Check Fraud Is Rising and the Thieves Are Winning | Hacker News Reader

Check Fraud Is Rising and the Thieves Are Winning

nytimes.com

15 pointsedward25 comments

Bigger question is, why, after so many years of massive development around internet and payments & cryptocurrencies/blockchain etc we still have a 'pull' based payment system instead of a push based one. just because I wanna pay somebody $100 why does that gives them the ability drain my account just because they knew some information about my account. this is a easy problem to solve especially with the new Fednow clearinghouse in picture, but you can be guaranteed banks will drag their feet on any moderization effort that takes revenue away from BS like overdraft fees.

https://news.ycombinator.com/item?id=36801491

https://www.frbservices.org/financial-services/fednow/about....

While true FedNow instant payments went live a few months ago, there is an adoption curve and a lot of banks and credit unions have to update their back office and risk systems to support instant payments. It will eventually obsolete checks. You can move up to $100k at a time today (and $500k in the future) for about five cents (bank/financial institution charge, most won’t charge you, some might).

If your bank doesn’t support FedNow, call them and tell them you want it.

What's stopping banks from increasing this charge to $10 or $50 or a percentage, on top of the Fed charge? Because if they can, I'm sure they will.

Competition. Any bank can plug into FedNow for $25/month. It is unlikely banks raise rates, Zelle is free for example at every bank that supports it. I’d also expect Congress and the Fed to stamp that shit out quick considering this will eventually replace paper checks and ACH. FedNow is intended to operate on a cost recovery model.

Does fednow cover all the day to day uses of checks? Can I hand someone a token of some sort that they later redeem?

It does not replace gift cards or where you want the person to have to redeem the funds transfer at a later time, although one could build such an escrow service I suppose. SLA for delivery is no more than 20 seconds from when a transfer is initiated.

When we give gifts via stationary cards, I print a QR code sticker to place in the card that fires a notification when scanned, which lets us know to Zelle the gift because the card has been read. Could be productized for sure.

> When we give gifts via stationary cards, I print a QR code sticker to place in the card that fires a notification when scanned, which lets us know to Zelle the gift

Why not just put cash in with the card? It seems much easier and more convenient.

Too much risk of being stolen or lost in transit. Literally everyone in my network has Zelle or Wise for sending them fiat. We might have different ideas of easy and assurances.

> Too much risk of being stolen or lost in transit.

In my experience, that risk is very, very low (at least in the US). But yes, if we're talking large amounts of money, I wouldn't put it in a card. That said, I included $500 in cash in a package last month, so my risk tolerance is likely unusually high for this sort of thing.

> Literally everyone in my network has Zelle or Wise for sending them fiat.

Ah, that's a bit different (do those services charge a fee, though?). In my social circle, there are only two people (that I know of) who already uses such apps. Everyone else would be pretty annoyed, and probably wouldn't bother to scan the QR code.

It's interesting how much social norms can vary from group to group.

I haven't even seen one in like over a decade now!

I've never had a chequing account and I'd never accept payments in the form of cheque.

Cheques won't be a thing in Australia soon enough either: https://ministers.treasury.gov.au/ministers/jim-chalmers-202...

Main thing I remember of cheques: seeing photos of the people who ripped a business off who then put them up on a wall of shame.

I saw it quite a bit more in the 90's. I guess back then it might have been handy to have them as a system to keep track of your big bills? Go through your checkbook tabs or something to sum up the months bill expenditure?

We've had online banking for quite a while now and that makes it real simple to export a transaction log to csv for accounting.

I had to bust mine out again recently when I took a small loan against my retirement account and the servicer inexplicably only took check as repayment methodology. In the States you sometimes see it more used as a tactic to drive revenue by landlords - legally they are often required to take a payment without charging any sort of fee associated with it. So what they will do is allow that by check - the most annoying route possible - and then turn around and offer an ACH or other electronic alternative for some comparatively exorbitant fee.

In any event the heyday for checks has been past in the States for a long, long time. I got a book of checks when I opened my first checking account nearly two decades ago, and I’m still on that book of checks. Once the internet came around and everyone accepted debit is what really killed it I think. For a long time there was just stuff that straight up didn’t accept debit. Plus familiarity from an older generation when that was even more true

> I had to bust mine out again recently when I took a small loan against my retirement account and the servicer inexplicably only took check as repayment methodology.

You're lucky you had checks to bust out! I haven't had any for about 20 years now. One time, I needed to pay someone who only took checks and that required me to go to my bank to get a counter check for them.

I still have a checkbook because of a single person I pay four times a year, who refuses payment in any other method. Sadly they're a bit too old and anti-tech to ever embrace direct transfers, and mailing cash is sort of a terrible idea.

Meanwhile, in the US, I was in line behind a 80ish year old lady paying by check at a pharmacy, less than a week ago. I hate the things with a passion.

I remember in the mid 2000’s I was a bagger at a grocery store and the cashiers hated them too. They were by far the slowest way to pay for everyone involved. The cashier had to write down the drivers license and do several other precautionary measures due to the fraud associated with them. Eventually a lot of grocery stores just stopped taking them entirely.

Meanwhile we could just zing whatever piece of plastic through the slot and we would be good to go. I still have -see ID- written on some cards :/

The day they brought chip to the USA was a good one. In 2024 there will still be gas pumps who don’t support it. More than ones that do it seems.

Fortunately it seems like everywhere else does support it. Eventually either gas pumps will become irrelevant or the old ones will be eventually replaced

I never understood why in 21st century checks are still so popular. in germany i would use cash or direct debit. The later only for remote things.

In my part of the US, they're not at all popular. They're incredibly rare.

They aren't popular. It's a weird thing that only happens in America. It's just like asking, "I never understood why in the 21st century carrying guns around in public is still so popular." Again, it's not, it's only in America; it's not like that in the rest of the civilized world.

They aren’t even popular in America. In the last two decades I have written less than 100 of them, I still have the original book that I got when I opened my very first bank account. They remain, as I mentioned in a sibling comment, primarily as a way for landlords to extract more money out of people.

Well, it's relative: they're far more popular in America than any place else, where they're generally extinct. It's just like carrying guns in public: by far, most Americans don't, but the percentage of the population that does (though a small minority) is still FAR higher than any developed nation.

For the few things you'd need to write a check for... Certified check from the bank or a money order from the grocery store both seem like an easy way out of this. More than anything I wish I had the option to turn OFF check withdrawals from my account as I never write them and worry some stupid company (for example, rent processing one) is going to leak account numbers.

Apparently the automatic rent payment I arranged for my apartment in SF entailed actual physical checks (cheques) being mailed to the landlord each month. Mind boggling.

Cheques was canned by the banks a long time ago here - you guys still using paper - how quaint.

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