Is Your Money Safe In A Bank?

If I were to ask if your money is safer in a box on your back porch or in the bank, you would most likely say the bank and give me an eye roll.

Well, I would push back and say, no, your back porch is! Well, unless you have put in place what very few people and businesses know about. After all, I have never had anything stolen from my house, my yard, my car, etc. However, last month our company had money stolen out of our business bank account and get this, there was nothing we could do! Worse yet, we knew who did it, and even then, we would have to take them to court to get the money back. If they stole it off the porch, we could call the police. But with the bank, we would have to spend money to take them to court. Also, they know if they take around a thousand dollars or even two or three thousand, it costs more to get it back than just letting them keep it.

As a business, you only have 24 hours to notify the bank that money was stolen from your account. On a personal account, you only have 60 days (these are new rules that went into effect back in 2021). After that, you have zero recourse other than suing the person or company that took the money.

It gets worse. Everyone knows about stolen identity. Well, these crooks are getting smarter and know that the easiest way to steal is by taking money out of bank accounts and then closing out the account and walking away. This means there is no way to go back and sue them because they don’t exist.

Yes, it does get even worse! You might be thinking, thank God no one has my banking account and routing number. Well, just look at your check number, and let’s say it is 5001. That means five thousand people have your bank account and routing number, and that does not include any business that you gave your ACH info to. Again, you may think a business won’t steal. First of all, I know that in our industry, most of our competition has a website, which gives many people a false sense of security. However, If you start looking for the ownership of that company, you may be surprised that not one owner is listed. Under the “about us” section, it’s just a made-up mission statement or some other little cute saying. They have a website today and will be gone tomorrow. But again, even if they are a real company, your only recourse is to sue them for money taken out of your bank account.

No worries, there is a happy ending or at least a somewhat happy ending. Like most businesses, we keep a fair amount in the bank to cover payroll, money owed to vendors, etc. After we were robbed and told we only had 24 hours to catch it, I asked my team to look for other options. There is no way this is ok, and there is no way the large global companies that bank millions would let themselves be vulnerable to this risk.

After finding no options, we went back to the bank, and they told us about a product they have called “Positive Pay.” Now, I am not promoting the bank or this product. Not at all! Yes, we signed up for it, but at gunpoint. They gave us two options.

They are using our money for free; then they charge us to let them do that. Now, they want to charge us more to protect our money. So, does money in the bank imply it’s safe? That would be NO!!!

I guess I should not be surprised. After all, our firm audits credit card processors and banks for overbilling credit card processing fees, and the typical overbilling is about 40%. For large corporations, that adds up to over $10 million a year, and for even small companies, it is in the tens of thousands. So if they will do that, then this really shouldn’t surprise me. I guess I’m like our clients who say are you kidding me? They did what? I guess this also explains the skyscrapers, their yachts, private planes, etc.

For total transparency, I was a commercial bank executive for over a decade. Being a speaker and author, I get interviewed a fair amount, and I always say the same thing –

Check with your bank and see what product or service they offer. Also, don’t forget to get your merchant processing fees audited. I have to wonder, what else are they doing to rob businesses blind?

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