Submitted via IRC for SoyCow2718
NY Payroll Company Vanishes With $35 Million
This communique came after employees at companies that depend on MyPayrollHR to receive direct deposits of their bi-weekly payroll payments discovered their bank accounts were instead debited for the amounts they would normally expect to accrue in a given pay period.
To make matters worse, many of those employees found their accounts had been dinged for two payroll periods — a month’s worth of wages —leaving their bank accounts dangerously in the red.
The remainder of this post is a deep-dive into what we know so far about what transpired, and how such an occurrence might be prevented in the future for other payroll processing firms.
(Score: 5, Insightful) by maxwell demon on Friday September 13 2019, @11:31AM (30 children)
The question is: Why were they even able to withdraw money from the employees' bank accounts. It was not part of their contract, and therefore they should not have been given the permission. And clearly the bank should not have allowed them to withdraw money without explicit permission by the account holder.
The Tao of math: The numbers you can count are not the real numbers.
(Score: 5, Insightful) by Anonymous Coward on Friday September 13 2019, @12:06PM (20 children)
The money in the bank isn't yours. Neither is any stock you think you own. All the no-coiners are going to find this out when they start doing bail-ins.
https://en.wikipedia.org/wiki/Cede_and_Company [wikipedia.org]
https://en.wikipedia.org/wiki/Depository_Trust_%26_Clearing_Corporation [wikipedia.org]
(Score: 0) by Anonymous Coward on Friday September 13 2019, @12:18PM (1 child)
The only way someone could think this is offtopic is if they fundamentally misunderstand how the world works.
(Score: 1) by anubi on Friday September 13 2019, @10:53PM
My take is the parent posted someone's sensitive info and the moderation was a puerile attempt to sweep it under the rug, quickly, before too many people see it.
However, to do so invites the Streissand Effect.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 3, Interesting) by theluggage on Friday September 13 2019, @01:05PM (6 children)
...nor is that stack of banknotes and coins under your bed (the government can decree them worthless at the stroke of a pen - hyperinflation can do the same without the government lifting a finger) and the local militia will be around to place any gold bullion, fresh water, gasoline and canned food you might have stashed in safe keeping (be sure to get a receipt). Of course, if you're from the USA you can assert your Right to Bear Arms- in which case they'll come back with a fucking tank and take your guns too (never ask the government "you and who's army?" because they've got a really good answer to that...) Even if the economy hasn't collapsed, the debt collectors can still come round and collect that astronomical bill that The Man thinks you owe.
Plus, Walmart never carry enough change to let you break a Krugerrand.... although if the economy has just totally collapsed, just buy a second bottle of water and let them keep the change.
There's a fairly narrow range of eventualities that involve just one consumer-facing bank collapsing without the whole economy going down the toilet, hyper-inflation, seas turning to blood etc.
(Score: 2, Insightful) by Anonymous Coward on Friday September 13 2019, @01:15PM (1 child)
We are reading a story about the bank taking away the money people thought was theirs. It has happened to me before too. If you want an example for what it will look like, look at greece/cyprus bail-ins: https://en.wikipedia.org/wiki/2012%E2%80%9313_Cypriot_financial_crisis [wikipedia.org]
And look at what the POTUS is saying:
Thats right, he wants all the pension funds, etc required to hold people's retirement money in bonds to start paying the government for the right to do so. Just like is already happening in Europe. Your money is already dwindelling away while you worry about EMP attacks or whatever.
The US government didn't decree the value of gold/silver/btc, and doesn't have the power to decree it worthless either.
(Score: 2) by theluggage on Saturday September 14 2019, @01:03PM
You missed a very important bit of that tweet: "... in depreciating the Euro " - the dollar, pound, euro etc. are all fiat currencies that - whether they're in the bank or in cash - aren't worth one bean more than the government decrees (either, in extremis, directly or simply by "printing" lots of new money and forcing up inflation). [wikipedia.org]
No, but in a crisis they can decree that any gold/silver/property that you have belongs to them and make it very difficult for you to spend it - at best, look forward to selling/bartering it on the black market at a fraction of its theoretical value. Meanwhile, doesn't Bitcoin disappear in a puff of logic the millisecond someone briefly attains more than 50% of the mining capacity?
