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Comment by danlugo92 | Hacker News Reader

Reminder to anyone reading this:

NEVER EVER give access to your bank account to ANYONE.

e.g. INTUIT (They personally scammmed me out of a month's worth of subscription that I never used).

Do NOT give your bank account to Paypal, they WILL withdraw money if they have any excuse.

You can however, give all of these your credit card, as any wrongdoing can be ammended via a Chargeback, but there's no chargeback for direct-to-bank withdrawals.

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Not ANY wrongdoing...

Despite Air Canada cancelling the flight (we didn't cancel our tickets), despite a public campaign waged to get them to refund passengers, despite the US Department of Transportation fining them $25 million (reduced to $2 million because US gov't), despite Air Canada changing their public website multiple times (I saved screenshots to include "we will fully refund") but then not actually allowing your ticket to be processed, despite me submitting DOZENS of responses to Chase for clarification on why all of this is wrong of Air Canada...

Chase: "I'm sorry, if they don't want to refund you, even if they said they would, there's nothing we can do."

https://viewfromthewing.com/dot-issues-largest-fine-ever-aga...

Have you thought of going to consumer court? Either that, or a class action lawsuit (if multiple people can group together) should definitely help you see your money. You might also be able to find a lawyer pro-bono as the case is clear cut in your favor (and charge for legal fees in the compensation).

Odd.

Did you use the magic phrase: “I need to issue a chargeback. They charged my card for services not rendered. I called their number to contest it and they did not issue a refund.”

That (or “they charged my card but did not send the product”) has worked 100% of the time for me. I’ve never provided documentation beyond that.

Chase has a strong financial incentive to issue the chargeback (Air Canada ends up paying Chase a fine), and it’s no sweat off Chase’s back if Air Canada sues you.

Card issuers have no incentive to investigate further, and (in my experience) never ask for further documentation.

If Chase was already involved, it seems like Chase denied the chargeback request. Banks have an incentive to not let bad chargebacks through to major merchants, it would reduce the value of the card networks over time, and hence incentivize less use of the card networks resulting in less profit for the banks.

I would have taken Air Canada to court though, assuming all the facts are true. A small claims court would have definitely supported them.

Not sure where this person is, but in the US chargebacks exist because they are required by law. There is also an arbitration processs they are required to provide for disputes, which is pretty cheap.

I second this comment. Your chargeback request needs to color neatly within the lines of their procedures if you want a smooth process. How you phrase your request is incredibly important. Do not go crazy on details specific to the situation, use a template.

I have had trouble with charge backs with Chase. Generally, I think they are pretty good to work with, but I would not suggest them for any large purchases.

You are correct about credit card companies, but for whatever reason, Chase has different incentives.

In my experience it’s almost too easy to create a chargeback and the whole system is grossly inefficient and ripe for abuse.

I once called in to make a price protection benefit claim (would refund the price difference of a purchase). The agent assured me it was done and I find out later all they did was create a chargeback and I got refunded the entire price because the merchant didn't respond to it.

The dispute resolution system seems like it gets no investment or attention from any stakeholder, a merchant could easily get DOSd by spam disputes if some sort of consumer protest were organized. That’s how overpowered of a consumer tool it is.

Same experience with an Air Canada ticket here.

Chase seems to be one of Air Canada's credit card rewards program partners[1]. My guess is that this relationship has something to do with Chase's refusal to issue a chargeback.

[1]https://www.aircanada.com/us/en/aco/home/aeroplan/credit-car...

that seems like a stretch to be honest.

These programs are worth billions for larger airlines according to https://en.wikipedia.org/wiki/Ancillary_revenue When there are billions at stake, it does not strike me as a stretch that the credit card partners would bend the rules to benefit their airline partners.

Right! This is why I always chuckle when the HN thought-leaders always say "just do a chargeback" as if it's easy and guaranteed. I've rarely had success doing them.

