NY Payroll Company Vanishes with $35M • Hacker News Board

Re: NY Payroll Company Vanishes with $35M

#51

Post by dsfyu404ed » Wed, Sep 11, 2019, 6:23 PM UTC

isostatic wrote: post #43

harryh wrote: post #30

Earlier quoted context omitted.

This is not correct. If you find a bag of money (or, much more common: a wallet) and you can identify the owner you are obligated to return it. Not doing so is a crime. As it should be.

California Civil Code section 2080.1 for example "the person saving or finding the property shall, if the property is of the value of one hundred dollars ($100) or more, within a reasonable time turn the property over to the police department of the city" https://codes.findlaw.com/ca/civil-code/civ-sect-2080-1.html

I'm sure that'll make for some great "well we can't get them on anything else" prosecutions in a few decades as inflation works its magic. Hard coding dollar amounts into law is beyond stupid. At least it's a civil infraction so you should only get a fine in most cases. (I'm making the charitable assumption that having the amount decrease over time was not intended).

Re: NY Payroll Company Vanishes with $35M

#52

Post by notyourday » Wed, Sep 11, 2019, 6:24 PM UTC

ThrustVectoring wrote: post #50

notyourday wrote: post #22

Earlier quoted context omitted.

Overdraft fees caused by fraud will probably be reversed. I have never heard of it not happening -- it would be a terrible PR for a bank that allowed for it. It will simply take time.

It ought to be a regulatory incident, not just bad PR.

I'm sure it will be, but bad PR triggers resolution much faster than OCC.

Re: NY Payroll Company Vanishes with $35M

#53

Post by ThrustVectoring » Wed, Sep 11, 2019, 6:24 PM UTC

notyourday wrote: post #21

DoofusOfDeath wrote: post #2

Is it possible to protect one's direct-deposit wages from (unjustified) ACH reversals, by transferring funds into a different account ASAP after the deposit occurs? I.e., by maintaining an account that serves only as a temporary inbox for direct deposit?

Yes, it is a little bit of a pain in the neck however. Basically you are going to implement your own ZBA with a positive pay ( while some form of a PP may be available to non-business accounts I have never heard of a ZBA + PP combination ). You will probably need to chat with the branch manager in a midsized/regional/community bank as everyone else would look at you as if you had two heads. The good security policy i…

Wouldn't getting physical paychecks instead of direct deposit also work for protecting your account number while receiving payments?

Re: NY Payroll Company Vanishes with $35M

#54

Post by orf » Wed, Sep 11, 2019, 6:25 PM UTC

What form of financial network allows a random company to take money from people without any authorization or interaction on their part?

If the employees had somehow set up whatever the USA calls a direct debit, then sure, I can see a reason for this to happen. But through mistake or malice they are still able to dip into peoples account - that's the real issue here, surely?

Re: NY Payroll Company Vanishes with $35M

#55

Post by [deleted] » Wed, Sep 11, 2019, 6:26 PM UTC

soneil wrote: post #9

This does seem like a nightmare scenario for the vast majority (4 in 5?) of Americans who live cheque-to-cheque. Your pay is yanked, life doesn't stop and the bills keep coming. A few days, a week later, it's corrected and the pay reappears. Who's on the hook for your overdraft fees?

[deleted]

Re: NY Payroll Company Vanishes with $35M

#56

Post by kevin_b_er » Wed, Sep 11, 2019, 6:29 PM UTC

soneil wrote: post #9

This does seem like a nightmare scenario for the vast majority (4 in 5?) of Americans who live cheque-to-cheque. Your pay is yanked, life doesn't stop and the bills keep coming. A few days, a week later, it's corrected and the pay reappears. Who's on the hook for your overdraft fees?

More than that. They didn't get paid and instead they got a WITHDRAWAL against their account for their paycheck, twice.

Not only did they not get paid, they got the equivalent amount of their paycheck stolen from them twice over. The larcenous criminals should be the ones to pay back the overdraft fees that were the direct result of their larceny of 4 figure dollar amounts stolen from their accounts.

Re: NY Payroll Company Vanishes with $35M

#57

Post by ska » Wed, Sep 11, 2019, 6:38 PM UTC

antaviana wrote: post #18

In the US anyone with your bank account number can debit your account irreversibly? In Europe (with SEPA Core) we have 8 weeks to reject any debit even if the entity issuing the debit has a signed mandate to debit the account.

There are (broadly) similar guarantees in the US. So they will get the money back, at least eventually. The problem is the effect it has when the account has sometimes been debited 2x. If this has made, say your rent or car payment bounce, you have an big hassle at minimum.

Re: NY Payroll Company Vanishes with $35M

#58

Post by dfcowell » Wed, Sep 11, 2019, 6:40 PM UTC

october_sky wrote: post #46

patio11 wrote: post #32

Since this is sort of my beat: If this ever happens to you, immediately call bank, say “Electronic transaction posted in error.”, specifically identify the transaction, and ask what address the bank takes Regulation E written complaints at. If the CSR doesn’t know that answer, their supervisor does, or in the alternative FedEx HQ addressed to chief counsel or head of compliance. The letter just needs to state transac…

Hey Patrick, I'm surprised to see "this is sort of [your] beat". Do transactions like this happen to you often? What sort of speed-to-recovery do you see when you take this approach?

The guy works for Stripe. I’d say as a company they’re pretty savvy about banking regulations in general, and transaction disputes specifically.

Re: NY Payroll Company Vanishes with $35M

#59

Post by runako » Wed, Sep 11, 2019, 6:41 PM UTC

notyourday wrote: post #21

DoofusOfDeath wrote: post #2

Is it possible to protect one's direct-deposit wages from (unjustified) ACH reversals, by transferring funds into a different account ASAP after the deposit occurs? I.e., by maintaining an account that serves only as a temporary inbox for direct deposit?

Yes, it is a little bit of a pain in the neck however. Basically you are going to implement your own ZBA with a positive pay ( while some form of a PP may be available to non-business accounts I have never heard of a ZBA + PP combination ). You will probably need to chat with the branch manager in a midsized/regional/community bank as everyone else would look at you as if you had two heads. The good security policy i…

Thanks for this overview! I've been using parts of this flow for a few years, but it's not 100% automated where it could be.

Do you have suggestions for banks that make it easy to implement this workflow?

Re: NY Payroll Company Vanishes with $35M

#60

Post by throw7 » Wed, Sep 11, 2019, 6:46 PM UTC

Shades of office space! I'm calling it... the crack coder screwed up the instructions files! Instead of redirecting fractional pennies from each employee to his pioneer bank account, he redirected the whole shebang! boom! ruh ohh!