Bank Wire Transfer Liability

[Dr. O]

Fun thread. Lots of testosterone and shoving in the boys room.

I have dispensed with banks and gone to Credit Union(s).
At each one I have checked the box that orders them to never allow electronic access to my account. (their programmer sets a flag in the program that blocks electronic transfer)
I cheerfully write checks with all the numbers and my name emblazoned across the front. Let the forgers do their best - the credit union has insurance.
One on account only do I allow electronic access so that the gov't can send me my allowance every month - and only because they refuse to mail a check anymore.
I ran businesses for over 50 years that did six figures a month in cash flow. I managed those businesses with a check book and a credit card. I never had a loss due to theft.
(not for lack of trying on the thieves part - oh lordy, they tried)

My friends and colleagues went all electronic early on (while snickering at the old stick in the mud) They were not laughing when they had losses that were not covered by the banking institution.
There is a lot to be said for the digital revolution. But piling my money up in the middle of the town square with an electronic fence around it that the bank will not insure, is not a reasonable situation.

 

[jesse]

and even if you could, where would you put everything?

Well, since the only things you can buy with a credit card are things on Earth. I would put most of it in space, which shouldn't be a problem, provided the credit card never quits working.

 

[PaulS]

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.

I'm the poster who said banks suck.

I agree with your statement bolded above, and will modify my statement to most banks suck. I've dealt with many banks over the years and most of them suck, this should not be interpreted as meaning the people working in the banks suck, most of them are great people who try to help you out but sometimes they can't due to dumbass rules, some required by regulators some not.

I just went through my latest aggravation with banks trying to implement a POA with a large bank for an elderly relative's accounts. I had gone to a different, smaller, service oriented bank to do the same thing, (ironically this relative has about 3x more money in this bank than the problem bank), at the small bank it was a twenty minute process which when done I was allowed to move $20k to a checking account. This relative is in assisted living now and has the resultant high cash burn rate.

At the large bank the manager looked at me like I was a crook, then told me that they didn't have this relative's signature on file so I was going to have to bring this elderly relative in to sign papers, counter to the POA process, this relative does not want to deal with this BS anymore and it is painful for this person to walk and transfer from cars. I told the manager I've been dealing with banks for 40 years and have never been able to open an account with out providing a signature and that answer was BS. She apologized but told me rules are rules. Fortunately this is a bank I have a very good relationship with so the people I know have bent over backward to find a workaround for me, someone without this relationship would be SOL. It's still not resolved, but will be soon and as soon as it is this relative's money is coming out of this bank. I'd love to take my money out too, but won't at this point because of the people I have the relationship with, but this incident is still in the back of my mind.

The thing is, I did this exact same thing about 2 years ago for another elderly relative, at the same branch, and was in an out of there in about 1 1/2 hours that day.

 

[PaulS]

Also, I'm liking schemes like bitcoin more and more, no need to deal with a bank, huge plus for me.

 

[Everskyward]

Well, since the only things you can buy with a credit card are things on Earth. I would put most of it in space, which shouldn't be a problem, provided the credit card never quits working.

I would make it simpler and just buy up all the land underneath the items I am buying with the credit card...

 

[JoseCuervo]

Also, I'm liking schemes like bitcoin more and more, no need to deal with a bank, huge plus for me.

Bit coin being a solution in a thread about banks not taking liability?

Hmmmm..... Don't think that helps the OP as Bitcoin keeps having their holders scammed.



If you don't like banks, you haven't found the right bank. Bankers, where I live, all have cars, and, if needed, I can pick up the phone and they will be in my office in 30 minutes. There is no need to transfer elderly people from nursing homes to the car.

My biggest problem with bankers is all the time of mine they like to waste with "you are invited to breakfast meetings" and "let's do lunch" type of activities.

 

[jesse]

Bit coin being a solution in a thread about banks not taking liability?

Hmmmm..... Don't think that helps the OP as Bitcoin keeps having their holders scammed.



If you don't like banks, you haven't found the right bank. Bankers, where I live, all have cars, and, if needed, I can pick up the phone and they will be in my office in 30 minutes. There is no need to transfer elderly people from nursing homes to the car.

My biggest problem with bankers is all the time of mine they like to waste with "you are invited to breakfast meetings" and "let's do lunch" type of activities.

If you lose Bitcoin it's your own fault period. Not so with banks.

 

[JoseCuervo]

If you lose Bitcoin it's your own fault period. Not so with banks.