Anecdotally, I've never had one fail. I've probably done maybe 4 or 5 in 10 years. Though I despise Chase and don't use them, so that may be the key. Amex and Discover are top notch in that department.

The difference is often your bank. Some of my banks don't even have a way to initiate the charge back process (you have to write a free form email), presumably to reduce overhead and to avoid losing cases needlessly, while the others make it very easy with a web form.

This varies country to country. In the UK, direct bank withdrawals (via Direct Debit) are guaranteed forever. Ie. in 30 years time you can reverse a transaction from a company and get all the money instantly, even if the company no longer exists.

My bank doesn't even offer a dispute option in direct debit transactions.

you have to call them.

This bank and banking system specific. My bank (Canada) doesn’t offer any dispute option either.

How does it work if the account is closed, company out of business etc? Does the bank eat the amount? if so, seems easy to abuse.

The bank (or transfer provider) eats the amount. And yes, it gets quite some abuse. It's especially abused against gas and electric providers when they've gone bankrupt since people tend to have paid those companies tens of thousands over many years, and when the provider has gone bankrupt it's unlikely they'll provide any evidence to dispute any chargeback.

Though as a point of interest my small UK-based B2C has seen significant abuse of card chargebacks (i.e., chargebacks issued against legitimate charges and the banks rejecting our dispute) but never a single abusive reversal under Direct Debit, even though in theory the Direct Debit has that indefinite liability attached. I suspect this is because in practice you can issue a chargeback because you didn't like the way someone sneezed and a lot of banks will uphold it while you normally have to give a valid reason to reverse a Direct Debit transaction.

Probably because you can't dispute for any reason. But if there wasn't enough notice. If you don't give 10 working days notice (unless initiated by the person). An immediate refund can be requested.

Bad service isn't a reason for a refund. And if the person doesn't say "This debit was in error. I wasn't given notice" or similar the bank will usually say this is a legitimate direct debit [0] https://www.directdebit.co.uk/DirectDebitExplained/pages/dir...

> NEVER EVER give access to your bank account to ANYONE.

The thing is, that’s the only way to do direct deposit. It makes me uncomfortable too, but that’s been the standard for decades.

You should be funneling income into a separate account and moving it elsewhere after.

I have a friend that is extremely wealthy. He can pretty much buy whatever he wants.

He does this all the time. He has a "cannon fodder" bank account that gets just enough for the expected payments.

I do this as well.

This reminds me to look into a long standing request of mine. I want Chase to give me an account that has no external bank access allowed. Money can only be moved into/out of it from the other Chase account under my ownership. My immediate look a few years ago did not reveal any built in way to make this possible.

To allow someone a direct deposit they should only need your name and bank account numbers. You shouldn't be giving them access with things like your password.

Giving them your name/account number is all that's needed for someone to withdraw from your account. That's how gyms work. They just require your account number and/or a void check (which has your account number). They don't need you to sign into your bank account.

I don't think any responsible bank would let you withdraw using just an account number. What kind of security would that be? My bank certainly doesn't - allowing a debit requires me to authorise via 2FA - they obviously can't just take money.

>I don't think any responsible bank would let you withdraw using just an account number

What do you think a check is? It's a piece of paper with your account number, who to pay, and how much. There's a signature field, but it's not checked too closely (I don't think my bank even asked for a signature sample when opening my account) and signatures are trivial to forge.

> What do you think a check is?

My bank doesn't give me a cheque book any more - haven't see a person use a cheque in about a decade. I can't believe they'd let someone cash a random cheque with no authorisation.

Just guessing by "cheque", are you outside the US? The checking system & ACH might be more of a US-centric phenomenon. It's been busted forever, but it's just how we do things around here.

> It's been busted forever, but it's just how we do things around here.

Which is why the rest of the developed world wonders: So why don't you stop that and catch up to, say, the 1990s?

I do that when people send me money for birthdays once a year. Stick the check in the atm, i get money and the person wasn’t asked.

My bank allows me to deposit a check just by photographing it with their smartphone app. No more visits to ATMs needed.

