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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.
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NY Payroll Company Vanishes With $35 Million
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Either I'm dead or my watch has stopped.
-- Groucho Marx's last words
(Score: 2) by Fishscene on Friday September 13 2019, @02:04PM (6 children)
That's a smart move. Maybe I should do the same. Basically, just set up a proxy account who's sole function is to receive money and dump it elsewhere. If there's anything withdrawn out of it, it's automatically fraud.
I know I am not God, because every time I pray to Him, it's because I'm not perfect and thankful for what He's done.
(Score: 2) by RS3 on Friday September 13 2019, @03:00PM (4 children)
Generally yes, do it. Even better is to make sure the bank does not cover or insure overdrafts, or make sure you can remove that protection. And don't keep money in another account in the same bank. I found out once that my bank did automatic overdraft covering and covered something they should not have, taking money from another account with a fat fee. I was not aware of that mechanism being in place. It may be that you can't stop that action, so just only have one account in the proxy bank.
IANAL, but we laypeople use terminology that has real meaning in certain contexts, like medical, psychological, engineering, IT, etc. Case in point: "fraud" is a common word we all use, but to prove legal fraud is quite difficult, and most people who commit fraud would have a CYA in place, and easily chalk it off to "oops, human error", or "oops, computer error".
Another proxy I use: I don't have a credit card (too many reasons to list) but I do have a major debit card I use to buy online. It's a little annoying, but I prefer lower risk. Credit cards have much better protections, but I don't have that. Anyway, point is: again, proxy account with no paper checks and no overdraft protection. If the funds are not there, the transaction is refused, no fees or penalties (so far...)
My bank does protect my debit account- I once tried to buy something on ebay and it would not complete. Tried over and over, called paypal, ebay, bank, over and over, got upset, nobody would tell me anything. Turns out some secretive 3rd party security company scans all transactions and blocked it because the seller was a fraud. Yay! Except it was a major pain to get someone at the bank (VP) to tell me all of this and tell me who to call to fix it. Frustrating, but nice to know it's there and works when needed. :)
(Score: 1, Insightful) by Anonymous Coward on Friday September 13 2019, @03:38PM (3 children)
That's nuts.
The way the law works here, is that if someone charges your credit card without your authorization they have defrauded the bank, not you. You check your statement, walk into the bank, slap it on the counter and say "this transaction was not authorized". They make you sign a stat dec and immediately credit your account. The bank then rips the money back from whichever merchant account accepted the transaction (along with some hefty fees, I suspect). The merchant can go after the crook or not as they please, nobody else cares.
If someone charges your debit card without authorization the bank will say "meh, sucks to be you. Here's the account the money went to, good luck chasing it."
(Score: 4, Interesting) by curunir_wolf on Friday September 13 2019, @06:27PM (1 child)
Yea, that's the way it's supposed to work.
I had a fraudulent charge from NewEgg once. I did have an account there, but did not order those items. They were shipped to another state. Also, the charge was not on my NewEgg account, but it WAS using a credit card that NewEgg had on file with my account. So the first issue is that NewEgg should NOT have allowed a charge on a separate account for the same card. Seems like a simple fraud check to implement.
Anyway, reported to the bank, and got it credited. Then, a week later, they took it back out. It seems NewEgg responded to the fraud report by claiming it was a legitimate charge. Different shipping address, card used on an account with a different name on the card, everything, but still claimed it was legit. The bank (or someone) apparently bought that (bogus) explanation so reversed the fraud reversal.
I had to file an appeal at the bank. I documented everything. The name was different, the shipping address was one I never used. The address for the card was mine, but I had moved from that address 2 years prior and the bank had my address current, etc. Lots of paperwork, submitted to the bank.
Nothing happened. I followed up, the bank followed up with where it went, I contacted NewEgg, who refused to take any responsibility for it. The bank kept getting the run-around about the appeal. This went on for several months (WAY past the 60-day maximum for responding to the appeal.
Here's what finally got action: We posted about it on Twitter, calling out MasterCard as the entity. Backed it up with a blog post with redacted documents, but enough to tell the story. The day after the Twitter post someone from MasterCard contacted us by DM, then by phone. Still took a couple of more days, but they finally got it cleared up, and the money was back in our account.
If it wasn't for our ability to expose MasterCard for malfeasance in public that way, I doubt we would have ever gotten our money back. It wasn't enough money to be worth hiring a lawyer to handle.
I am a crackpot
(Score: 3, Interesting) by nitehawk214 on Friday September 13 2019, @08:25PM
I got the same runaround from a bank for weeks until posting about it on social media. Problem fixed and money returned that day after a call from a bank manager an hour later.
Apparently name and shame is the only way to get corporations to give any shits.
"Don't you ever miss the days when you used to be nostalgic?" -Loiosh
(Score: 2) by RS3 on Saturday September 14 2019, @03:41AM
I don't understand your reply to my comment. You said "that's nuts"- do you mean you don't agree with what I wrote? Because I wrote the exact same thing. If you don't understand what I wrote, then you're the same AC who keeps misunderstanding me.
I said I use a debit card, and I don't have the same protection as a credit card. Right?
Which is why I keep very little in the debit card-attached account, so that if it gets stolen, it's not much money- not a big loss.
Could you explain how my statement differs?
(Score: 2) by legont on Saturday September 14 2019, @02:17AM
That's exactly how I receive my paycheck. Actually, I have it deposited on two different accounts in different banks and then I automatically move the funds where I usually have my money. All of the accounts have alerts on anything above $1.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.