Automatic Bank Withdrawal Fraud Prevention Guide

Automatic bank withdrawal fraud

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Automatic Bank Withdrawal Fraud Prevention

Automatic bank withdrawal fraud prevention first attracted my attention because of an unpleasant personal experience.  I had purchased a 1 month limited run of banner advertising from a well known online directory for $99.00.  The advertising was totally ineffective.  I was ready to chalk it up as a loss and move on to an unrelated plan “B”.   A routine electronic check of my bank account turned up a second withdrawal by the same company.  Emails between us had been very detailed that this was a 1 shot limited test run.  My emails of outrage were ignored.  Persistence paid off with a refund.  Let me show you how to win in your battle with automatic bank withdrawal fraud.  Before we begin I will say without reservations that a lot of these problems can be avoided by using credit cards whenever possible for online payments.  There are many more protections with credit cards than there are with bank withdrawals.

Automated Clearing House (ACH) Both Friend and Enemy

The initials ACH you see on your bank statement stand for “Automated Clearing House.”  On the plus side this is the system that permits you to be paid your salary or pension automatically without the same fees that have to be paid for credit cards or checks.  Unfortunately this ease of convenience has a trade off.  Any business that has your bank account number can tell your bank to just pay them.  Diligence in monitoring your bank account and swift action can save you from a painful loss from automatic bank withdrawal fraud.

Electronic Funds Transfer Act Protects Against Automatic Bank Withdrawal Fraud

As long as you tell the bank about the problem within 60 days of it appearing on your bank statement the bank has to return your stolen money. If you don’t recognize the company that took your money don’t get upset.  Your bank knows where the money went. Notify them by telephone followed by a personal visit.  Follow this up with a letter. Your bank can give you the name, address, phone number, bank and account number of the scammer.  Once you have this information write a letter stating:

“I hereby revoke any authority you may think you have to withdraw money from my bank account.  This withdrawal and any further attempt will be regarded as theft. I will proceed accordingly to the full measure of the law under the Electronic Funds Transfer Act. Complaints are being forwarded to the Federal Reserve Board (Regulatory overseer of ACHs), the FTC and the Consumer Financial Protection Bureau.”

Now go to your local police department and file a police report.  Don’t expect the local police to actually do anything about this but you should now bring a copy of the police report to your bank.  Send a copy to the offender as well.  If you need to follow up with the federal agencies a copy of the police report can be included with your letter.

Putting a temporary general block on any automatic withdrawals for a period of time is a drastic solution.  My experience has been that banks don’t like to do this.  Discuss such a move carefully with your bank manager before trying this.

An Ounce of Prevention….

is worth a pound of cure as our grandmother’s used to say.  Wouldn’t it be better if this had never happened in the first place?  Automatic bank withdrawal fraud prevention starts with some common sense precautions:

  • Review your bank statements regularly.  Don’t just wait for the written statements.  Check it electronically on a regular basis.
  • Use a credit card when internet shopping or dealing with unfamiliar companies.
  • Never give bank account information out over the telephone.
  • Shred and destroy all documents with sensitive information
Dealing with automatic bank withdrawal fraud is upsetting but diligent action will win out




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After practicing law for 37 years Edward F. St. Onge, Sr. now devotes all his time to helping consumers achieve a high credit score with amazing speed. Learn the counter-intuitive secrets to credit scoring through his down to earth instructions backed by extensive knowledge of the laws and trends. All of the latest tricks and techniques that they don't want you to know now at your disposal. At last a level playing field for the consumer!

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