Dedicated to Deposits: Deals, Data, and Discussion

Watch Your Bank Account - the ACH Penny-Deposit Scam

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This Air Force News article describes the case of an Airman who was a victim of a crime that used ACH transfers. The criminals used software to execute one-cent deposits into random account numbers. If the one-cent deposit clears, they know they have a valid account, and then they proceed to make withdrawals. In the case of the Airman, he had over $600 withdrawn from his account.

The good news is that once the Airman contacted the bank manager, they refunded him the stolen funds. However, the Airman wasted a lot of time trying to track down who made the ACH withdrawals. As you would suspect the criminals were able to make the transactions look like they were from a legitimate business. When the Airman finally tracked down that business, he found out that he was not alone. The business had received about 100 calls from other victims.

So the best way to protect yourself is to check your accounts at least once a month. Avoiding online banking won't help since brick-and-mortar bank accounts are no different than online accounts in that they can have the same ACH transfers applied to them.

Regulations require banks to reimburse you for fradulent transactions if you report them in time. So the banks are the ones that have the most to lose, and perhaps that's why many have set up blocks against ACH withdrawals initiated from the outside. Banks that I know of which do this include ING Direct, E-LOAN and recently Emigrant Direct.

A few years ago I had a mysterious two-cent deposit to my credit union money market account. It was labeled as if my insurance company, Humana, had made the deposit. The credit union couldn't provide any more info, and my attempts to track down the source at Humana proved to be a waste of time. Luckily, there were never any unauthorize ACH withdrawals. I ended up closing this account a few months later.

ACH Overview

For those not familiar with ACH it stands for Automated Clearing House and is used to make electronic deposits and withdrawals from bank accounts. Direct Deposit is one example of an ACH deposit. ACH withdrawals are often done to pay for bills. Many online banks allow customers to initiate ACH transfers to and from their accounts at other banks. For more info on ACH, please see this Wikipedia ACH reference.


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Comments
15 Comments.
Comment #1 by Anonymous posted on
Anonymous
It happened to me with a legitimate company, Zecco. They withdrew two small amounts from my bank account without making corresponding deposits.
It took me long time for my bank to reverse the charges.
Zecco has not yet admitted their mistake,

1
Comment #2 by ProfessorB (anonymous) posted on
ProfessorB
That's an interesting scam. It's amazing what methods the scammers use to steal our hard earned money.

1
Comment #3 by Steve (anonymous) posted on
Steve
This is why I like E-loan. You can only withdraw fund from their website and I hope they don't change this...

1
Comment #4 by Anonymous posted on
Anonymous
I have to take this whole story with a big grain of salt. ACH transactions have to be made through a bank. If someone is approved to initiate ACH credits and debits through their bank and tries every possible account number at another bank, they are going to have hundreds or thousands of bounced deposits. If that doesn't set off security warnings at the originating bank, then there is something seriously wrong.

1
Comment #5 by Lance (anonymous) posted on
Lance
I also have some doubts about this scam. Doesn't the originator of the ACH credit or deposit have to know the account AS WELL as the name on the destination account? They can't just "cold call" account numbers and request withdrawals, can they? This doesn't sound right.

1
Comment #6 by Banking Guy (anonymous) posted on
Banking Guy
Looks like they're working on new rules in ACH processing which may help reduce fraud. See this Bank Tech news article for more info.

There also has been other abuses of ACH. The article mentions telemarketers who do improper telephone-based authorizations.

1
Comment #7 by MK (anonymous) posted on
MK
when you write someone a personal check, they automatically get your ABA and checking account number.

Doesn't that expose everyone writing a check to ACH fraud?

1
Comment #8 by Lance (anonymous) posted on
Lance
mk makes a great point. with checks, your name and address is on it as well. sigh.. it's kind of scary.

1
Comment #9 by Banking Guy (anonymous) posted on
Banking Guy
Just found a report from Kentucky's Attorney General about ACH fraud here.

Most of the fraud cases, the victims gave their account numbers, but in a some cases "the bank account numbers were simply obtained and debited without even contacting the victim."

Looks like I'll have to do more investigations into ACH and what protections are in place. As has been mentioned, with checks listing all of the account details, it seems this would make it easy for criminals to access your account. It's probably best to limit check payments to only those who you trust.

1
Comment #10 by Anonymous posted on
Anonymous
It happened to me!! Thankfully I watch my account online like a hawk! I noticed a "one cent deposit" into my checking account from "MOLDOVA COMP" in which I have no interaction with. I called my bank to get information from where this transaction was coming from and they connected it to  "TD BANK NORTH" in Maine. TD BANK gave me a phone number and web address which ofcourse was all BS (Moldova Online Corp. 212-665-3682 and 954-305-9616). I immediately closed my account and reported it to TD BANK fraud department and other authorities! 

4
Comment #11 by Anonymous posted on
Anonymous
BEWARE! Moldova Comp. deposited $0.01 cent into our checking on April 22nd, 2011 as well. It is a bogus company that once accesses your account can somehow withdraw from there as well. I do not know how it is possible for them to do this, but our bank fraud department suggested an account number change. A BIG headache. Why can't Banks protect their customers from fraud like this. Shame on them.

2
Comment #12 by Anonymous posted on
Anonymous
Moldova comp has deposited .01 into my checking account as well. on 4/22/2011. I called my bank, chase, they basicly said they couldn't do anything UNTIL these freaks ripped me off!! They would not block access to my account from this "company". They gave me a trace # and a phone number to TD bank. I called them, they then gave me a number to somewhere else..(305)308-4819, and naturally..it went NOWHERE (a voicemail that has not been set up). Since I have bills scheduled to come out of my chase account in the next few days, I can't just close it..so I guess I just sit and wait to be ripped off. I'm so mad. I can't believe we aren't any better protected than this.

2
Comment #13 by Anonymous posted on
Anonymous
I too received a 0.01 deposit on 4/22/2011 from Moldova Comp.  Contacted bank to discuss.  I think I will just open a new account with them and transfer funds.

1
Comment #14 by Anonymous posted on
Anonymous
This happened to me also. Moldova Comp withdrew .01 on 10/26, I didn't know what it was and didn't think much of it. Then on 11/09 they withdrew $29.95, luckily the bank had a ref/check# that I could see online. It had a phone number I called and they are reimbursing the money. I can't believe people can just access my bank account without authorization.

877-754-7499

877-687-0661

1
Comment #15 by Anonymous posted on
Anonymous
Had the same happen to me. I was charged $29.95, it looked like it was a check over the phone transaction with my name but someone elses address on the check, I called the 800 number and was told it was a sub for an "Adult Website". They assured me I would get the $29.95 credited back to my account. Tonight there is a .01 deposit pending from Moldova Comp, I'm hoping that's going to be my $29.95 credit.

2