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What Happens When You ACH a Dead Person?

moderntreasury.com

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Re: What Happens When You ACH a Dead Person?

#191

Post by NoInputSignal »

itcrowd wrote: post #12

This reminds me of a question I've had for the longest time (+): why is it that in the US wiring money between accounts is so expensive or difficult? Whole ecosystems of companies have sprung up (PayPal and Stripe come to mind, and apps such as TransferWise) to reduce the friction when the banks could easily set up a way cheaper system that would actually be better (privacy etc.) for the consumer. The EU seems to be…

Disclosure: I work for financial institution in the US.

I think that the nature of wire transfers makes them somewhat risky. The institutions facilitating the transfers assume some of that risk for their consumers. If a large some of money is moved from your account to someone else's, and you dispute the transfer, the institution sending the wire may have to refund you the money.

The cost of a single transfer offsets the risk of the aggregation of fraudulent transfers. This could be a calculation of volume, fraud rates, average amount transferred on that channel, etc.

This is all in addition to network costs as payment processors (third party inbetween financial institutions)

So, fees = portion of network cost + risk offset

Hope this sheds a little light.

Re: What Happens When You ACH a Dead Person?

#192

Post by w1nst0nsm1th »

dmurray wrote: post #156
Tuna-Fish wrote: post #147

Earlier quoted context omitted.

What I don't really get is why American payment systems insist on including some way to pull money out of an account, which therefore requires massive amounts of trust. The way the European system works is that there is one possible operation; the owner of an account can move money from their account to any other account. If you want me to pay you rent, you provide me with a standard format bill, which includes your…

> The way the European system works is that there is one possible operation; the owner of an account can move money from their account to any other account. This isn't true at all. The direct debit system allows any participant to withdraw money from your account, providing just your account number and a claim that you authorised them to do that. You never have to directly tell the bank anything, and in many cases yo…

You're required an ID card (in most country in europe, a digital id) to prove your are the owner of the bank account and in case of a procuration, you still have to prove you id and you need the procuration itself which contains reference of id card of the account owner and other details.

You could theorically withdraw money from an account by faking the procuration, providing you know the id details of the account owner, but you are still required to present your id card which contains a digital photo of you to prove you are who you pretent to be.

Fake id are maybe common in the us thanks to your broken SSN system but in europe, digital id cards are centralised from the moment you're registered as human being at your birth and banks have access to that system when they check your id.

Any attempts to withdraw money from your account leave a trace, and in case of fraud, you would be quickly with the cops on your trail.

Re: What Happens When You ACH a Dead Person?

#193

Post by falsedan »

emiliobumachar wrote: post #141
falsedan wrote: post #135

Earlier quoted context omitted.

Like, to pay for something remotely? I’ve emailed a picture of the check to sellers who refuse to use PayPal and then they use their bank’s online deposit system to drop it into their account (a couple of times for second-hand board games).

Thanks for the reply. But, that sounded very unsecure. What happens if a third party cashes it first, you say you didn't share the picture, the merchant says they didn't share the picture?

You’re stuffed, you’re supposed to only exchange the physical instrument so you’d be liable for fraud.

Re: What Happens When You ACH a Dead Person?

#194

Post by 6nf »

reaperducer wrote: post #51
grecy wrote: post #15

Earlier quoted context omitted.

Moving from Australia to Canada/US felt like going back in time 20 years when it came to banking. Even ten years ago in Australia I could do more with my online banking than I can today in North America. Checks are for what now?

Checks are for what now? For me this week: Paid for a city license, paid the cat sitter, paid for a small magazine subscription, made a charitable donation, and paid the rent. The cat sitter and the charity were check only. No other option. The magazine has a PayPal option, but I don't trust PayPal. The city license could have been done with a card online, but I'm not interested in setting up yet another account with…

I'm 40 years old in Australia and I have never had to use a cheque in my entire life.

Re: What Happens When You ACH a Dead Person?

#195

Post by Symbiote »

w1nst0nsm1th wrote: post #192
dmurray wrote: post #156

Earlier quoted context omitted.

> The way the European system works is that there is one possible operation; the owner of an account can move money from their account to any other account. This isn't true at all. The direct debit system allows any participant to withdraw money from your account, providing just your account number and a claim that you authorised them to do that. You never have to directly tell the bank anything, and in many cases yo…

You're required an ID card (in most country in europe, a digital id) to prove your are the owner of the bank account and in case of a procuration, you still have to prove you id and you need the procuration itself which contains reference of id card of the account owner and other details. You could theorically withdraw money from an account by faking the procuration, providing you know the id details of the account o…

Don't generalize all of Europe (or the European Economic Area) unless you are confident that you are correct.

