Bank Wire Transfer Liability

Let'sgoflying!

Let'sgoflying!

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Dave Taylor
Do banks have any liability when it comes to unauthorized transfers out of our accounts?

I received an agreement from my bank in which they state they will have no liability if someone is able, without authorization, to take money out of my account via wire transfer. (They want this signed to continue to allow me to use their wt system.)

I had thought it would be like credit cards - someone hacks your card number through no fault of yours and makes purchases, they will reimburse you.

Receiving this agreement I figured there still might be a fall back if someone cleans my account out but then someone I know tells me this happened to them in the summer. A hacker accessed his account and took $16K through no fault of his and the bank told him to pound sand.
 
Always use a separate, stand-alone account for the purpose of wire transfers. When you're going to pay someone with a WT, only put in just enough money up front into the account to cover the intended transfer.
 
Let'sgoflying! said:
Do banks have any liability when it comes to unauthorized transfers out of our accounts?

I received an agreement from my bank in which they state they will have no liability if someone is able, without authorization, to take money out of my account via wire transfer. (They want this signed to continue to allow me to use their wt system.)

I had thought it would be like credit cards - someone hacks your card number through no fault of yours and makes purchases, they will reimburse you.

Receiving this agreement I figured there still might be a fall back if someone cleans my account out but then someone I know tells me this happened to them in the summer. A hacker accessed his account and took $16K through no fault of his and the bank told him to pound sand.
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I "think" it takes a signed release from you and handed to a bank worker to actually have funds removed from your account via wire transfer.. YMMV.
 
The procedures for most banks make wire transfers a bit of a chore. Our's makes us go in and fill out a form, sign it, and then they process it.
 
Let'sgoflying! said:
Do banks have any liability when it comes to unauthorized transfers out of our accounts?

I received an agreement from my bank in which they state they will have no liability if someone is able, without authorization, to take money out of my account via wire transfer. (They want this signed to continue to allow me to use their wt system.)

I had thought it would be like credit cards - someone hacks your card number through no fault of yours and makes purchases, they will reimburse you.

Receiving this agreement I figured there still might be a fall back if someone cleans my account out but then someone I know tells me this happened to them in the summer. A hacker accessed his account and took $16K through no fault of his and the bank told him to pound sand.
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Banks suck, I can't emphasize this enough, they suck. That said, I really don't understand the question. Wire transfers need to be initiated by you. I don't see how someone can hack a wire transfer, unless they impersonate you, in which case the bank should be liable IMO.


What am I missing?
 
These are online transfers, I do them regularly in the course of bidnez.
(I do not have to appear in person.)

Having a separate account will not work. Their attorneys have that covered with another paragraph, 'and if you are overdrawn on one account we reserve the right to take from your other accounts to make up the shortfall'. Ie if the bad guys make a transfer from this empty account, the bank will honor it by taking from my account that has $ in it.

I think I will sign the agreement with a scribbled "Ben Franklin", and continue on. If the worst happens I will sue them for my losses and disclaim knowledge of the agreement.
 
Let'sgoflying! said:
These are online transfers, I do them regularly in the course of bidnez.
(I do not have to appear in person.)

Having a separate account will not work. Their attorneys have that covered with another paragraph, 'and if you are overdrawn on one account we reserve the right to take from your other accounts to make up the shortfall'. Ie if the bad guys make a transfer from this empty account, the bank will honor it by taking from my account that has $ in it.

I think I will sign the agreement with a scribbled "Ben Franklin", and continue on. If the worst happens I will sue them for my losses and disclaim knowledge of the agreement.
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I would check out another bank, some suck less than others.
 
This is very simple. No, they should not be liable. You failing to protect and secure your bank account and routing numbers is not the banks fault or the banks liability. The bank did not and does not give out your account and routing numbers. If someone steals or hacks YOU and takes YOUR numbers, and takes YOUR money, that really has nothing to do with the bank or their procedures. No different than if someone stole your debit card, or the cash out of your wallet.

It sucks. But it isn't their fault or wrongdoing.
 
