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Dec 2, 2022 at 23:18 comment added Paul_Pedant @user71659 I am familiar with the cents being used as a code mechanism. My typical month (UK terminology) has 6 direct debits initiated by an organisation, and 8 standing orders initiated by me. So proof of the payment route can work either way.
Dec 2, 2022 at 18:55 comment added Justin Cave @Paul_Pedant - In general, borrowers aren't initiating transfers that would require knowing the loan company's account details. I have no idea what account my mortgage payment gets routed to for example. The mortgage company initiates the electronic withdrawl or I send them a check.
Dec 2, 2022 at 18:14 comment added user71659 @Paul_Pedant What happens is the loan company (or utility company, or Amazon/PayPal payments, etc.) asks the customer what the exact values of the two deposits were. This proves access to the bank account, like a SMS with a code shows you have control of the phone number. Further, the withdrawals are not a reversal, but a separate debit transaction. This verifies that there isn't a ACH withdrawal block or misconfigured ACH Positive Pay (whitelisting) on the account (in addition to getting their cash back).
Dec 2, 2022 at 15:56 comment added keshlam (Hi, Ellie! -- Joe, probably not closely related.)
Dec 2, 2022 at 12:24 comment added Paul_Pedant If the loan company itself retracts the small payments, there is no confirmation that the borrower has their account details correctly, to make repayments. They already have your bank details -- sending them back a couple of bucks does not seem to add any risk. You might see if this company has any online reputation, for good or bad.
Dec 2, 2022 at 6:48 comment added Ellie K Without additional information, it is impossible to answer the question. This answer is good (I upvoted) because it is correct, i.e. for a financial services company to send two transactions in amounts of less than $1 to confirm routing and account numbers. That is NOT a scam. Anything else is a different matter entirely.
Dec 1, 2022 at 15:24 comment added Chuu I would bet that in the op's case even if they claim they're going to send a small amount, they "make a mistake" and send a large amount that they demand gets refunded. Turning it into a classic refund scam.
Dec 1, 2022 at 13:24 comment added Laconic Droid +1. I literally just went through this process a couple of days ago when I linked a new account to my bank. A 72 cent debit and 2 credits I had to confirm before the link was activated.
Dec 1, 2022 at 6:08 comment added keshlam They will usually ask you to confirm the amounts of those under-$1 transactions, to confirm not only that the account exists but that you have access to it and aren't mucking with someone else's account. And emphatically seconded: it it is more that a trivial amount, this absolutely screams scam.
Dec 1, 2022 at 2:05 history answered Justin Cave CC BY-SA 4.0