The UK and Denmark don't have identity cards. At least in those countries, there is occasional fraud. The banks will fix it (at least in the case you describe), but it can happen.

Re: What Happens When You ACH a Dead Person?

#196

Post by Symbiote »

mattmcknight wrote: post #182
Symbiote wrote: post #118

Earlier quoted context omitted.

I'm guessing, but I think most people probably give the electric company permission to pull the money from their account (direct debit) rather than reviewing the bill and "pushing" the money every time. There are very strong guarantees in the individual's favour if the company makes a mistake.

Yes, having them control the amount and timing of the transfer is exactly what I am trying to avoid. I can easily set up direct debit, but it has led to too many erroneous and poorly timed withdrawals.

In the UK, larger companies usually allowed a choice of the date the payment went out. (After all, they'd rather not deal with failed payments.)

I keep enough money in my accounts (partly because of this) that I don't really care about it, but I'd be surprised if they don't use the preferred date.

Re: What Happens When You ACH a Dead Person?

#197

Post by Symbiote »

mattmcknight wrote: post #180
itcrowd wrote: post #71

Earlier quoted context omitted.

Yes, I pay all my bills by bank transfer (house, electric, internet, settlements with friends etc). It's the most common payment method here (I'm in Europe). PayPal et al are barely used here because the bank transfer system is free and frictionless.

So the electric company gives you their account number to use?

Yes, as an example here's a major British energy company:

> Our bank details are: > Bank account number - 99183129 > Sort code - 57-40-99

https://sse.co.uk/help/bills-and-paying/how-to-pay-your-ener...

This company is easily large enough that their bank details are already listed in online banking systems. You can choose "Pay a bill", then select "Southern Energy" rather than type in those account details.

Re: What Happens When You ACH a Dead Person?

#198

Post by patio11 »

js2 wrote: post #181
patio11 wrote: post #173

Earlier quoted context omitted.

If you don’t get the money you’ll call up Citibank again to complain and they’ll take the hit to their operational losses budget [0], which happens infrequently as a percentage of transactions but quite frequently over the totality of the system. That’s what the budget is for. [0] Contingent on the transaction going through and not being reversible, which can happen for many reasons (staleness by the time you report…

> If you don’t get the money you’ll call up Citibank again to complain I hope not. You can't imagine how annoying it is to get them on the phone. Well actually, you of all people probably know exactly how annoying it is. But I'll recap it anyway. First, when you login to the web site to access your closed account to check the statement, the 1-800 number displayed is for card activation only. Go to main web site, dig…

Are they required at any point to send me a check?

They're required to do what they promised to do in your Deposit Account Agreement and/or are required to do by state law. In some states if you take no action to recover it they will be required to "escheat" the money to the safekeeping of the state treasurer to await your eventual claim for it.

Re: What Happens When You ACH a Dead Person?

#199

Post by toomanybeersies »

reaperducer wrote: post #51
grecy wrote: post #15

Earlier quoted context omitted.

Moving from Australia to Canada/US felt like going back in time 20 years when it came to banking. Even ten years ago in Australia I could do more with my online banking than I can today in North America. Checks are for what now?

Checks are for what now? For me this week: Paid for a city license, paid the cat sitter, paid for a small magazine subscription, made a charitable donation, and paid the rent. The cat sitter and the charity were check only. No other option. The magazine has a PayPal option, but I don't trust PayPal. The city license could have been done with a card online, but I'm not interested in setting up yet another account with…

In Australia, all of those could be simply done with an online bank transfer instead of a cheque.

Functionally it's the same thing, except that instead of writing on a piece of paper that you're giving the bank authority to withdraw your funds, you're doing it online. It takes less time, it's more reliable, and you get even better record keeping, as you can enter notes when you make the transfer.

Re: What Happens When You ACH a Dead Person?

#200

Post by toomanybeersies »

NoInputSignal wrote: post #191
itcrowd wrote: post #12

This reminds me of a question I've had for the longest time (+): why is it that in the US wiring money between accounts is so expensive or difficult? Whole ecosystems of companies have sprung up (PayPal and Stripe come to mind, and apps such as TransferWise) to reduce the friction when the banks could easily set up a way cheaper system that would actually be better (privacy etc.) for the consumer. The EU seems to be…

Disclosure: I work for financial institution in the US. I think that the nature of wire transfers makes them somewhat risky. The institutions facilitating the transfers assume some of that risk for their consumers. If a large some of money is moved from your account to someone else's, and you dispute the transfer, the institution sending the wire may have to refund you the money. The cost of a single transfer offsets…

I don't see how cheques (or credit cards) are any different in this regard.

Cheques can be forged, just as easy, if not easier than a wire transfer.

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