Agreed.

Just thought the OP was about trying to get someone else to take the liability, and Bitcoin is just the opposite, where no one else will take your liability, by design

I don't see the OP being a good candidate for Bitcoin.

 

[Palmpilot]

I never said to go through life never giving the information out. My point is that YOU give it away, not the bank.

What I'm trying to find out is whether there is any way to avoid this.

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.

The trouble with that option is that if I pay my credit card by check or by electronic transfer, then I would still be vulnerable, because credit card issuers can be hacked, and have been.

Maybe using the bank's bill paying service would be a solution.

 

[Palmpilot]

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...

Would regulation E have solved the OP's problem if it had been a personal/family/household purpose account?

 

[Henning]

You can't buy everything with a credit card.

I bought a $3.2 million dollar yacht with a guy's Amex Centurian Card. I bet he could have had Van Halen play his kids Bar Mitzvah with the points from that sale. Even hookers have a Cube on their phone now...

 

[Henning]

What I don't understand is why American banks don't offer online EFT transfers. With my account in Australia, I could transfer funds into any account in the world instantly for $1. Why are we stuck with this high cost option as the only electronic option? Why the hell does Automatic Bill Pay here mean the bank mails a bloody check?

 

[Everskyward]

I bought a $3.2 million dollar yacht with a guy's Amex Centurian Card. I bet he could have had Van Halen play his kids Bar Mitzvah with the points from that sale. Even hookers have a Cube on their phone now...

On the other hand there are many people and small businesses who won't take credit cards.

 

[Henning]

On the other hand there are many people and small businesses who won't take credit cards.

True, but they take cash. Personally I am a proponent of cash. The card problem is the same as the Bitcoin problem, plus the Bitcoin doesn't allow for economic expansion if there are only a set amount issued.

No, there needs to be a physical currency to back the electronic currency, and that currency needs to be backed in an infinitely produceable commodity required by all life as we know it.

 

[Clark1961]

Why the hell does Automatic Bill Pay here mean the bank mails a bloody check?

Each bank is different, Schwab does as much as they can by electronic ACH. Well Fargo not so much.

 

[JoseCuervo]

Each bank is different, Schwab does as much as they can by electronic ACH. Well Fargo not so much.

Schwab will wire money any time you need them to. Just get your instructions in early in the day. I think their cutoff is about 1pm.

 

[Henning]

Schwab will wire money any time you need them to. Just get your instructions in early in the day. I think their cutoff is about 1pm.

Yeah, see, I don't want that. I want to go on the website, enter the info, and complete the transaction, and I want to do it for $1 or less.

 

[JoseCuervo]

On the other hand there are many people and small businesses who won't take credit cards.

The trend is headed the opposite way, I think.

I know a guy that owns a couple of retail stores, and he prefers credit cards, even with the merchant fees.

The "cost" of his employees mis-counting change, plus stealing from the till, plus having to do bank runs after hours for the deposits makes him actually prefer the non-cash route.

He says the trend on his sales goes more and more toward cards.

Nothing worse than someone at the grocery store trying to write a check in the line in front of you.

 

[Everskyward]

True, but they take cash.

I'm not sending cash in the mail. Besides I try not to use cash.

 

[JoseCuervo]

Yeah, see, I don't want that. I want to go on the website, enter the info, and complete the transaction, and I want to do it for $1 or less.

Might need to shop around on banks.

I can go to my personal banks website and transfer money to other non related bank accounts at external banks (and brokerage accounts, including Schwab) without any cost, and it is electronic.

I thought most were that way, now, but don't check on other banks for that service.

(I bet Wells and BofA can do it, but they likely charge for it.).

I am a big fan of medium sized Community. Banks with multiple branches, but small enough somebody local answers when I call.

 

[Henning]

Might need to shop around on banks.

I can go to my personal banks website and transfer money to other non related bank accounts at external banks (and brokerage accounts, including Schwab) without any cost, and it is electronic.

I thought most were that way, now, but don't check on other banks for that service.

(I bet Wells and BofA can do it, but they likely charge for it.).

I am a big fan of medium sized Community. Banks with multiple branches, but small enough somebody local answers when I call.

Wells does not do it, you have a $25 wire transfer which also has destination costs for the recipient, or they will mail a check with a 7 day float since they charge it off immediately and it takes 7 days to deliver (plus any time the check sits beyond that).

