Would you reveal your bank details in public?

BMN

grumbler wrote: »

In fact, it's next to impossible to trace the person who sets up a DD to some company.

As I said above, I can imagine a fraudster setting up a charity, then setting small DD payments to this charity from random accounts. Yes, 99% of them will be cancelled, but 1% will slip unnoticed and will keep draining accounts for years.

Not to mention people that can set up fraudulent DDs for fun or revenge.

The system is fundamentally flawed.

It is not "next to impossible" to trace the fraudster at all.
When the victim discovers the direct debit and contacts their bank the amounts will effectively be reversed.
When the company collecting the direct debit become aware of this, they should know exactly who gave them the wrong sort code & account number because that company should have verified that person's identity.

I do agree that the system could be better though. It would be much easier to prevent a DD from being setup without the account holders consent than having to sort out the problem afterwards.

maas

The best way to address the flaw would be to have the customers bank request customer confirmation (over the phone) before setting up the DD.
Then anyone can fill in the form (fraudulently) but it wont be processed until customer confirmation is received.

maas

To be fair I was quite dismissive of the issue at the start of the thread with the DD guarantee but it is an issue.

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Old article

http://www.dailymail.co.uk/news/article-1331040/Fourfold-leap-direct-debit-theft-Victims-failing-check-bank-statements.html

So far this year, an estimated 26,000 victims have found that fraudsters were taking direct debit payments from their accounts.

An average of £540 goes missing before the scam is seen and stopped.

Criminals use stolen bank details to set up direct debits to pay for goods and services they will benefit from, such as mobile phone accounts, pay TV or gym memberships.

Some arrange for payments to accounts from which cash can be siphoned off through ATMs.

Archi_Bald

Who is going to pay for all those extra phone calls / controls / monitoring of calls etc? How many customers will complain about the added complications? What real problem are these extra controls to address? All that has been identified on the MSE forum to date is a theoretical problem.

EDIT: Oh, and a Daily Mail article, lol.

maas

Banks can just make it optional to customers for increased authentication for DD. So if you've been a victim of DD fraud before and the criminals still have your information whats the stop them harvesting more DD against your account in future?

RE the Daily Fail article, the research was done by LV, all the papers picked up the same story, daily mail was just top of the google search results

Archi_Bald

I have made the effort to read the article and I find the following noteworthy:

The figures, from insurance firm LV=, are based on a survey of 2,000 Britons by the Centre for Economics and Business Research think-tank

But BACS – the Bankers’ Automated Clearing Services – which handles direct debit on behalf of banks, said: ‘Instances of direct debit fraud are very low, particularly when compared with methods such as cheque or card.
‘There is no empirical evidence within the industry to show this type of fraud is increasing.

BACS have real figures, LV= commissioned a survey of a small sample of people. Probably in an effort to sell more ID theft insurance or some such product.

grumbler

BMN wrote: »

When the company collecting the direct debit become aware of this, they should know exactly who gave them the wrong sort code & account number because that company should have verified that person's identity.

Firstly, the 'company' in my above scenario doesn't care and isn't under any pressure to investigate anything.
Secondly, DDs for donations can often be set up online without any proper checks (like in J.C. case) and without any trace.

Archi_Bald wrote: »

Who is going to pay for all those extra phone calls / controls / monitoring of calls etc?

In the 21 century this can be easily built into online and telephone banking.

Archi_Bald wrote: »

I seem to remember you said this before. If you are so convinced that something needs to be done about it, you should be going to the banks, the FCA, your MP etc etc to see that it gets changed to a foolproof system proposed by you.

Come on... I know what country I live in. It took decades to change the ridiculous adverse possession law and will take another century to change the law on squatters rights.

You would be the hero of the banks if you can prove they are paying out too much under the DD guarantee and haven't noticed it yet.

I don't care about banks. I care about ordinary people. You know well how easy many companies, even some 'reputable' ones, keep reinstated DDs cancelled by customers. This is yet another result of the same flawed system.

Archi_Bald

grumbler wrote: »

I care about ordinary people. You know well how easy many companies, even some 'reputable' ones, keep reinstated DDs cancelled by customers. This is yet another result of the same flawed system.

If you really did care about ordinary people, and if there were indeed so many ordinary people who fell victim to DD fraud, you'd go and campaign for a change until the change has been delivered. Ranting on the MSE forum will make no difference to how the DD system works. Nor does it create lots of facts about how prevalent the problem is.

I bet you that more people have their houses burgled or their cars broken into than find fraudulent DDs on their bank accounts. Who are we going to blame for this, how are we going to make sure no more house and car burglaries happen?

grumbler

I am not ranting. I am taking part in the discussion started not by me and addressing the opinions that I don't agree with. Anything wrong with this?

And, as I said earlier, IMO if the problem exists it doesn't matter how 'prevalent' it is. What is your threshold? 1/1000? 1/100?

Thieves and burglars get caught and punished (inefficiently and insufficiently IMO). I have not heard of any company punished for reinstating a cancelled DD without authorisation.

mgdavid

And, as has been said time and time again, when discovered through normal account reconciliation it will be reversed and reclaimed by the individual. It is not a problem to the account holder, who is guaranteed to always get the money back.
It *could* be a problem for the banks, who undoubtedly since they exist to make profit, will do something about it once it reaches a scale such that they feel the need to.
Storm in a teacup or mountain out of molehill - choose your own metaphor.