To avoid these scams, deal only with businesses you trust.

Little Charges Can Grow Into a Big Problem. Even if each automatic withdrawal is for a small amount, over time, these charges can really add up and some victims may not discover the scam for months.

Protect Your Accounts From Automatic Withdrawal Scams

If you’re charged every month for a service you didn’t sign up for – or one you canceled – you could be the victim of an automatic withdrawal scam.

Authorized automatic withdrawals from your financial accounts for things like a gym membership, car loan payments, or other long-term services can make bill paying so much easier. They may make it easier for criminals to steal your money, too. Here’s how to watch out for automatic withdrawal scams and ways to stay protected.

How Automatic Withdrawal Scams Work

For a business to withdraw funds, you don’t always have to sign a check. They need only your account information to make what’s called a demand draft. It’s easy and simple to do, and scammers count on that simplicity to trick you into giving them access to your money. But, by law, you must provide authorization first. An automatic withdrawal scam can happen in a few different ways.

1. Free Trial Offer

You sign up for a free trial offer and are asked to provide your account information. But even if you cancel before the free trial ends, the business keeps charging you. It may just be a small amount, but over time, these charges can add up.

2. Credit Card Offer

You get an offer for a loan or credit card for people with bad credit. The catch? You have to provide your checking account to verify you have a relationship with a financial institution. Once you provide it, the scammers make withdrawals from your account.

3. Prize Winnings

You’re told you’ve won a phony prize or lottery winnings – but you need to provide your banking information to take care of taxes or process fees. No prize is forthcoming, but funds are withdrawn from your account.  

How to Protect Yourself

To avoid falling victim to an automatic withdrawal scam, you can do the following:

• If someone calls and requests your account information for verification purposes, DON’T provide it. You should only have to provide your financial account information to a business if you plan to pay them directly from your account. 
• Be sure to read the fine print for any offer, and make sure you know how to cancel the service.
• If filling out an online form, uncheck any boxes that sign you up for automatic billing or an extra service you don’t want.
• Make sure the business is trustworthy. A quick online search will help you check their reputation.
• Monitor your checking account for unfamiliar transactions. If you discover unauthorized charges – or worse, discover your account is overdrawn because of them – act immediately.

How to Stop Unauthorized Withdrawals

For unauthorized withdrawals, you have certain protections that could help you avoid financial liability –

IF you act promptly. Take the following actions:

• Notify your financial institution of any unauthorized charges. They may ask you to provide an affidavit of unauthorized use.
• You can also make a stop payment request with your financial institution to prevent a future charge. Keep in mind that there may be a fee for this service.
• If you previously authorized automatic withdrawals but want to stop these payments, reach out to the business right away.
• Follow up in writing so you’ll have documentation to show you revoked authorization to debit your account, and remember to keep a copy of this request.
• If a business doesn’t comply, contact your financial institution for help.

What to Do If You’ve Been the Victim of a Scam

Here are some steps to take if you’ve been scammed:

• Submit a complaint to your state attorney general at NAAG.org.
• File a complaint with the Federal Trade Commission at ReportFraud.FTC.gov.

To avoid these scams, deal only with businesses you trust and know how to spot a possible scam – so if an offer seems like a trap, you won’t fall for it. To learn more about protecting your information, talk to your Fidelity Banker today.