The Checkout

Free Medical Services? NO, NO, NO

Last week, it was Colorado that was issuing an alert alert about a recent scam that has hit the state and probably several others. Then, it was the state of Washington--which also warns there have been reports of the same scam in Oklahoma, Pennsylvania, Texas and Virginia. And now add Maryland to the list.

Here's how the scam works: A telemarketer claiming to be from the state's "Department of Health" calls and offers vouchers for up to $1,000 in free medical services. The caller usually has the consumer's name, adddress, date of birth and name of the consumer's bank--making the consumer that think the caller is with a real government agency. The telemarketer reads the routing number for the bank or credit union and then asks the consumer to recite the next five numbers on his/her checks. THESE FIVE NUMBERS ARE THE CONSUMER'S ACCOUNT NUMBER. That gives the scamsters all they need to know to tap into a bank account.

The alert said the telemarketers are very persistent; one consumer was called eight times in two and a half weeks despite her requests to stop.

Moral: NEVER, EVER provide personal or financial information on an unsolicited telemarketing call. You never know who you are dealing with.

By  |  January 25, 2006; 11:49 AM ET Consumer Alerts
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Comments

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I don't understand how banks are required to have so little protection for their accounts, unlike credit cards.

Is it really true that someone can wipe out all of the money from your account based only on the information that is on every check you use? Why is it not a risk to hand a check to a cashier at a store? Should a consumer have no protection against fraud that can occur even with all reasonable protections? Shouldn't banks be verifying these transfers or asking for more information to limit this kind of fraud?

Why don't banks have to protect against fraud like credit cards do? Credit cards are required to cap losses at $50, but you can lose all of the money in your bank account if you're ripped off by someone using numbers off one of your checks?

Posted by: Ms L | January 13, 2006 10:52 AM

"The alert said the telemarketers are very persistent; one consumer was called eight times in two and a half weeks despite her requests to stop." It could be separate "telemarketers" who are operating off of sold private data.

"Why don't banks have to protect against fraud like credit cards do?" All laws are forged through a balance of power. The banks want to control the amount of risk they are exposed to. I agree with you; the risk to the consumer should be made lower. It is all defined in the Electronic Funds Transfer Act; see http://www.ftc.gov/bcp/conline/pubs/online/payments.htm. Your risk is bounded (albeit significant) as long as you are vigilent - there is a deadline of 60 days.

Posted by: Keith | January 13, 2006 11:19 AM

The report appears to be somewhat inaccurate, as bank account numbers are always longer than 5 digits. In the past, they were at least 7, but with all the mergers, it is more common to see 10 digit numbers now.

Posted by: Tim | January 13, 2006 12:42 PM

I once wrote a post dated check and gave it to my landlord. My landlord deposited the check and it was processed by my bank. I asked my bank why they processed a post dated check. They told me that they don't look at the date on the check or even the signature. They only look at two things: account number and amount and let the check go through their automated system. They said they expect the cashier at the bank that accepted the check deposit to notice and return the check to the person making the deposit. So much for banks doing any verification to protect their customers!!

Posted by: PostDated | January 14, 2006 9:26 PM

At least PostDated's check was to the correct person. I accidentally paid off my student loan when the check for my mortgage went to the student loan company and vice versa. The student loan check came back saying it was the incorrect name. But the student loan company cashed the check to the mortgage company and sent me a refund for overpayment. Go figure. Fortunately the mortgage company was kind and didn't charge me any late fees or penalties.

Posted by: Bad Company | January 17, 2006 7:03 PM

Charleston is a threat as it is a major port on the East coast that terrorist would use to ship in weapons of such nature. You can't get them into Baltimore with all the bells and whistles there. You exercise to be prepared. How would we be prepared if all we do is read it from the manual?

Posted by: Real | January 25, 2006 6:45 PM

Pendostanets!

Posted by: Pendostanets | March 13, 2006 7:18 AM

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