So if I protect my bank account and routing number from being revealed, I will be safe?
Oh, wait. Both numbers are on every check I ever wrote, as required by my bank.
 
Let'sgoflying! said:
So if I protect my bank account and routing number from being revealed, I will be safe?
Oh, wait. Both numbers are on every check I ever wrote, as required by my bank.
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My grandmother doesn't even write checks anymore. I saw a person do it today. Can't recall the last time I saw it. Seeing the lady write the check was amusing.
 
bartmc said:
My grandmother doesn't even write checks anymore. I saw a person do it today. Can't recall the last time I saw it. Seeing the lady write the check was amusing.
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Call me old fashioned but... I ALWAYS write checks.. wrote 10 today at various places around town...

I do NOT have any online banking accounts set up,,, NONE...

If I need banking help I simply walk in and talk to one of many friends who work there.. Even the owner of the bank has his plane in the hangar next to me..... And his bank was named one of the best in the country by Forbes..

As a old guy, I prefer personal service...:yes:
 
N801BH said:
Call me old fashioned but... I ALWAYS write checks.. wrote 10 today at various places around town...

I do NOT have any online banking accounts set up,,, NONE...

If I need banking help I simply walk in and talk to one of many friends who work there.. Even the owner of the bank has his plane in the hangar next to me..... And his bank was named one of the best in the country by Forbes..

As a old guy, I prefer personal service...:yes:
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If youre OK with the 16 year old 4chan addict cashier at the minimart having your name, routing and bank account number, by all means...

See the OP for why this is a bad idea, banks will assume zero liability when that info is used to skim some cash out if the account.
 
bartmc said:
If youre OK with the 16 year old 4chan addict cashier at the minimart having your name, routing and bank account number, by all means...

See the OP for why this is a bad idea, banks will assume zero liability when that info is used to skim some cash out if the account.
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NO ONE can take money out of my bank accounts without my signature..


The topic is Bank Wire Transfer liability using the internet... No funds can flow out of any of my accounts without me signing the debit instrument. PERIOD...
 
The only way around this is to notify the bank that you want ACH off by default. Automatic bill pay won't work with it off, and you may have to visit the bank to do wire transfers.
 
N801BH said:
NO ONE can take money out of my bank accounts without my signature..


The topic is Bank Wire Transfer liability using the internet... No funds can flow out of any of my accounts without me signing the debit instrument. PERIOD...
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He's talking about wire transfers and AFAIK they don't have anything to do with the internet. They are transfers between banks and they predate the internet by about 100 years.
 
bartmc said:
My grandmother doesn't even write checks anymore. I saw a person do it today. Can't recall the last time I saw it. Seeing the lady write the check was amusing.
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Yes but she did at one point. I wrote 150 checks a month on this account for 22 years. How many checks are out there now? The argument that I must protect the privacy of my account number or I am responsible for losses is a bit weak. And anyone can call the bank and get the ARA (routing) number.
 
N801BH said:
Call me old fashioned but... I ALWAYS write checks.. wrote 10 today at various places around town...
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It was 150 checks a month for me. @20¢ for the check paper, 45¢ postage, 10¢ envelope = $1300/yr or $27000 since starting business; plus printer and ink, labor to produce and process, constant lost checks in the USPS system.

Nah, I'm done with paper checks.
 
The only way around this is to notify the bank that you want ACH off by default. Automatic bill pay won't work with it off, and you may have to visit the bank to do wire transfers.
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Note above where I need and use Online ACH and Online Bill Pay on a daily basis for my business. I need it ON.
The bank and back is a 52mi drive; not physically possible to visit them for all these transactions.
 
He's talking about wire transfers and AFAIK they don't have anything to do with the internet. [/QUOTE

I only do wire transfers online now. It's all internet.
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Let'sgoflying! said:
He's talking about wire transfers and AFAIK they don't have anything to do with the internet. [/QUOTE

I only do wire transfers online now. It's all internet.
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I'm pretty sure that "online wire transfers" are ACH transactions, which are different and can be reversed by the sender bank where a wire transfer cannot be reversed.
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The statement is correct, and if you read the fine print at any other bank, you're going to find the exact same statement. You'll just sign for it somewhere else, and not on the exact same page.

