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> Their second-to-last paycheck, already deposited, evaporated out of their bank accounts. Wait how is this possible? Doesn’t your own bank represent you? On w

> Their second-to-last paycheck, already deposited, evaporated out of their bank accounts. Wait how is this possible? Doesn’t your own bank represent you? On what basis can bank transfer he reversed. Here in Australia the employer generally can never reverse funds out. If say someone gets double paid you’d just have to leave it there and adjust what you pay in the next pay run.

ceejayoz 7y ago
ACH transfers can definitely be reversed in the US.
situational87 7y ago
Yeah if it's suddenly possible and legal for employers to start withdrawing from their employees accounts via direct deposit or something else then we have much bigger problems. Your bank doesn't represent you, where did you get that naive idea from? I'd think a decade of Wells Fargo actively trying to rob their entire customer base in a blatantly illegal and out in the open scheme would shatter any of those illusions.
- SantalBlush 7y ago
  My public accounting prof. did a lot of consulting for smaller banks. Early in the semester, he made the entire class raise their right hand and repeat "Banks are not my friend" three times. He then advised us on things like keeping our checking account in a separate bank from our mortgage, etc. That lecture alone made the class worth the price, imo.
- evolve2k 7y ago
  Although banks are banks no matter where you live. In Australia with have the “Australian Consumer & Competition Commission” (ACCC) which is a government agency and related consumer protection laws that have real teeth. Although banks are probably regulated under separate legislation it’s usual to be able to call companies to account that engage in “misleading or deceptive practices” for example. So I suppose I got the idea from living where I do. More info: https://www.accc.gov.au/consumers/consumer-rights-guarantees https://www.accc.gov.au/consumers/consumer-rights-guarantees
deleted 7y ago
[deleted]
ryanmercer 7y ago
The checks were deposited they did not clear. Depositing does not mean the funds are, or will be, available. https://www.heraldcourier.com/news/local/resource-session-held-for-blackjewel-employees-impacted-by-bankruptcy/article_9cd4a479-2459-524d-8587-d7757e69654a.html https://www.heraldcourier.com/news/local/resource-session-he... > and their paychecks from the end of June bounced, leaving many with negative bank account balances.
rtkwe 7y ago
It's not clear how long ago the check was deposited but maybe it was stuck in pending. Direct deposits can show up in accounts before they're 100% processed through the transfer system so maybe they were in a pending state then when the company closed up all the pending transfers were canceled?
house9-2 7y ago
> Here in Australia the employer generally can never reverse funds out. Not sure of the logistics but in USA direct deposit or ACH can be reversed without any authorization from the account holder. One of my clients erroneously deposited somebody else's payment into my account, when I let them know they said they would fix it, I was surprised it didn't require any authorization from me, but it was gone the next day.
- evolve2k 7y ago
  Probably silly question. But is there any benefit then in always quickly moving your funds out as soon as they come in? 1. What if I quickly withdrew the funds as cash (inconvenience aside) 2. If I transferred (auto-transferred) the funds to a second account be it same bank or different bank. What then?
  - dymk 7y ago
    You get charged a negative account balance penalty
  - nradov 7y ago
    The safest approach is to immediately cash the check at a branch of the bank on which the check is drawn. It's more difficult for bankruptcy trustees to claw back cash (although in theory they may have the legal right to do so in some cases). Unfortunately some banks will no longer cash their own checks if you don't have an account there.
CocaKoala 7y ago
I'm guessing the checks were drawn on an empty account? Banks will commonly front you the money before the check clears so that you have the money available before the longer process of the check clearing is completed. See also: The common scam where somebody purchases an item from you and sends you a check, but the check is for more than the item cost; they ask you to send them the item plus the extra money the check was for. You deposit the check, pull out the extra, send it along with the item, and a week later the check bounces (or is discovered to be fraudulent), and the bank removes the money from your account, and they obviously don't refund the amount you withdrew to send to the scammer. It doesn't normally happen with payroll checks, but it's not an unknown mechanism. If there's no money in the account that the check is drawn on, the bank won't furnish money out of the goodness of their hearts for the recipient.
NoNotTheDuo 7y ago
IIRC, ACH Deposits are also often pre-auth'd. When I worked at a Credit Union in college, we would get an ACH file that had preauth'd ACH deposits - usually from employers - and we would go ahead and credit the account that day. The actual deposit would come in the next business day.

