- Joined
- May 16, 2019
Yes and no. There's a lot of hidden intricacies and oddities in banking that most people don't know about.
Checks are a relevant example here; did you know it doesn't have to be a piece of paper issued by your bank? Anything can be a check, if you have the correct account details written on it (although the story about the live cow is fiction). More importantly, you are able--or used to be able--to call up a bank and do transfers by voice, using the account details and verifying information like your birthdate.
A lot of the "don't give out your bank details" is actually good advice from the days before the Internet, when these things were more common. But many of these avenues have been closed now that most check clearing and fund transfer is automated. If you have to log in to your bank website to start a fund transfer, the security is moved to that login. If you walk into a bank with only account details, it's easy for someone to request ID and pull up a database of customer info to confirm it's fraud. If you try to deposit a non-standard check through an ATM, it can detect it, plus you're on camera making the attempt.
It's still good advice not to give out bank info, for the same reason you don't give out your SSN: many places still use it as a pseudo-secret PIN to confirm the person they're talking to is genuine.
A lot of the "don't give out your bank details" is actually good advice from the days before the Internet, when these things were more common. But many of these avenues have been closed now that most check clearing and fund transfer is automated. If you have to log in to your bank website to start a fund transfer, the security is moved to that login. If you walk into a bank with only account details, it's easy for someone to request ID and pull up a database of customer info to confirm it's fraud. If you try to deposit a non-standard check through an ATM, it can detect it, plus you're on camera making the attempt.
It's still good advice not to give out bank info, for the same reason you don't give out your SSN: many places still use it as a pseudo-secret PIN to confirm the person they're talking to is genuine.
The businesses you see give out their bank info freely also have a safeguard you don't see--a hold placed on that account to reject outgoing transfers, except by a specific person or mechanism.
A good example is lawyers who do escrow transactions, like closing costs when buying a house. Any random secretary in the office will text you their account details, because anyone can send money in to the account. But only a certain person, either through a secure app, through secure fax (no joke), or through voice with a particular passcode, can transfer money out. I think individuals can place the same kind of hold on their accounts, but you'd probably have to arrange that in person in a physical branch.
A good example is lawyers who do escrow transactions, like closing costs when buying a house. Any random secretary in the office will text you their account details, because anyone can send money in to the account. But only a certain person, either through a secure app, through secure fax (no joke), or through voice with a particular passcode, can transfer money out. I think individuals can place the same kind of hold on their accounts, but you'd probably have to arrange that in person in a physical branch.
Is any of this a scheme to promote credit cards? I don't think that's the intention, these kinds of arrangements were built up slowly by banks over a hundred years. They started out to protect banks against other rogue banks, later modified to protect the system against con men and check kiters. Now I think it's ingrained because banks are frankly on shaky ground technologically, and they need every scrap of system security they can retain.
CC and processor companies may benefit as a side effect, but banks wouldn't care enough to challenge the messaging. It's also a liability, a bank who tells customers they can spread the account info freely is just begging to get hit by a lawsuit.