Look, if you want to keep a few scraps of gold and a wad of bills under the floorboards, that's fine, sensible even, and may pay off in some circumstances - but if you take it to the point of eschewing bank accounts or electronic transactions (which is where this thread started) then there's little point unless you're planning to go full "survivalist"... in which case you should stop worrying about the government and start worrying about the other survivalists who may have more guns and less scruples about shooting people than you do.
(Score: 2, Insightful) by Anonymous Coward on Friday September 13 2019, @05:15PM (3 children)
the us military can't defeat the taliban. (no offense to the military, but they have constraints, etc) i don't think they can defeat 140 million americans armed to the teeth. also, the whole military won't fight their own people. your scenario only works when the shit hasn't hit the fan and it's just one group they are targeting. then they can lie about the subjects through the media and kill them.
(Score: 3, Touché) by Azuma Hazuki on Saturday September 14 2019, @12:14AM (2 children)
Why do you think they're working on AI weapons? That's going to be the elites' endgame: deadly weapons that have no pesky human elements like a conscience or unwillingness to kill other humans.
I am "that girl" your mother warned you about...
(Score: 0) by Anonymous Coward on Saturday September 14 2019, @02:03AM
Aren't we the experts in technology? Perhaps, we can direct the bots where they should.
Another and perhaps an easier approach is to make them kill each other. Election interference, email leaks, leaks who leaked them and watch them fight. It is even exiting and enjoyable.
(Score: 1) by khallow on Saturday September 14 2019, @12:27PM
(Score: 5, Interesting) by Thexalon on Friday September 13 2019, @01:18PM (10 children)
The money in the bank is yours so long as the laws are still functioning. And if the laws aren't functioning, then your Bitcoins are far less valuable than my food, water, guns, ammo, good relationships with my neighbors, heating fuel, and (in a longer term scenario) arable land. I'm not trading things essential for my survival for any number of Bitcoins, because I know full well that being dead with a bunch of Bitcoins doesn't make me any less dead.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 0) by Anonymous Coward on Friday September 13 2019, @01:27PM (7 children)
This is the second response that ignores the fact you are commenting on a story that proves you are wrong. Stop with the canned responses and look at reality.
(Score: 4, Insightful) by Thexalon on Friday September 13 2019, @01:46PM (6 children)
This story doesn't prove I'm wrong: The legal entity and person that stole the money in this case are on the hook for repaying it, and in the meantime the banks are on the hook for allowing the reversal of deposits that didn't happen.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 1, Insightful) by Anonymous Coward on Friday September 13 2019, @02:03PM (5 children)
"On the hook" meaning if the people who got screwed can pay the lawyers more they will get some of their money back... eventually.
(Score: 4, Insightful) by Thexalon on Friday September 13 2019, @05:19PM (4 children)
Whereas there have been multiple instances of people's Bitcoin being stolen by the management of the exchange they stuffed it in, and now it's just plain gone, lawyers or no lawyers. I'll take the option of lawyers and civil courts, as well as regulators like the OCC and FDIC, over everyone attempting to stuff Bitcoins in their virtual mattress (and subject to theft by anyone with access to that hard drive), or pseudo-banks that follow the rules of 1920's S&Ls if they follow any rules at all, thank you.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 1, Informative) by Anonymous Coward on Friday September 13 2019, @05:31PM (3 children)
You obviously do not understand bitcoin. You can store it like a bearer bond if you want, or memorize a seed and store it mentally. If you give it to someone else to keep for you then that is between you and them.
(Score: 2) by hemocyanin on Friday September 13 2019, @10:17PM (2 children)
And that is different than cash? The issue here is that people gave other people money to move around and it appears to have been stolen somewhere in the moving around process. At least here there is some hope of getting the money back, unlike bitcoin exchanges. Secondly, a person can use their cash, or real coins, even when the power goes out and the internet goes black.
(Score: 0) by Anonymous Coward on Friday September 13 2019, @10:53PM (1 child)
The government can inflate away the value of your cash to zero.
