Preventing Unauthorized Online Payments from a Checking Account
There
are many situations in which a person can make an online payment by
providing a bank checking account number and bank routing number.
If a criminal discovers these numbers and decides to use them for
making online payments, the victim's account will be automatically
debited. Unless the victim discovers the theft quickly, it is
very possible that the money will be gone forever.
There
is no authentication when payments are made from checking accounts in
this way. It is similar to the situation that occurs when a
credit card number is stolen and used to make fraudulent charges. While the
victim can report the theft to the bank, the protections afforded to
consumers if their bank accounts are fraudulently drained are fewer
than when a credit card number is fraudulently used. Although a
bank may eventually replace the stolen money, it would seem to be much
better if the theft could be prevented in the first place.
One current approach being considered eliminates the need for bank account information to be provided to the online merchant. In this approach, called Secure Vault Payments, the consumer wishing to make a payment from a checking account does not provide bank account details to the merchant. Instead, the consumer is redirected to his/her bank, where authentication occurs. After the proper authentication, the bank makes an electronic payment directly from the consumer's bank account to the merchant's account.
One current approach being considered eliminates the need for bank account information to be provided to the online merchant. In this approach, called Secure Vault Payments, the consumer wishing to make a payment from a checking account does not provide bank account details to the merchant. Instead, the consumer is redirected to his/her bank, where authentication occurs. After the proper authentication, the bank makes an electronic payment directly from the consumer's bank account to the merchant's account.