Card transactions by proxy

Peter Mitchell otcbn at
Wed Apr 6 11:07:27 BST 2011

Ian Batten wrote  on 6-04-11 09:47:
> On 6 Apr 2011, at 09:18, Roland Perry wrote:
>> In article <4D9C186A.2090604 at>, Peter
>> Mitchell <otcbn at> writes
>>>> A friend in the USA gets his pay, just like I do,
>>>> by bank transfer from the  employer. Except that a
>>>> few months ago he discovered that it was actually a
>>>> sort of reverse DD: the employer had a cash flow
>>>> issue and just took back  everyone's pay a couple
>>>> of days after he'd paid it! Does anyone know if
>>>> that can happen here?
>>> Certainly it can, the employer simply tells the bank
>>> they have DD authority over those accounts. The bank
>>> doesn't check, any more than it checked Jeremy
>>> Clarkson.
>> Wouldn't the bank check to see if the employer was
>> registered with them for doing DDs *at all*?
> Peter believes that employers are willing to breach the
> theft act and the fraud act, in collusion with banks, in
> order to do him down.  There's little arguing with that.

I didn't say anything about who was *willing* to do what. I 
merely answered Roland's question about what *can* happen 
under the system as it stands.

> As a random example, why would a bank, of which I am a
> customer, collude with my employer, who isn't, to defraud
> me?  And transparently, obviously defraud me? 

I doubt if it amounts to fraud by the bank. But if you're 
asking why banks would pay unauthorised direct debits, the 
answer is: I don't know exactly why, but it is completely 
and utterly certain that they regularly do exactly that.

Probably the reason is just that it's easier for them to do 
that than the alternative.

>  And
> that's before Roland's obvious point that most employers
> aren't DD originators at all, 

But many are, and they can do what Roland asked. Moreover it 
is very easy for a large organisation to become a DD 

> and those that are the
> payroll people are so organisationally removed from the
> accounts receivable people that it wouldn't happen, in
> part because any company that tried anything so stupid
> would lose its DD-origination rights and that would
> cripple them.

Huge numbers of unauthorised DDs have been deducted by 
utility and other companies in the past few years and none 
of them have ever had their DD rights removed AFAIK, even 
when a consumer's complaint has been upheld.

Pete Mitchell

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