ceejayoz 7y ago

ACH transfers can definitely be reversed in the US.

situational87 7y ago

Yeah if it's suddenly possible and legal for employers to start withdrawing from their employees accounts via direct deposit or something else then we have much bigger problems. Your bank doesn't represent you, where did you get that naive idea from? I'd think a decade of Wells Fargo actively trying to rob their entire customer base in a blatantly illegal and out in the open scheme would shatter any of those illusions.

SantalBlush 7y ago
My public accounting prof. did a lot of consulting for smaller banks. Early in the semester, he made the entire class raise their right hand and repeat "Banks are not my friend" three times. He then advised us on things like keeping our checking account in a separate bank from our mortgage, etc. That lecture alone made the class worth the price, imo.
evolve2k 7y ago
Although banks are banks no matter where you live. In Australia with have the “Australian Consumer & Competition Commission” (ACCC) which is a government agency and related consumer protection laws that have real teeth. Although banks are probably regulated under separate legislation it’s usual to be able to call companies to account that engage in “misleading or deceptive practices” for example. So I suppose I got the idea from living where I do. More info: https://www.accc.gov.au/consumers/consumer-rights-guarantees https://www.accc.gov.au/consumers/consumer-rights-guarantees

deleted 7y ago

[deleted]

ryanmercer 7y ago

The checks were deposited they did not clear. Depositing does not mean the funds are, or will be, available. https://www.heraldcourier.com/news/local/resource-session-held-for-blackjewel-employees-impacted-by-bankruptcy/article_9cd4a479-2459-524d-8587-d7757e69654a.html https://www.heraldcourier.com/news/local/resource-session-he... > and their paychecks from the end of June bounced, leaving many with negative bank account balances.

rtkwe 7y ago

It's not clear how long ago the check was deposited but maybe it was stuck in pending. Direct deposits can show up in accounts before they're 100% processed through the transfer system so maybe they were in a pending state then when the company closed up all the pending transfers were canceled?

house9-2 7y ago

> Here in Australia the employer generally can never reverse funds out. Not sure of the logistics but in USA direct deposit or ACH can be reversed without any authorization from the account holder. One of my clients erroneously deposited somebody else's payment into my account, when I let them know they said they would fix it, I was surprised it didn't require any authorization from me, but it was gone the next day.

evolve2k 7y ago
Probably silly question. But is there any benefit then in always quickly moving your funds out as soon as they come in? 1. What if I quickly withdrew the funds as cash (inconvenience aside) 2. If I transferred (auto-transferred) the funds to a second account be it same bank or different bank. What then?
- dymk 7y ago
  You get charged a negative account balance penalty
- nradov 7y ago
  The safest approach is to immediately cash the check at a branch of the bank on which the check is drawn. It's more difficult for bankruptcy trustees to claw back cash (although in theory they may have the legal right to do so in some cases). Unfortunately some banks will no longer cash their own checks if you don't have an account there.

CocaKoala 7y ago

I'm guessing the checks were drawn on an empty account? Banks will commonly front you the money before the check clears so that you have the money available before the longer process of the check clearing is completed. See also: The common scam where somebody purchases an item from you and sends you a check, but the check is for more than the item cost; they ask you to send them the item plus the extra money the check was for. You deposit the check, pull out the extra, send it along with the item, and a week later the check bounces (or is discovered to be fraudulent), and the bank removes the money from your account, and they obviously don't refund the amount you withdrew to send to the scammer. It doesn't normally happen with payroll checks, but it's not an unknown mechanism. If there's no money in the account that the check is drawn on, the bank won't furnish money out of the goodness of their hearts for the recipient.

NoNotTheDuo 7y ago

IIRC, ACH Deposits are also often pre-auth'd. When I worked at a Credit Union in college, we would get an ACH file that had preauth'd ACH deposits - usually from employers - and we would go ahead and credit the account that day. The actual deposit would come in the next business day.