Direct Debit Scams – Be Aware

There are a lot of scams out there today that some people may not be aware of. One that can slip right by you if you are not paying attention is the Direct Debit scam. Because they can be as small as 1 cent per account, a multitude of people can be scammed simultaneously to make the scam artist quite a bit over a period of time without being detected. Because we are so used to setting up larger amounts most of us will not expect it and won’t see it coming.

Definition Of A Direct Debit

Direct Debit is a payment system in which creditors are authorized to debit a customer’s bank account directly at regular intervals. There are two types one being the direct debit and the other a standing order. The standing order is a fixed amount while the direct debit can be flexible. These can be helpful in keeping your payments on time and make them worry free. But at the same time, it opens the door yet to another way to be scammed.

The Direct Debit set up amount can be changed but there are some stipulations to it. If a change is to happen the account holder must be notified in writing or through their electronic banking account information. This will help in detecting something isn’t right. Although direct debit makes it easy for us, like many other things the opportunist finds a way to make it benefit his own selfish gain. I just feel the need to make people aware of this scam to put them on alert.

How Can This Be Done?
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It is very simple sadly to say. Most of us have set up a direct debit a least once purchasing something or getting some service plan. We are required to give some information such as your name, bank account number, routing number and address of your bank (which is easily accessible). Sometimes maybe not all of that.  The only thing I didn’t mention is your address. This is what opens the door to for fraudulent activity. There is no way to tie the registrant to the other information the way the system is operated.

Let’s take someone buying a portable hotspot for their laptop computer. They buy their device with cash and they don’t have to show any other proof of identification. When they give the billing information to set up the direct debit, they give your information instead of their own. Once the bank receives this information, they assume that it was a legit transaction and process it. Now your account has been scammed.

Just The Tip Of The Iceberg

It is sad to say that things just are not like they use to be. It used to be hard to pass information through like that without it being matched up completely first. Because of all the electronic methods, these types of things are able to slip by. The Direct Debit system, because of how it is run, really has no way to match up the name to the bank account information. this makes it really crazy because now someone can use any name and address to set up such payments on your account that they manage to steal.

Measures To Taking Against It
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Sometimes it is wise to police your own personal information. Things are not always set up with the consumer in mind. As of right now there is not anything set up to offset these kinds scams. So the best thing is to check your account activities every month making sure there is nothing that you don’t recognize. If there is proceed to have the direct debit cut off. Most of the times the scammer will use smaller amounts which have the tendency to slip by us undetected. So stay alerted and protect your accounts.

Thank you for visiting. I hope I enlightened someone out there that may be a potential victim. Feel free to leave any comments in the comment section up top.

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