(Score: 2) by legont on Saturday September 14 2019, @02:08AM
Just remember the definition: "money is a commodity used for exchange". Commodity. Something evenly useful for everybody in regular life. Everything else around is rust and stardust.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
(Score: 2) by sjames on Friday September 13 2019, @07:07PM
To be fair, apparently the laws aren't functioning. Just ask the people who saw a month's pay yanked back as if it was never theirs.
Of course, you're correct that Bitcoins have no intrinsic value whatsoever.
(Score: 0) by Anonymous Coward on Friday September 13 2019, @10:30PM
Good call. The smart thing to do is horde bottle caps.
(Score: 3, Interesting) by Anonymous Coward on Friday September 13 2019, @12:27PM (1 child)
Direct deposit is basically check processing without the check. It's possible for an originating bank to reverse a deposit that they've made, just like it's possible for a check to bounce and the funds to be removed from the depositor's account. In this case they sent a malformed reversal request that by rule wasn't supposed to be accepted, but knowing that some banks might accept it anyway. And they did, allowing the payroll company to abscond with the money while also laying some of the blame on the receiving bank. Clever bit of fraud, that.
(Score: 0) by Anonymous Coward on Friday September 13 2019, @12:29PM
And there is no time limit on this.
(Score: 1) by nitehawk214 on Friday September 13 2019, @08:18PM (4 children)
That is how our financial system works. Any company with access to your bank account and routing number can empty out your account. The banks will be able to reverse all the charges, no employee will have to take the hit for this; but they will make it as bit of a hassle for the victims as possible, because that is what banks do.
Any individual with those two pieces of information can print a check with a name of a fake id and write paper checks against our account. Don't write a paper check against an account unless you are willing to go through the annoyance of that account being emptied out.
"Don't you ever miss the days when you used to be nostalgic?" -Loiosh
(Score: 2) by maxwell demon on Friday September 13 2019, @09:35PM (3 children)
So the problem is that the US are still stuck deeply in the past? Here in Europe, nobody would even consider writing a check these days (actually, I'm not even sure if you still can).
The Tao of math: The numbers you can count are not the real numbers.
(Score: 2) by hemocyanin on Friday September 13 2019, @10:23PM
Maybe. When I want cash I go to my bank, ask for a counter check, write in my name, account number, amount, and make it out to cash. Then they give me cash and only my bank has the check -- anyone at the bank is supremely capable of messing with any account they want so I don't see that as excessively risky. I haven't had a debit card in maybe 20 years now. I get that there are protections of some sort when you use one, but the problem starts with your account getting being debited and you trying to get that fixed. Just seemed like an unnecessary risk to me. For card based transactions I use a credit card -- that way if someone uses it illegally, the problem starts at the bank and while a hassle, at least I still have all my cash in the meantime.
(Score: 3, Insightful) by legont on Saturday September 14 2019, @12:59AM
All it takes is a short text message known as SWIFT with an easily remembered code 101.
P.S. If one wants to make it more efficient, 102 transfers multiple accounts.
P.P.S. No, it is not encrypted.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
(Score: 1) by nitehawk214 on Saturday September 14 2019, @03:42PM
This is for certain. And the financial stuff is only the tip of the iceberg.
"Don't you ever miss the days when you used to be nostalgic?" -Loiosh
(Score: 1) by khallow on Friday September 13 2019, @11:54PM
Because people make mistakes. If someone from the payroll company transfers $10k by accident instead of your $5k paycheck, they can move the erroneous amount out immediately without causing a fuss.
It's always a part of their contract.
The bank would always have that explicit permission from the account holder because the bank wants to cover their ass as well.
(Score: 0) by Anonymous Coward on Saturday September 14 2019, @02:14AM
1) MPHR used a faked authorization to transfer payroll funds from the employers to an account they controlled instead of the authorized escrow company's account.
2) They then payed the employees from this account.
3) They then issued chargebacks against the employees multiple times. In once case they charged back $1,000,000 against a single paystub.
4) They then emptied their fake escrow account and walked.
1 made the scam possible in the first place. 3 meant they were able to steal far more than what the employers were taken for. Both indicate major problems in the underlying banking system.