Ridiculous or not? Airline wants my bank account information By Christopher Elliott | August 24, 2011 British Airways lost Jean Perrotti’s luggage, and it stayed lost for six days. But that’s not why she contacted me. “Aside from the fact that they are asking for information I already sent to them, they are also requesting my banking information,” she says. “Their reason is that if they decide a settlement is due, the fastest and most secure way to settle my claim is by bank transfer.” Perrotti wants to know: Is it OK to give the airline her bank account number? By account number, British Airways means the 9-digit ABA routing number that identifies your financial institution and your checking account number. This information appears on every check you write, so everyone you’re doing business with has access to it. British Airways’ refund policy is spelled out in its General Conditions of Carriage. Interestingly, section 10 f suggests that if you paid the airline by credit card, it will refund you by credit card – in other words, there would be no need to supply your bank information. When I lived in Europe, bank account information was given out freely. If I wanted to pay someone, I would ask for their account information and then send the money. No one thought twice about it, because you could only send money to another account, not withdraw from it. “In Germany, bank information, including the bank name, account number and routing number, is on each company letterhead, with information like name, address and phone number,” says reader Moshe Leib. When Kerry Cushing visited Turkey recently, account numbers were also used in a fast and loose way. “It seems to be a routine thing for money transfers there,” says Cushing. “We had no problem. The money arrived and nothing further was noted.” Michael McGown, a reader from Austin, Tex., says even in the United States, giving out a bank account number should be safe. Or at least, “As much as anything else these days.” He points out that any bank routing number can be looked up just by doing enough Googling, or going straight to the American Bankers Association or downloading the Mars banks database. “At least in theory, transactions can go into but not out of an account with the routing and account number pair, and fraudulent transactions are protected,” he says. “In James Bond movies, money can move in all directions. But in real life, banks generally don’t let money go out of an account without some kind of verification.” Still, not everyone is comfortable with disclosing this information. “I can think of no value in giving out that number to anyone,” says Jeff Paintner, a reader from New York. He prefers the more secure method of money transfer his bank, JP Morgan Chase, offers online. “The receiving individual receives an email that money is being transferred to them,” he says. “They then accept the transfer. The receiver never sees the routing information.” In a society where identity theft runs rampant, I can understand why anyone would think twice before surrendering details of their bank account. I like JP Morgan Chase’s way, which is a lot like PayPal’s. British Airways ought to offer several payment options, like any good business. But it could be worse. It might not compensate Perrotti for her lost luggage at all. Christopher ElliottChristopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or contact him at firstname.lastname@example.org. Got a question or comment? You can post it on the new forum.More Posts - Website - Twitter - Facebook - LinkedIn - Google Plus john4868 First, this is a settlement not a refund so it is handled differently. Assuming that Jean doesn’t have a way to receive credit cards (and pay the fees associated with them), the only real way for her to receive payment is by check or wire. Wire’s are almost always faster and cheaper,for BA, especially since its coming from overseas. Her choice but she can always hold out for a check. Kim6160 Between the high fees for wire transfers, concerns about identity theft from checking account info, and the inability to get a chip and pin credit card in the States, traveling to Europe is becoming a greater pain every year. Sam Varshavchik I think it’s worth the shot going back to the airline and ask them if they can send the refund to the original credit card, or whether this can wait until they actually have a settlement offer in hand. There may be some other options to explore. Some credit unions may offer an option to set up subaccounts, that are tied to your main account, but carry their own balance. Give the airline the subaccount. Nobody will be able to pull any money out of it, since the account has no money, and when they ACH or wire the money into it, it can be quickly transferred to the main account, and then quickly closed. Some online-only banks can also be investigated. They typically have low-to-nonexistent minimum balances, and offer convenient ACH transfers to/from your main bank accounts, that clear in 1-2 business days. Elmo Clarity In the story, it is not stated if they paid by credit card or not. In any event, they shouldn’t be asking for the bank info unless they are ready to pay that day. Personally, I would never freely give my banking info to anyone and I tend not to use checks at all. I use my banks online bill payment where they use a bank’s account to send checks so my info is never exposed. I learned this lesson the hard way when I had a business use the info on a check I gave them to withdraw money from my account without permission as a “convenience” for me so I wouldn’t have to send them any more checks. You can bet I got my money back and never did business with them again after that. Mark You might not like it, but any time you write a check to anybody, they get these numbers. So they are no big secret and there’s no point in refusing to provide them to a corporation. I might not provide them to the Nigerian e-mailer who wants to give me his aunt’s billion dollar estate, though. JoeJ OK Chris, this one is much ado about nothing. Your checking account number is on every check you write. So how is giving it to a big company any different than sending a check to your utility company. I prepare tax returns and always chuckle when clients don’t want to give their bank info to the IRS to direct deposit their refund. News flash…the IRS KNOWS your bank info…the bank is required to tell the IRS about your bank account (assuming you are earning interest). Bob In this case, I’d be comfortable giving the info to BA. Here are some things to think about: 1. Make sure it really is BA that you’re giving the info to. Verify the address either on BA’s website or by calling BA’s customer service line and asking if the address is legit. 