How banks can make checking accounts safe again.
By
Staten Island, NY Posted: 9/12/2014 1:00:00 AM
The problem with today's checking account system
We've been trained over the past 20 years to think that we must hide our account numbers at any cost. Which is why most of us now have shredders in our houses... just to mutilate our bank statements and receipts.
We do everything we can to keep people crawling in our trash from getting our bank account numbers.
But wait!... Every time we write a check, we are actually giving somebody our entire account number!
Huh? How the heck is that safe? Basically, any stranger who handles a check we write, from a clerk in a supermarket to the people in the back offices at the utility companies has our entire account number in their hands.
I guess we all have to assume that 100% of the people who will have access to our account don't have a pencil, a cell phone, a photocopy machine or a some other ultra-high tech spy gear like a crayon that can be used to copy our bank account number from the bottom of the check
How the banks can make checking accounts safe again
Two simple steps.
1. Instead of a sequential check number after our account number on checks, banks should add a simple string of unique numbers to the end of the account number that can only be used once, and that must be registered with the bank before it can be used. Without this pre-approved suffix, any transaction, other than a deposit should be rejected.
2. For recurring debits, just allocate a block of numbers for each vendor in advance. So, if a vendor needs to be able to pull funds every month for 48 months, they are allocated 48 transaction numbers.
Using this system, consumers can still order 200 puppy dog checks from a check printing company, each one with a unique, non-sequential number in place of the check number. The only difference is that the consumer would need to confirm receipt of new checks before they become active.
What's nice about this is that even if the entire checkbook is lost or stolen, before or after receipt, a thief couldn't do anything with the checks, because those specific numbers wouldn't be active.
The system would be so safe, we could hand out our checking account number on a check or even put it on a billboard and not worry about somebody cashing unauthorized checks.
Joe Crescenzi, Founder
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