Benefits Of Having Two Bank Accounts As A Deterrent To Bank Fraud And Identity Theft
Benefits of having two bank accounts as a deterrent to bank fraud and identity theft
Though it may not seem realistic on the surface, having two bank accounts can help protect you against theft, if you need to give out your details for a wire transfer or write a lot of checks.
In 2009, I was the victim of identity theft and bank fraud that totaled to about $20,000. What happened is that a person or persons had set up a fake account on my behalf on the popular job web site called Monster.com They then went about sending out checks to various people for some very large sums of money, from $800 to $4,000.
All they needed to be able to do this was to get the routing number and bank account number of my bank account. Guess what is printed on every one of your standard checks? That is correct – both the routing number and bank account number are right there for anyone to copy. In addition, you can pick up printable blank checks from any office supply store and simply add the information to the blank check and print it yourself.
Even though they did not have my correct address and the signature was nothing close to mine – my bank still allowed people to get away with cashing these checks. In the end, I got my money back, but I had to fly all the way from Asia to California to meet with my bank. I also had to fill out a headaches worth of paperwork and meet with bank managers who tried to figure it all out – naturally they got it all mixed up and this caused me to waste more of my time, fill out more paperwork and have more headaches.
By the banks orders, I had to close down my account and open a new account. Therefore, the first lesson you can learn is to ask your bank in advance, what they will or can do in the event of such a situation. But don’t believe what they say, get it all in writing. Another step to take would be to open two accounts.
Open one account and use it as a cash in only account. This account could be a passbook savings account where you don’t write any checks or let any money go out of this account except online transfers to savings or accounts that are related or connected to this account. It will be safe for you to give out the bank information in this case. And always remember to look for a good savings and checking account promotion, and also good checking and passbook savings account rates.
Then you have another account for cash out that you control. You only give out the bank details of the first account for accepting wire transfers, deposits etc. However, if someone steals your bank details they will not be able to take any money out. It isn’t foolproof, but it is a step forward and in my case it was the only option as my bank wasn’t smart enough to figure out how to protect me. The real solution would be to find a bank that will solve this problem in the first place.
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