|
New scam hits bank books
|
 |
September 12, 1996: 5:52 p.m. ET
Thieves find a way to make automatic withdrawals from checking accounts
From Correspondent Sean Callebs
|
NEW YORK (CNNfn) - You've probably heard about credit-card fraud, cellular-phone scams or check forgery.
Now, there's a new scam out there, proving that clever thieves never run out of ideas.
The scam, checking-account fraud, preys mostly on trusting seniors, but also on anyone volunteering confidential banking information.
Here's how it works: criminals obtain enough information about your checking account to issue so-called "demand drafts" -- legal instruments commonly used to make automatic withdrawals for recurring payments such as car loans, mortgages or health-club fees.
Demand drafts don't require a signature, so scam artists can easily conduct unauthorized withdrawals.
"It isn't like giving a blank check -- it's like giving a blank check book, where check upon check can be written from your account," said Mark Shiffrin, Connecticut's commissioner of consumer protection. (QuickTime movie, 371K)
Common formulas for the scam involve telemarketers who get checking information after claiming to offer credit cards or free prizes.
Joanne Ambrose was swindled by her health club by signing a contract not approved by the state of Connecticut.
When Ambrose's membership ran out, her gym kept automatically withdrawing dues.
Ambrose only became aware of the scam when some of her checks bounced.
So what's a consumer to do?
The National Association of Federal Credit Unions offers the following advice:
- Never give your checking-account number to a stranger, especially over the phone.
- Be wary of any offer that asks for your checking-account number. Legitimate companies don't do so.
- Report lost or stolen checks immediately to your local bank so that the institution can stop any unauthorized payments.
- Store canceled checks or carbons in a safe place. If you get new checks, destroy the old ones.
- Guard your ATM receipts and pin numbers, which can unlock your account to thieves.
- Contact your bank about any suspicious withdrawals.
|
|
|
|
|
 |
|
.
