How safe is it to quote your bank account details to strangers?
February 22nd, 2007 | 
Author: Many of the B&B and particularly gite owners accept payments by bank transfer to their account. What amazes me is that they never consider that it’s something of a risk to give your bank account details to a complete stranger and even more so when it’s a series of complete strangers.
If you think about this for a while you’ll realise that your bank account details are printed on your cheques but that’s not quite the same as you give cheques to people or organisations that you know. There is a safe way to do this though. Just quote a savings account number and, if you’re really paranoid about it, open a savings account in a bank that you don’t normally deal with.
Every time that I raise this issue, someone quotes their bank manager as having said that it’s perfectly safe to hand out your details in this way and that it’s impossible to take money out using only those details. Haven’t these people even heard of direct debits? After all, a direct debit uses exactly the same information as you quote to receive money. Now, I’m not suggesting that a fraudster is going to set up a direct debit and then withdraw money from your account using it but there are a number of very similar ways to do that. For example, if you care to give me YOUR bank details, I could set up a one-off transfer by simply looking up the address of your bank and faxing them the instructions to do that. You might think that wouldn’t work as they check the signatures, but actually they only check a small percentage of the signatures so it almost certainly would work. Then people say that it must be safe because the electicity company quotes their details for payments so how come someone hasn’t cleaned them out by now? They haven’t because they quote the number of their collection account and collection accounts reject electronic withdrawals.
Since a small business doesn’t have the option of a collection account the safest thing to do is to quote a savings account number as you can’t withdraw money electronically from a savings account.
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As a B&B owner, I am SHOCKED about this! I would never give our bank details out like that and find it amazing that apparently so many do.
I’m actually not surprised that you’re shocked as the danger of these things are so much more known about in America. The French attitude is that it’s “totally impossible” for it to happen which sounds to me like a massive fraud just waiting to happen.
The UK attitude seems to be in between the two with some refusing to believe that it’s possible and others not having known about the possibilities but accepting that it could happen. I raised the issue a year or two back on the Living France forums and even those that refused to believe that it was possible wouldn’t give me their bank account details so I could prove that it could be done which is reassuring.
This is paranoid, really. All cheques, invoices and letterheads have that information. More than that, into your fax fraud scheme a) the fraudster is caught right away and b) the bank is responsible for covering your expenses. The same for direct debit, which is also ensured. – The one thing you need to do is to watch over your account statements to notice these, however.
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It’s not paranoid. The information is on cheques, but you only hand cheques to people you know thus the risk is limited. It is very rarely on invoices or letterheads in my experience but in the cases in which it is, the companies concerned are quoting “collection accounts” which have additional protection in terms of eliminating the possibility of withdrawals directly from those accounts which normal chequing accounts do not have.
I personally have actually carried out (legally!) a variant of one of the fax frauds some years ago. In fact, the money is in the destination account almost always before the account owner is aware that it’s gone (in only one case out of about 1200 did the person discover the money had gone before it had arrived with me). The bank is usually NOT responsible for fax frauds: read the contact you signed when allowing fax authorisations.
Direct debit payments are usually covered but this cover is limited. Having said that, the direct debit system introduces delays which fraudsters would normally wish to avoid thus it is, in principle, safe.
Arnold