally, here’s a vido with some good advice that could help you avoid debit card fraud.