A credit card transaction can be reversed. A check can be stopped or cancelled. Once a wire transfer is gone, that's it...it's gone.

Wire transfers are safe, and I've used them every single day for over the past decade. Domestic, international, whatever. But the point is that if, by chance, someone gained access to your login, passwords, and (if your bank has it) keycode for sending wire transfers and sends one off, it's gone, and it's never coming back because it's considered a "cash" transaction.

If this were to happen, law enforcement still gets involved, tracks it down, and you'll eventually get it back. But the point is it isn't like your check, credit card, or debit card transaction where the bank is going to assume the risk for you and credit your account while all the sorting out is taking place.

Sign it and move on, because you're going to have the same situation at a different bank, just in a different document. If this scares you for some reason, just don't send wire transfers which, regardless to what some say ("I ONLY write checks!", "I NEVER do online banking!"), it is perfectly safe. The only exception is that you must know who you are doing business with...who are you sending money to.
 
Let'sgoflying! said:
He's talking about wire transfers and AFAIK they don't have anything to do with the internet. [/QUOTE

I only do wire transfers online now. It's all internet.
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You are initiating wire transfers over the internet. The actual wire transfer may or may not use some portion of the internet, but wire transfers themselves have been around as long as the telegraph, hence "wire transfer".

You can still walk down to the bank, do the transfer like we do, and be assured that nothing will be hacked.
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We have a specific account for incoming wire transfers, NO outgoing transfers are allowed. We actually had a guy that was supposed to wire us a deposit on a vehicle try to use our account to pay his electric bill! :nono:
Our bank requires an in person signature, some will take faxes. I have a friend that had his personal account compromised and the thieves were about to wire out a LOT of money. He happened to be at the bank before the wire was completed, and one of the bank people told him his transfer would be completed after lunch!!:yikes: He stopped it of course, but it could have been UGLY:hairraise:
 
Funny story about wire transfers. We have a good customer in Mexico that pays by wire transfer. They accidentally wired us $44,000 that was supposed to be sent to another supplier in New York. We sent the $44k back to them, but not before they went through a lot of drama and teeth gnashing. The Mexican customer told the New York vendor that we received the wire transfer, the New York vendor wanted us to transfer the funds to them, we declined and sent the money back to Mexico. We just wanted to make sure we'd get reimbursed for for the additional wire transfer fee of sending it back and that this wasn't some kind of bizarre scam.
 
Pedals2Paddles said:
This is very simple. No, they should not be liable. You failing to protect and secure your bank account and routing numbers is not the banks fault or the banks liability. The bank did not and does not give out your account and routing numbers.
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It's not like they're super secure/confidential numbers. They're on the front of every check you give to complete strangers.
 
Right. But the bank didn't give your check to someone who copied the numbers. You did. Not the bank's wrongdoing.


<< Sent from my mobile device at 0agl >>
 
Pedals2Paddles said:
Right. But the bank didn't give your check to someone who copied the numbers. You did. Not the bank's wrongdoing.


<< Sent from my mobile device at 0agl >>
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But....

The bank has to act with "due diligence" when giving out your funds....

I know, with my bank, if someone gets the routing and account number and walks up to a teller with a forged document... Two things will happen,, The teller will call for a supervisor and no one gets cash till I am called, and the police are not far behind me...;)
 
It's not like they're super secure/confidential numbers. They're on the front of every check you give to complete strangers.
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Exactly.

The bank did not and does not give out your account and routing numbers.
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Actually, they will give them out to anyone who calls asking for it.
And, you can find many of them online:

https://www.wellsfargo.com/help/routing-number/
https://www.chase.com/checking/checking-account-routing-numbers
https://www.bankofamerica.com/deposits/manage/faq-routing-numbers.go
 
PaulS said:
I'm pretty sure that "online wire transfers" are ACH transactions, which are different and can be reversed by the sender bank where a wire transfer cannot be reversed.
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Depends. I have used both varieties. "Online" is just an interface.
 