 

[Palmpilot]

What I don't understand is why American banks don't offer online EFT transfers. With my account in Australia, I could transfer funds into any account in the world instantly for $1. Why are we stuck with this high cost option as the only electronic option? Why the hell does Automatic Bill Pay here mean the bank mails a bloody check?

Banks and other financial institutions seem to offer EFT that you initiate on the payee's Web site. I've never been charged a fee for this. Of course, you have to enter your bank account number and routing number, so it gets back to the problem of how much do you trust the payee's security processes.

 

[Henning]

Banks and other financial institutions seem to offer EFT that you initiate on the payee's Web site. I've never been charged a fee for this. Of course, you have to enter your bank account number and routing number, so it gets back to the problem of how much do you trust the payee's security processes.

Yeah, sure, but those all charge merchant charges as well. I'm talking going to my account page, entering someone else's account number, and transferring funds.

 

[MtPJimB]

Would regulation E have solved the OP's problem if it had been a personal/family/household purpose account?

Yes, assuming timely notification to the bank within the Reg E timeframes.

 

[RJM62]

Personally, when I get letters like the one OP got, demanding that I waive some right or indemnify some party for some possible liability, I usually cancel my account with whomever sent me the letter. There are very few vendors for whom I can't find replacements.

Rich

 

[PaulS]

True, but they take cash. Personally I am a proponent of cash. The card problem is the same as the Bitcoin problem, plus the Bitcoin doesn't allow for economic expansion if there are only a set amount issued.

No, there needs to be a physical currency to back the electronic currency, and that currency needs to be backed in an infinitely produceable commodity required by all life as we know it.

Actually Bitcoin does expand in it's value as it is mined, don't fully understand the workings, but expansion is not an issue.

Not sure what you mean as far as the card problem. Bitcoin transactions are very safe as long as you don't use one of the "banks" people have set up.

 

[Henning]

Actually Bitcoin does expand in it's value as it is mined, don't fully understand the workings, but expansion is not an issue.

Not sure what you mean as far as the card problem. Bitcoin transactions are very safe as long as you don't use one of the "banks" people have set up.

Card problem = technology & equipment required to process transaction.

 

[PaulS]

I'm confused on some of the posts on this thread. The OP is talking about wire transfers and I think has confirmed that he is not talking about ACH transfers. Wire transfers are supposed to be secure, and one way only. In other words, bank A wires funds to Bank B, Bank A cannot pull that money back after the transaction is completed.

Where as an ACH transaction can be pulled back by the sending bank if there is an issue.

It sounds to me that the OPs bank wants the OP to assume liability if the bank screws up and performs an illegitimately originated wire transfer. I would not agree to that.

 

[iflyvfr]

I'm the poster who said banks suck...I just went through my latest aggravation with banks trying to implement a POA with a large bank for an elderly relative's accounts. I had gone to a different, smaller, service oriented bank to do the same thing, (ironically this relative has about 3x more money in this bank than the problem bank),

Unless your relative has loans, having money in the bank (checking, savings, etc.) generally does the FI little good. They want your liability, not your assets.

Need proof? Look at the rates offered for certificates these days.

 

[iflyvfr]

I'm confused on some of the posts on this thread. The OP is talking about wire transfers and I think has confirmed that he is not talking about ACH transfers. Wire transfers are supposed to be secure, and one way only. In other words, bank A wires funds to Bank B, Bank A cannot pull that money back after the transaction is completed.

Where as an ACH transaction can be pulled back by the sending bank if there is an issue.

It sounds to me that the OPs bank wants the OP to assume liability if the bank screws up and performs an illegitimately originated wire transfer. I would not agree to that.

I seriously doubt that is the motive of the OP's bank. I wonder if they want the customer to bear some of the burden for maintaining the security of his account? The FFIEC and NCUA have been harping to financial institutions about doing more to educate the consumer to take a more active role in online defense.

The hackers are out there big time; they are getting credentials, running brute force attacks, SQL injections, vulnerability scans, phishing emails, and defeating MFA to get into your account, and obviously they are successful often enough to keep on trying.

 

[TheTraveler]

Secure your routing and account number? They are printed in bold in the bottom of every check, why would you need to secure those?

Yeah, this! And in addition, it is normal business practice worldwide to list your account and routing number on your website. Look around for some B2B sites and you'll find it. That way the customer can initiate a wire any day, any time, and not wait for the details.

There is no proof that having your account number and routing number published that it increases the chances of getting scammed. Due diligence is your best friend.