Automatic Debit Scams

You get a call from a telemarketer who tells you that you’ve won a cash prize or you qualify for special, very limited credit card. Sound legit? Think again. This call is nothing more than an automatic debit scheme waiting to happen. And depending on your answers to the caller’s questions, you could find yourself in deep financial trouble.  Being able to diagnose the intent of the caller early on in the conversation will prevent you from providing any potentially detrimental information, as well as not wasting your time.

What Is It?

You may or may not be familiar with the phrase, but what exactly is an automatic debit scam? Well, the scam starts out with the above scenario—you get a telephone call promising a cash prize or other tempting offer. Next, the caller will ask if you have a checking account and, if so, for you to list the series of numbers printed on the bottom of one of your checks. All the while, the caller will assure you that the information you provide is for verification purposes only. Once they have the necessary information, the caller will file a demand bank draft, which works like a check, but does not require a signature, allowing them to transfer money from your account to theirs without your knowledge.

What If It Happens to You?

If you feel you are the victim of an automatic debit scam, the first thing to do is call your bank. Your bank should have a fraud line that you can call 24/7. When speaking with your bank, try to recount as many specifics of the incident as possible and emphasize that you did not authorize any transactions. Be sure to tell the representative that you would like to block any such debiting in the future. Also, it is important to report the incident with any credit reporting agencies, as these events can negatively affect your credit score, as well as appropriate law enforcement agencies.  The key is to be as detailed as possible when telling your scenario. If you have a way to identify the fraudulent caller’s phone number, try to write it down immediately and use that as a critical part to your information gathering process.

Protecting Yourself

Automatic debit scams work by misleading you into providing valuable financial information. As such, the best way to protect yourself is to avoid giving anyone your personal financial details over the phone. Don’t be afraid to ask questions of the telemarketer to determine the reason for a telephone call. If you have made arrangements with a company over the phone, remember that the person you speak with must ask explicitly for your authorization to perform the transaction each time. Remember, that if you choose this payment method, you must be provided print confirmation of the transaction before it is performed. If you are even the least bit skeptical, ask for their phone number, check your records, and proceed if it checks out. If the caller is fraudulent, many times they will try to get around giving out their number, which is an immediate red flag. Always err on the side of caution.