Timeline for Why would a loan company deposit a small amount into my account and require I send it back?
Current License: CC BY-SA 4.0
10 events
when toggle format | what | by | license | comment | |
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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 |