Unauthorized withdrawal from my checking account
Complaint
Barbara Nelson
Country: United States
I want to add to the litany of complaints about this crooked business. On Christmas eve 2009 TRS Recovery Services hacked into my checking account and removed $425.00 via electronic check. I have never had any dealings with them whatsoever. My credit report is clean. I have no debts that would have gone to collection.
I have filed a complaint with the Houston BBB, an Affidavit of Forgery with my credit union, filed complaints with the Saint Paul Police Fraud Unit, the Minnesota Attorney General, and the Houston PD.
I also spoke with an anxious-sounding administrative assistant at TRS and her solution was to ask for my checking account number so they could "investigate" this theft. Ya, right, like I was going to give those thieves more information. Meanwhile, these crooks still have the $425.
I have filed a complaint with the Houston BBB, an Affidavit of Forgery with my credit union, filed complaints with the Saint Paul Police Fraud Unit, the Minnesota Attorney General, and the Houston PD.
I also spoke with an anxious-sounding administrative assistant at TRS and her solution was to ask for my checking account number so they could "investigate" this theft. Ya, right, like I was going to give those thieves more information. Meanwhile, these crooks still have the $425.
Comments
The key dispute is filing a timely dispute through your credit union, under FRB Reg. E, which governs electronic transfers from checking accounts. The charge was unauthorized, you have filed a fraud affidavit which you can back up with a police report, so your credit union should reverse the charge and replace it. FRB Reg. E requires that disputes be within 60 days of the statement date of the statement showing the disputed charge, so it appears you are covered.
Regardless of whether you give TRS the courtesy of investigating from their side outside of your credit union dispute, TRS can "investigate" all they want when they get the dispute through the banking system as long as your money is back in your account. The timely dispute through your bank, combined with the law enforcement complaints, are the ones that count.
TRS is a debt collector that normally collects on bad checks passed to their client merchants. As such, they normally attempt to run through charges against those checking accounts, often with additional fees tacked on. If your checking account was charged, it would mean that your account number is now in their system, either due to some error on the part of TRS, or possibly due to someone passing a forged check.
You will want them to provide the reason for their "error", since you may have to take action to limit your exposure to future risk, either by closing your account due to the unauthorized charge, or possibly dealing with the necessary filings in case of id theft or forgery, otherwise TRS may have your name and account flagged, and you will not be able to use checks with any of their clients. (You shouldn't be using checks at retail stores anyway.)
If you routinely use checks for retail purchases, or provide your checking account number for on-line or phone purchases, you should realize the risk that entails, due to the increased risk of some employee grabbing your account number and forging checks. Limit your use of checks to payments to companies you know, such as for rent, mortgage, utilities, banks, etc.
Use only credit cards for all on-line or retail payments, since the fraud protections are strongest, and the disruption caused by fraud and having to block the card is less than for checking accounts.
Do NOT use or activate debit or check cards, since like checks, they drain even fraudulent charges directly from your account, and the fraud protections are weaker than with credit cards. Use only ATM cars with PINs at your bank's own ATM machines, but be alert to the possibility of tampering.
I only recently provided my checking account number to my utility companies so I can make online payments. I wonder if this is how TRS intercepted my account number.
After reading your advice, I will close my current account, despite the inconvenience.
I don't know why they are treating this as an FDIC insurance matter, since it is actually a transaction error, fraudulent charge, or forgery, not some charge that is not reversable because the presenter went bust. All of those are correctable without FDIC insurance, by pushing the charge back on the bank presenting it, who then pushes it back until it reaches the originator, TRS. They shouldn't have run through the charge against your account in the first place, so that is where it should go back to.
TRS is still in business, and if they entered bankruptcy, then their own bank or payment processor would be the one stuck, for not keeping up on their client's financial condition.
FRB Reg. E covers not only disputes by consumers, but reversals by banks and others handling payments through the system, for transactions involving electronic funds transfers such as debit cards or ACH. Reg. CC covers similar issues for paper checks.
ALL of the banking regulations allow for disputing and reversing errors, whether due to accident or fraud. Since payments often are transferred through long chains of banks or clearinghouses, it was worked out long ago how each would push back errors or fraudulent charges to the one who presented it to them, who could then do so back down the chain.
The end result is it goes back to whoever created the demand draft, check, debit card charge, or ACH transaction, and they get stuck, as they should. If they are crooks and can't be found, or they go bankrupt, then the party that accepted their bogus check or charge gets stuck, as they should, since they were the ones who were not careful.
You push junk into the system, it bounces back to you. Any other policy, and everyone would be gaming the system. Trust would disintegrate, and with it the whole banking system.
Once they have your number, whether they are crooks or messed up businesses who made a typo, the only way to prevent a recurrance is to close the account.
Automatic payments cause more problems than they are worth.
They may be convenient, but when anything goes wrong, you run the risk that the parties involved will just blame you, with the possibility of extra fees and damaged credit. Assuming the consumer is the cause of the problem is their normal action.
It is safer to control your payments yourself.
Roger T. Yokubaitis
Houston, Texas
Reversed EFT charges are pulled back through the banking system, just as they would be for a mis-keyed, altered, or forged check.
Debt collectors are required by FDCPA to not only identify themselves by their company name, but they are required to state that they are debt collectors.
"You better have money in your account tommorrow" doesn't meet that requirement. In fact, it sounds more like an illegal threat.
Get an attorney.
You might try www.naca.net