2. The consumer protections for ACH debits are pretty decent, even should BA attempt something fishy. If you see a debit that you don’t recognize, report it to your bank immediately. You’ll be fine. Lclar It’s on all of my checks – hardly “secure” or “confidential”…. johnb78 As a Brit living in Australia, I think this is mainly a cultural difference moment. In the UK, mainland Europe or Australia, you’d think nothing of giving your bank account details to a company, or even an acquaintance who owed you money: domestic bank transfers are free, and there’s no way you can use bank account details to steal from someone. (to prove this point, British TV show host Jeremy Clarkson gave out his bank details in a column in the London Times. To make a point against him, someone used the details to set up a payment from his account to a major registered charity. However, the only way this works is to pay an organisation that’s registered as a major bill-paying organisation with banks – for unapproved person-to-person or person-to-SME transfers, you can only put money *in* the account. So you can annoy someone by transferring their money to the National Institute for the Blind, but you can’t steal it, and the NIB will obviously give the money back as soon as the victim complains). However, in the US, person-to-person bank transfers haven’t caught on to the same extent (which is why you guys still use PayPal), due to fees and lack of willingness on the part of the banks. So there’s still a wariness about getting involved. If BA were a sensible business, given that a lot of its business consists of flying Americans to Europe, Africa, the Middle East and Asia, it would recognise this cultural difference and introduce a different policy for the US that didn’t make people freak out. So nobody *should* be worried about this, but it’s reasonable to expect that Americans might be worried, and BA shouldn’t require it from its US customers. Ces97 While it doesn’t hurt to be cautious with this info, I have to agree that it is pretty readily available and safe to be provided to someone whose identity you can verify and trust. In fact I like that they are willing to do this rather than send a check or money to a credit card. If the OP was at her destination and without luggage, a check wouldn’t do her much good as she would have to lay out money in the meantime, something she may not be in a position to do. As this is possible compensation and not a refund, I don’t know if posting to her credit card would even be allowable (would be like a third-party making a payment on her card). Also if she has a balance on the card she would then be stuck with that money applied to that balance and not free to use for replacement items she needs. If she is carrying no balance she might be able to get the credit card company to issue a check, either way she is forced to use to layout money or use that card for her purchases and face foreign transaction fees. Getting a payment into her bank account seems the best way to get the money quickly and if her bank is international, maybe avoid transaction fees on withdrawing the money while still overseas. Rosered7033 While I understand that most of my “private” financial and personal info is readily available online or at the local gov’t. municipal building, I bristle at providing more than is absolutely necessary. There are crooked businesses, people, and gossips, and the less they know about me the better. If it’s “no problem”, why do we shred our bank info? And didn’t our Social Security number used to be commonly available? Clare I’m still hung up on a phrase in the first paragraph: “if they decide a settlement is due.” Let’s rewind and write a new phrase suitable for a Customer-Service Oriented World: “WHEN they give this traveller the compensation which is due to her, they will ASK her what method of payment she prefers.” Ya think? What I’m seeing here is, BA hasn’t had the courtesy yet to agree to remunerate this customer for THEIR screw-up, yet they are already telling her–not asking her–to fork over her personal financial information. Because they MIGHT use it, if they want to. But then again, they might not. As for the argument about a cultural disconnect, because in the UK it’s more common to ask for and give out one’s bank numbers… this is BA we’re talking about, not some mom-and-pop corner store in the English sticks that never had an American customer before. You mean to tell me that they don’t have a clue about the alarm-bells that go off in an American’s head when a stranger asks for this information? I don’t believe it. The entire tourist industry knows the customs and quirks of particular countries whose citizens travel frequently–I’ve refused for security reasons to email my credit-card info to small hotels in both Portugal and Italy in response to their requests, and they were completely understanding. Good grief, I was on a Greek cruise-ship a few yrs back and they gave me a WASHCLOTH, for crying out loud, because they knew that Americans, unlike Europeans, find that a bathroom necessity! If BA isn’t aware of American issues like identity-theft and the consequent concerns we have about security, they’ve got deeper customer-service issues than we may realize. Andrew Shepp A credit or debit card transaction can be disputed, interbank transfers using the ABA and account number cannot. However it is very wearisome to arrange bank-to-bank transfers, there is often a week long delay and a “test” transfer of a small amount of money to be sure it will go through. Unless you are using the same bank. http://www.facebook.com/profile.php?id=1556838763 Nancy Marine Dickinson This was actually a yes and no question – with it depending