This is every bank in the United States.

Our payment infrastructure ... has some legacy features.

>> I don't think any responsible bank would let you withdraw using just an account number.

That is literally how checking works in the united states. You can withdraw money from a bank account if you have a routing number and bank account number and "permission." The permission could be a signed check, it could be an auto-pay ACH you set up by handing a paper form to someone, it could be a web-form you signed without looking over the fine-print.

Most extractive companies (e.g., gyms, verizon) have so many fine print and so many lawyers that they can literally take anything from you without recourse. You'd spend tens of thousands in lawyer fees without getting the money back. You could go to the attorney general's office for your state. Good luck with that, unless its a common issue, you just have to eat the cost as part of being American.

Or it could be nothing. In this case, its still on you to figure it out and get the money back in time.

My state prohibits gyms from requiring ACH exactly to prevent this sort of abuse. It doesn't stop them from trying, or structuring their fees.

The gym industry is very predatory and it needs far more regulation.

It should be noted that in the US, some banks will allow you to request a default ACH block/lock on your account, and I highly encourage you to ask for such.

That's not only a States thing. Direct debit works similarly in Europe.

That said I haven't heard of companies or fraudsters abusing it

Direct Debit in Europe has strong guarantees in favour of the customer, e.g. reversing charges.

"A no-questions-asked, fast and simple Refund procedure available within eight weeks of the debit date."

Within 8 weeks of the charge, you just phone (or otherwise) your bank and ask them to undo the charge.

> That's not only a States thing. Direct debit works similarly in Europe.

Maybe it still works that way in some parts of Europe, but in others it has been changed to work differently, or doesn't exist anymore and has been replaced by other systems, depending on how you want to put it.

> I don't think any responsible bank would let you withdraw using just an account number.

It happens in Australia as, just fill up a direct debit form which has the client's name, account number and sign.

Are you talking about the paper forms you find at banks, because they dont work that way.

I got the form from the rental agency which directly debits from my bank account for the rent.

This is not the case in the rest of the world.

Honestly it's absurd that that we have two distinct numbers (account and routing) but you always use both, they don't change, and they are good for both deposits and withdrawals. It would be so easy to only require an account number for deposits and to have a unique routing number for each withdrawal. Maybe for convenience you have some fraction of your assigned routing numbers be good for repeat withdrawals but only for the amount and frequency specified for the first instance. Thus you can hand out your bank account number to anyone without concern, and they can give you money easily, but only those who you legitimately desire to pay can take money from you and their opportunity for abuse is limited, and all the infrastructure remains relatively unchanged.

I assume checks in the USA have the equivalent of sort code and account number printed on them (as well as name of the account holder) like they used to in the U.K.?

Checks in the US have two numbers; the number that identifies the bank, and the account number. That’s all you need to transfer money between bank accounts in the US.

> but there's no chargeback for direct-to-bank withdrawals.

This isn't correct within SEPA (the Single Euro Payments Area). You do need to issue the chargeback within 8 weeks, though. [1]

[1] https://stripe.com/docs/payments/sepa-debit#disputed-payment...

If the transaction was unauthorised (i.e. the collection does not relate to the signed mandate), the payer can ask for a refund up to 13 months after the direct debit.

Is this advice really practical. Where I come from my social identity number is public and not a secret, and my bank info is something we hand out all the time if we want someone to transfer to our account (as it is designed for).

Moving to America and finding out that these two are your top secrets certainly seemed odd at first, but then I found out that no matter what you are doing you always have to give out your at least your SSN, but also your date of birth and sometimes your banking info.

The amount of times you need to give out information which is supposed to be private is so often that for any normal person it is unreasonable to assume they know when their not. That is, there are so many situations where you are unable to refuse handing out this information, that when the time comes where the right thing to do would be to not give out the information, you won’t know it.

This system seems optimized for scams.

It's easy enough to use one of the various online banks to establish a separate bank account for Paypal and the like.

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