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I am managing the utility of the house I am sharing with another person. He asks me to provide my bank account number, so that he can transfer his money to my account when paying the utility.

  1. I wonder if it is safe to give out my bank account number?

    For example, if I am correct, many online payment just needs the account number to draw money out of it.

  2. Is giving out bank account number safer than handing a check to another person, since there are also account number printed on the check?

Thanks!

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>many online payment just needs the account number to draw money out of it. Well, you do need to "sign" a piece of paper that says something to the effect that you have authorized John Doe to make withdrawals from your bank account before a bank will let John Doe withdraw any money from your account. But if you believe that an account number is all that is needed, you should not be writing checks to anybody at all since all that someone needs is your account number which is printed on all your checks. For online stuff, the authorization might be hidden in the fine print you Accept ed. –  Dilip Sarwate May 27 '12 at 19:56
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This is something I found very different in north america compared to (central?) europe. Maybe your house-mate comes from another country where the banking works differently and handing over account numbers is perfectly normal - see my answer about an example. –  cbeleites May 29 '12 at 14:23
    
I don't understand why banks have not taken steps to improve security in this respect. Surely it isn't difficult to request the bank to generate a one-time-use code that expires by a fixed date and has a capped transaction. The code can then be used to receive funds but not send funds. –  Pacerier Jun 26 '13 at 8:56
    
Can you accept an answer for this? I think JohnFx's answer is pretty good. –  Geoff Dec 11 '13 at 21:57

2 Answers 2

Technically, no. There is very little security in the US for bank drafts. With your bank account routing number it is very easy for people to draw funds without your authorization. Another thing people can do is buy stuff online with "demand drafts". Essentially it works like a credit card number where the create an electronic version of a check to purchase things. There is generally no password, PIN or signature requirement.

That said, it is printed on every check you write so keeping it private isn't really practical. I'd make sure you trust anyone you give it to and watch your account statements closely.

An important thing to know is that a routing number isn't a one-way deal. If you give out the number for someone to wire you money, they can just as easily draft on the account.

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Thanks! I wonder how to understand the last paragraph: "a routing number isn't a one-way deal. If you give out the number for someone to wire you money, they can just as easily draft on the account."? (1) Specifically, what do "wire your money" and "draft on the account" mean? (2) By "one-way deal", what did you try to mean? (3) "Routing number" is for the bank, and is public. "Account number" is for me, and is private. So do you really mean "routing number" instead of "account number"? –  Tim May 28 '12 at 2:10
    
1) "Wire you money" means sending money to you, draft means withdrawing money from your account. 2) Given an account number, someone could just as easily withdraw money from your account as they could send money to you. 3) I think by "routing number", he meant the combination of routing and account numbers that uniquely identify your account. –  bhamby May 28 '12 at 14:34
    
Your account number is not private. It is printed on every check you write. –  JohnFx May 28 '12 at 16:52
    
It is true that it's not private, but it's also not completely public as you generally know who you give checks to and you aren't giving it to just anybody. That said, you're taking a small risk each time you give out a check. That's why I always prefer something like Paypal when possible, credit card next preference since you see charges on CC before they are actually paid so you have more time to protest if something's wrong. –  StasM May 29 '12 at 0:18
    
I recently renewed my automobile insurance policy by mailing in a check for the premium. The tear-off slip that was to be included with the payment said something to the effect that by sending a check, I was granting permission to the insurance company to submit a demand draft in the amount of the premium electronically instead of depositing the paper check. Previously there was no such permission sought, but the demand draft was submitted electronically anyway. So I suppose that things may have changed somewhat since the time of the shenanigans described in the link given in JohnFx's answer. –  Dilip Sarwate May 9 '13 at 18:12

I think the answer depends very much on where you are.

I believe the other answer covers north america.

On contrast, in (continental) Europe, giving the account and bank number (IBAN and BIC) is a (the most) common way to enable someone to send money to you.

E.g. in Germany, you need much more than account number and bank number to withdraw money:

To "push" money to another account (wire transfer from your account to someone who gave you the other account + bank numbers), you either have to hand-sign a certain form, or (online) certain credentials (e.g. login & password / PIN + TAN) are needed. I.e. for defrauding you, the other would need to get your online credentials (for mTAN also your mobile phone, for chipTAN a TAN generator of your bank [easy] and your bank card, for (i)TAN your TAN list) or fake your signature.

There are also ways to allow someone to pull money from your account, see e.g. direct debit

For that you sign that the other side is allowed to withdraw specified amounts of money (at specified dates). This is either

  1. between you and the other (i.e. your bank cannot check and doesn't reject withdrawals that are not authorized). However, the other side needs to have signed a contract with their bank that they'll only try to withdraw money they're entitled to.

  2. or you sign such a thing with your bank (then they do know whether the other side is allowed to withdraw money, and you can tell the bank that you won't accept any further withdrawals from XYZ).

In the first case, the withdrawal technically still needs your approval. In order not to create a huge risk of fraud, the rejecting here is really easy: If you tell your bank that you reject the payment,

  • the bank will immediately roll back the transaction.
  • You need not give a reason for rejecting such a payment,
  • the bank is not allowed to charge you anything for the rejection, and
  • has to give you the interest you'd have gotten if the money had stayed on your account.
  • However, the bank can charge fees to the other side who tried to withdraw money from your account without approval.
  • And of course, it's criminal to try defrauding someone.
  • As the banks are much interested that this procedure is accepted as a safe way of payments, they're much after persons who try to defraud by this procedure.
  • But even if the one who tried to withdraw money was entitled to the money (and you just say "I don't pay"), the bank rolls back the transaction. In that case the other has to go to a civil court to get his money.

The practical rule is that the payment is approved if you didn't reject within the first 6 weeks after the bank sent the account statement. In other words, until 4 1/2 months after the withdrawal (in case you have a bank that does only quarterly account statements), the one to get the money cannot be really sure that he actually has the money.

I think (but I'm not completely sure, maybe someone else can comment/edit) that these two possibilities are also what is used with debit card payments (EC/Maestro card - these are much more common here than real credit card payments).

-- end of Germany specific example --

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protected by Chris W. Rea May 9 '13 at 11:35

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