Amazingly Enough, It's Illegal To Let Anyone Write Checks On Any Bank Account Without Verifying Identity

from the seems-to-make-sense dept

It comes as no surprise that a judge has put a halt to an online check company that was a favorite of identity theft and auction scammers everywhere, in that it let them write checks on any account without bothering to do little things like verifying that the person writing the check actually was the owner of the account. It would seem like such things would be obvious if you were providing an online check writing service, but apparently not for this company. Even better, according to the second report above, even when people discovered their accounts had been unfairly used by scammers via this service, it was nearly impossible to reach the company to put a stop to it. "Herculean persistence" tends not to be a phrase you want to hear when it concerns contacting a company that has given access to your bank account to a bunch of scammers. It seems like plenty of people are probably pretty happy that the FTC and a federal judge has agreed to shut this offering down.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    discojohnson, Oct 2nd, 2006 @ 8:46pm

    well...

    A for idea, F for execution.

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    4playR, Oct 2nd, 2006 @ 9:05pm

    Damn!

    Why am i always the lat to know?

     

    reply to this | link to this | view in thread ]

  3.  
    identicon
    4playR, Oct 2nd, 2006 @ 9:05pm

    Damn!

    Why am i always the last to know?

     

    reply to this | link to this | view in thread ]

  4.  
    identicon
    Anonymous Coward, Oct 2nd, 2006 @ 9:15pm

    Re: Damn!

    That was one of the most inconstructive, pointless posts ever.

    It's a shame that it takes a court to change/stop practices like these. Seems as if the company was DESIGNED to facilitate these scams.

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    blurby blurb blurb, Oct 2nd, 2006 @ 9:50pm

    Why they should just tie these guys up by their (gonads) and dip 'em in one of those turkey deep fat fryers! Things would change real quick.

     

    reply to this | link to this | view in thread ]

  6.  
    identicon
    blurby blurb blurb, Oct 2nd, 2006 @ 9:50pm

    i guess that was inconstructive (sic) and pointless, too.

     

    reply to this | link to this | view in thread ]

  7.  
    identicon
    Annoying Bastard, Oct 2nd, 2006 @ 11:16pm

    Yeah...

    I like pouring Catalina dressing on my chicken nuggets.

    MMMMMMmmmmmm.... :-P

    Seriously though,

    I work for a mid-sized "financial services" company.

    The payments industry is in a total state of flux; driven by fast changing regulations, new payment types (ACH, Check21, Pinless Debit), and a truckload of fresh startups that aren't afraid to bend or outright disregard the rules.

    I'm not shocked at all.

    Everyday I have to explain to clients in the collection industry (yes, they're evil :-P ) that just because another vendor will set them up with a credit card merchant account, it doesn't mean that the account is legitimate (it isn't according to Visa and MC underwriting rules). Clients are left feeling that we are denying them service because someone else isn't afraid to take legal risks in their name, on their behalf.

    The electronic payments frontier is still in its wild west phase.

    And as far as the e-mailed checks are concerned; how are they useful without MICR toner? Most banks don't use optical scanners...

     

    reply to this | link to this | view in thread ]

  8.  
    identicon
    Bob Johnson, Oct 3rd, 2006 @ 12:47am

    Paypal

    so when are they going to close down paypal?

     

    reply to this | link to this | view in thread ]


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