Why did my relative's checking account experience fraud, again?
November 4, 2022 6:40 PM   Subscribe

My very careful elderly relative has experience fraudulent withdraws on two separate checking accounts in less than two months. Why is this happening and how do we stop it?

My elderly relative has a checking account with Chase Bank. She uses it very rarely, via a checkbook and a debit card that she always runs as a credit card. She writes one check per month, for rent and uses the card approximately twice per month for small outings. The checks and card are kept secure.

Less than 2 months ago, a renovation company successfully made 2 electronic withdraws from the account, for about 500.00. My relative caught it on her statement and I helped her contest it with Chase and get a new account number, checkbook, and card. I also set up text alerts for her for all activity. Today, less than 2 months later, she received a fraud alert that an attempt was made to withdraw 300.00 by the local electric company. She confirmed that it was fraudulent.
I think she needs to get another account number and will help her talk to Chase tomorrow. But I am trying to figure out what is happening here and how to prevent it again. It seems to me that somehow, someone has gotten to her account numbers.

My first thought is that it was obtained from a check. The only person she writes a check to is her landlord, but who knows who else sees it. Is the check the likely breach here? She uses her card sparingly, perhaps twice a month at a fast food drive through. Coincidentally, perhaps, today's fraud alert occurred after she used it at a drive through yesterday. Could this be the potential source of the problem?

I am trying to figure this out in order to decide if just getting another account again will help or if something else is at the root of the problem that we need to address.
No matter what I am going to help her pull her credit report and look about ID monitoring to make sure there isn't some ID theft going on.

I will note that she does not want to stop using checks and can not work something like online bill pay. I have offered to do it for her each month she wants to use her checks. Any insights/suggestions you may have are appreciated. Thanks.
posted by fies to Work & Money (10 answers total)
Ask Chase if it was ACH fraud -- there's been a huge upswing in that (in my area) and I was one of the victims. I will say that Chase did me a solid and fixed everything at minimal hassle for me; new account number, old OK transactions passed on to new account, everything pretty much seamless.

...in my area, the bad guys are basically guessing account numbers; there's no "mistake" on the part of the victim, they're just guessing account numbers and spamming withdrawals into banks that have less security (Discover Bank being a particular problem; they don't bother to verify much, and they end up on the hook for the theft in the end).
posted by aramaic at 6:53 PM on November 4, 2022 [4 favorites]

I would not dismiss the landlord as a possible culprit, to be honest. THe fact this happened twice in such a relatively short span of time worries me.

That being said, asking the bank for information about the transaction is not a bad idea.
posted by Alensin at 7:00 PM on November 4, 2022 [3 favorites]

Pull a disclosure report from ChexSystems. Similar to but not the same as pulling a credit report, your ChexSystems report will show you if there's been any weird/unexpected checking stuff going on in your name.
posted by phunniemee at 7:01 PM on November 4, 2022 [2 favorites]

I would try switching from the debit card to a credit card
posted by charlemangy at 7:38 PM on November 4, 2022 [2 favorites]

A landlord is the sort of person that would routinely hire a renovation company or pay a utility. Maybe they're saving money by stealing it.
posted by Snijglau at 8:36 PM on November 4, 2022 [2 favorites]

This sounds like check fraud. You could test this theory by having the landlord paid with a cashiers check and see if it reoccurs.
posted by Bottlecap at 12:49 AM on November 5, 2022 [1 favorite]

I personally would suspect the fast food place.

I wonder if her bank would give her a second card that you ONLY use for fastfood and is limited to $20 transactions (or however big her transaction typically is).

Not too sure about the electric company though. Wonder if someone just fat-fingered it? Nowadays, you setup autopay by simply typing in the account number. I can see someone making a mistake typing it in. You can do some sort of photo verification in an app where they take a photo of debit card and it reads the number, or do the same with a check's account number. But not when you're just letting people type random stuff in.
posted by kschang at 2:45 AM on November 5, 2022

It sounds like check fraud to me, if what you mean by "electronic withdraws" is an ACH. Somewhat obviously if the transactions were done by the card number, then it is the debit card. If you are unsure how they were processed, check the statement -- on the statement there is typically more info than on the online register. If it says ACH, someone has your account and routing number. If it says something like "Check Card Purchase" or "Debit Card" that is the Debit card that is your problem.

I would start paying the landlord by some other means - cashier's check or money order are both pretty secure - and make sure what kind of "electronic withdrawal" you're dealing with. If the fraud is ACH fraud, you need a new account number; if it's the debit card, you just need to kill the old debit card and get a new one.

Source: Worked in customer care and quality assurance for an online bank for 5 years.
posted by Medieval Maven at 7:57 AM on November 5, 2022 [1 favorite]

Is the check being handed directly to the landlord or going through a lockbox or the mail? My town has had a rash of check frauds traceable to a single mail collection box where someone was extracting checks and stealing the information off of them.
posted by nonane at 9:06 AM on November 5, 2022

Response by poster: Thank you all for your thoughts and suggestions. I should have added that she hands her rent check to a staff person who then gives it to the landlord. Although she seals it an envelope, it is possible someone else has seen the information. We are going to call Chase in a couple hours. And I am going to try again to see if I can convince her to consider another rent payment method.
posted by fies at 9:20 AM on November 5, 2022

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