Over the past few years Americans have been switching from paper payroll checks to electronic bank transfers. Although electronic systems tend to have fewer errors than physical check cashing, mistakes do happen from time to time. Most bank transfer problems are caused by the individual, not the bank. Modern scam artists are taking advantage of the ease and quickness of bank transfers to commit fraud.
Electronic bank transfers are almost always superior to a physical check. A bank transfer allows almost immediate use of funds deposited into an account. Instead of needing to find a physical location during operating hours, a person can send money at any time of day from a computer. Bank transfers can also eliminate most paperwork, streamlining the transfer process.
When trying to make a bank transfer people often put down the wrong routing number for the type of transaction they want. The American Banking Association assigns a routing number to paper checks, electronic and wire transfers. Sometimes the numbers are the same for all types, but they are usually different. A wrong routing number means it cannot get routed to the proper bank, and is returned.
Although most bank transfers occur within a day or two, some issues are out of a bank's control. If you are transferring money to another country, regional and local banks may observe different holidays than those in the United States. Some countries have such a high incidence of fraud that banks institute heightened security measures to ensure the legitimacy of the transfer. These are called "slow pay" countries.
A majority of Americans have their checks electronically transferred into their accounts. One of the most common causes of a bank transfer problem is a person having wrong account information for the recipient, or in the case of direct deposit, closing an account and not informing his employer. Because the information can be accessed via a computer, these problems are easily corrected.
Bank transfer scams are very common online, especially on auction sites and classified listings. A common scam artist trick is to make offers and pay via cashier's check. The fraudster then sends a phony check for more than the asking price. Claiming a mistake, the con artist asks that the seller wire him the extra money. By the time the bank determines that the check is fake, the scammer has already received his funds.