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Why would a loan company deposit a small amount of money into your account to verify if you are honest about repaying the loan you’re asking for?

They want to deposit a small amount into my account, and then I have to return that money, and they say they will deposit the amount of the loan I’m requesting into my account.

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  • 43
    Tell them to subtract the initial deposit from the remainder, and see how many different excuses they come up with.
    – Criggie
    Dec 1, 2022 at 11:29
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    How did you find this loan company? Are they well-known?
    – mmathis
    Dec 1, 2022 at 13:38
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    Whenever anyone proposes to deposit money in your account and proposes that you do something to return it, it is always a scam. Dec 1, 2022 at 14:42
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    Are we sure this isn't the like the two deposits under a dollar thing to verify the account?
    – user26460
    Dec 1, 2022 at 21:25
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    @26460 Good point, and no, we are not sure. OP needs to clarify that point otherwise this question should be closed due to lack of clarity. Dec 2, 2022 at 6:52

7 Answers 7

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What exactly is the "small amount" we're talking about here? It is pretty common when setting up a direct deposit to send one or two payments of < $1 and to ask the owner of the account holder to confirm the amount of the payment. That ensures that the routing number and account number are correct. The sender would then automatically withdraw those small deposits. The account holder shouldn't need to do anything to return the money.

If we're talking about more than a dollar and the individual is asking you to initiate a payment back to them, that would seem likely to be some form of an advanced payment scam where their deposit turns out to bounce and get reversed but your payment can't be reversed.

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    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.
    – keshlam
    Dec 1, 2022 at 6:08
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    +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 13:24
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    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.
    – Chuu
    Dec 1, 2022 at 15:24
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    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 2, 2022 at 6:48
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    @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).
    – user71659
    Dec 2, 2022 at 18:14
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There is no reason, whatsoever

This is the wrong part: "and require I send it back".

A reputable institution may deposit a very small value in your account to perform some tests and then they revert this transaction. You do nothing.

A typical scan would demand that you make a transfer to another account, thus stealing your money. Any deposit that you first "receive" is a temporary fake, that will be reversed, as above.

It goes like this: They transfer fake money, you transfer your real money, the fake money disappears, the loss is on you.

This is a scam. Don't engage further, block them, and be safe.

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    In Poland, it is typical to ask future client to deposit 1zł (about 25 cents) in their account. It's not about being trustworthy, but to test if client is capable of paying - any technical issues can be spotted before the loan deal is sealed. Also, it works as additional confirmation that name on the account is the same as the name of person taking the loan, and that the account number is valid and the same client meant to use. It's not a scam, it's honest verification. And of course they give you your 1zł back, no matter if the loan is approved or not.
    – Mołot
    Dec 1, 2022 at 20:34
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    @Mołot I guess the takeaway is, whatever it is, it's supposed to be a worthless sum of money. And if they claimed there was a mistake and too much money was involved, it's a scam.
    – DKNguyen
    Dec 1, 2022 at 22:19
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    @molot That is the exact opposite scenario of what is being discussed by the asker, and does not require repayment of the pennies. Dec 2, 2022 at 14:32
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    @Grade'Eh'Bacon The pennies is taken back in order to verify that a debit can successfully be made. There's reasons why a credit can succeed while a debit fails. For example, Positive Pay (US ACH) a.k.a. whitelists (Canada EFT, SEPA Direct Debit) would block debits from non-approved billers.
    – user71659
    Dec 2, 2022 at 21:25
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You giving back money they just gave you tells them nothing about your ability to pay back a much larger amount of money over some period of time. "If we can trust this guy to return $5, we can trust him to return $5000." It's absurd. If that's actually the reason they told you, then I would assume it's a scam.

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I had one case where the sender of a 0.10€ transaction required me to do an action - to look at the transaction description, find a 5 digits code, and type it into the web request form to ensure the banking details are OK.

To be clear: there were no monetary transactions required, the 0.1€ was reverted on its own.

This is more or less the equivalent of an email saying " please confirm your email by clicking the link". If you expect it then fine, otherwise you just ignore it.

I do not remember which service that was.

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    PayPal uses this approach when you want to add a bank account.
    – TooTea
    Dec 2, 2022 at 12:38
  • @TooTea I'm not even sure if they revert the test transaction or file it as business expense Dec 2, 2022 at 19:44
  • @HagenvonEitzen Back when I used PayPal years and years ago it did not revert.
    – DKNguyen
    Dec 2, 2022 at 20:47
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If it is really only a tiny token amount (less than you would pay for a pack of gum - i.e. less than a Dollar / Euro) they may use this to verify that the bank account indeed belongs to you and that you can access it / perform transactions from it. I had this experience with both online payment services and big retailers - but once again, the amount was tiny - between 1 and 10 Cents I think.

If they ask for more than that - you probably are looking at a scam: The money transferred to your account will get reversed (as the account it came from is likely hacked etc. making it a fraudulent transaction) while the money you from your account is likely to be gone for good (you were not hacked, but simply fell for social engineering, which the bank does not care about).

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There would never be a need for you to return the money.

A legitimate lender is perfectly capable of pulling back the payment on their own without any of your help.

Now you know how companies will often text you a one-time-use authentication code, typically in TXT to your cell phone. When linking a bank account, they will typically do the same thing by sending two "penny deposits" to your account. For instance they might send an 8 cent and 43 cent deposit to your account. They then demand these two numbers as authentication to confirm you control the account. Once that's done, they snap back the two deposits - they are not yours to keep.

One scam: "accidentally" send you too much money.

Then the person, having gained your confidence, will say they made a terrible mistake by fat-fingering the wrong amount. Then, they will claim they cannot pull the money back (total lies) and will manipulate you into returning the money via some other method such as Cryptocurrency, purchasing gift cards, Zelle, Western Union or some other irreversible method.

Then they will actually pull the money back, and keep the crypto, Western Union or whatever you sent them. You are left holding the bag.

Or the money they "sent you" never existed

This scam involves convincing you to use a "screen sharing" app which actually gives them remote control of your PC. They have you log into your bank account normally. Then, out of your sight, they go into developer console on the web browser you are using, and alter the HTML code so it shows a deposit that didn't actually happen. Then they say "oh look, it refreshed, there is our deposit indeed, just as I told you!"

Again they claim they made a mistake and you need to send them the money back via some other method such as Bitcoin etc. because they can't pull it back, always a lie.

And in this scam they get to see your bank account with their own eyes, so they know how bug of a "mark" you are and how much effort they should put into scamming you.

But they're always coming up with new scams

The common ground is they over-deposited and you need to send some back.

Or, they are trying to convince your bank to authorize them to take arbitrary withdrawals from your account.

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  • Or it was money scammed/hacked from someone else. Dec 3, 2022 at 4:03
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It is a scam. There is no loan company, there is one or more scammers. If someone gives you money, then asks you to return it, it is a scam.

Here is how it works: The money you receive isn’t real. It’s paid with a forged check, or comes from a hacked bank account. It will go into your account, but the bank will take it back. But the money you return, that is real, and you will lose it.

There are many ways this happens. There is the “sugar daddy” who pays for a girls attention and asks for some money back. There are parents enrolling their non-existing kids into some expensive private school, pay s check for $5,300 instead of $3,500 “by mistake” and ask the school to return $1800.

Every single time if someone gives you money and asks you to return some of it, it is a scam. 100%.

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