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I use Citi Bank and they issue a digital key that needs to be used to access your account online. It's not possible to gain access without it to the said account.
 
What type of security measures does your bank have in place to protect the wire transfer process?


Sent from my iPhone using Tapatalk
 
What type of security measures does your bank have in place to protect the wire transfer process?
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They will never reveal all that they use but I know of;
username & password access
something called Trusteer Rapport
an electronic code generator device distributed to me which I store securely

Does any of this mean "someone purporting to me" (from the agreement) could never hack my account? I think even the bank does not believe this, because they still want me to assume all liability if their systems fail.
 
Pedals2Paddles said:
This is very simple. No, they should not be liable. You failing to protect and secure your bank account and routing numbers is not the banks fault or the banks liability. The bank did not and does not give out your account and routing numbers. If someone steals or hacks YOU and takes YOUR numbers, and takes YOUR money, that really has nothing to do with the bank or their procedures. No different than if someone stole your debit card, or the cash out of your wallet.

It sucks. But it isn't their fault or wrongdoing.
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Secure your routing and account number? They are printed in bold in the bottom of every check, why would you need to secure those?:dunno:
 
I'm a bank compliance officer. My job is to make sure my bank follows all the regulations it's subject to. A couple of questions to OP. First, is this a business purpose account or personal/family/household purpose account? Makes a difference because Reg E provides protections for liability for personal/family/household accounts that don't apply to business accounts. Second, does your bank have any type of controls for internet-initiated wire transfer requests such as a call back to a phone number you've provided? If yes, did they follow those procedures? If they had them and didn't follow them, there could be some liability on the bank's part. If you like, feel free to PM me and I can talk more with you.

To the poster who says banks suck, that's a pretty broad generalization. I like to think that not all banks suck, as has been my experience in working in community banking, that most community bankers are decent, honest, hard-working individuals.
 
N801BH said:
Call me old fashioned but... I ALWAYS write checks.. wrote 10 today at various places around town...

I do NOT have any online banking accounts set up,,, NONE...

If I need banking help I simply walk in and talk to one of many friends who work there.. Even the owner of the bank has his plane in the hangar next to me..... And his bank was named one of the best in the country by Forbes..

As a old guy, I prefer personal service...:yes:
Click to expand...


Writing checks all day lol


Sent from my iPhone using Tapatalk
 
Pedals2Paddles said:
This is very simple. No, they should not be liable. You failing to protect and secure your bank account and routing numbers is not the banks fault or the banks liability. The bank did not and does not give out your account and routing numbers. If someone steals or hacks YOU and takes YOUR numbers, and takes YOUR money, that really has nothing to do with the bank or their procedures. No different than if someone stole your debit card, or the cash out of your wallet.

It sucks. But it isn't their fault or wrongdoing.
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How do you pay your bills without someone gaining access to your account and routing numbers?
 
is this a business purpose account or personal/family/household purpose account?
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biz
Let'sgoflying! said:
These are online transfers, I do them regularly in the course of my bidnez.
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does your bank have any type of controls for internet-initiated wire transfer requests such as a call back to a phone number you've provided?
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they used to phone; stopped since using the code generator

If yes, did they follow those procedures?
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they have followed them. However this thread is about their contract in which they wish me to sign on to all liability in the event someone hacks my account.
 
Palmpilot said:
How do you pay your bills without someone gaining access to your account and routing numbers?
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I never said to go through life never giving the information out. My point is that YOU give it away, not the bank. Someone stole the information from you, or from someone you gave it to for an otherwise legit reason. In any case, the bank did not just give your information out.

This is why I buy everything with a credit card.
 
Pedals2Paddles said:
I never said to go through life never giving the information out. My point is that YOU give it away, not the bank. Someone stole the information from you, or from someone you gave it to for an otherwise legit reason. In any case, the bank did not just give your information out.

This is why I buy everything with a credit card.
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You can't buy everything with a credit card.
 
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