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.

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

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Annoying Bastard (user link) says:


I like pouring Catalina dressing on my chicken nuggets.

MMMMMMmmmmmm…. 😛

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 😛 ) 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…

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