on who is doing the asking. Recently, we suffered a lightning strike to our home. The insurance company asked for our banking information for reimbursement. Yes, I gave it to them. However, when I contacted people we pay bills to so I could let them know, due to the loss of our internet in the strike, that I would be delayed paying pending getting the people out here to fix it, one of them asked for my banking information so they could get the money themselves. I told them a firm, big fat “NO”. I even followed that one up with, “Wow, you can see ‘idiot’ on my forehead through the phone?” I think it really depends on the person doing the asking. I don’t know what I’d have done in this situation at all. The reasoning “seems” reasonable but money from Nigeria from a prince seemed reasonable to some people. Asiansm Dan It’s very common practice internationally. If you are not comfortable of it, use a separate account for this kind of operation. It help to save times and Bank fees for the 2 sides, not counting the cost of issuing a company check which is around 12$. SoBeSparky A bit of information here and another bit there, sooner rather than later the entity will have plenty of info for identity theft. Then the airline wants the passport number, perhaps. Then someone else requires your Social Security number? Finally, your place and date of birth is give away in a “secret clue” on some website. Presto! Bingo! This is plenty of info for a very elementary identity theft. Don’t even bother checking your account balance. It was overdrawn yesterday. john4868 Actually … While ACH transfers cannot be disputed, they can be reversed if fraud occurs and use of the system for fraudulent means denotes wire fraud. Its the same system as your check flows through If money is withdrawn, you just have to ask to see the authorizing signature. If it doesn’t match the bank’s signature card, they reverse the transfer. http://www.bluegreenonline.com Henry Williams this is a very common procedure and i dont think its ridiculous its just another obstacle you have to go through now wen booking a flight Steve R I don’t see anything to make me nervous from an identity theft perspective. As others have pointed out, your routing number and account number is at the bottom of every check you write (if you still write them). And British Airways is a big enough and reputable enough business that I wouldn’t be too concerned. However, I don’t see why they need that information before they’ve decided that they’re actually going to compensate her. Why should she spend any of her time sending them her bank account information until they are ready to compensate her? Mleib I will not do it in the US, you can’t trust a bank in this country, the only way that I will handle this will be with something like CHASE’s quick pay that uses email address. LarryB In this case, it should be OK. She hasn’t given BA authorization to charge her account and any attempt to do so would make them liable for damages. In the US, lots of companies offer the service of automatic debits. Call me suspicious, but I’m not going to give anyone the green light to charge my account directly. Too many companies make too many mistakes, and having that electric bill hit 5 or 6 times might just be enough to rack up hundreds of dollars in overdraft fees, plus the nightmare of trying to fix it. No thank you. Edlboston While BA may be a reputable business, how many other “reputable” businesses have been hacked lately with the hackers getting billing info? Why give anyone this type of info unless absolutely necessary. It bothers me that businesses keep my credit card info when I swipe my card. Not giving anymore than I have to. http://pacificcarrentals.com Pacific Car Rentals I think in this unique case it would be fine to hand out banking information, however here where identity theft is such a huge problem I can understand being leery about handing it out. Sadie Cee Although your bank account information can already have fallen into the hands of several unauthorized entities, there is such a thing as being too trusting. Many legitimate institutions have dishonest employees. Ask BA to reimburse you by means of a cheque or have them credit your credit card account if your card was used. This is a “one-off” transaction which can be handled without parting with too much personal information. Here we have to worry about our accounts being used to launder the proceeds of crime or to have our accounts depleted that the use of cheques manufactured fraudulently. http://pulse.yahoo.com/_LOCND3JAJL4PGYWJBHUT3HWAZM web/gadget guru Banks in the USA are the last people you should trust! To do so, is a fools folly! S E Tammela America’s (and the UK’s, and Australia’s) obsession with hanging on to cheques is ridiclous and pathetic. Move on: the rest of the world is phasing them out. Here in Finland, they’ve been obsolete for around 20 years, so nobody can do a thing with my bank info, because they simply can’t write a fraudulent cheque to empty my account. Until people pull themselves out of the dark ages and switch to electronic systems, those ancient bits of paper will still exist as a means to rip people off. Mark K How many of you who said “NO” have your monthly bills directly debited from your account? How many have direct deposit for your paycheck? We share this information with more companies than we think. I am choosy about who all I give permission for direct debit to and mostly only have fixed monthly bills set up for that. This is to avoid surprises like when the phone bill is more than expected. I would hope that the OP would verify that this is really BA asking, but beyond that I would have no problem with giving them my information. And I think that after BA finds out it is a US bank, they might issue a check anyway. If the loss report was filed in the UK, BA might think that the person making the request is a UK citizen and that is why they are requesting the bank info. If BA sticks to the bank info routing option, you can check with your bank to see if they would allow a second checking account that would only be open until the credit is posted. If you have a friendly bank, it shouldn’t cost extra for a couple months. The account can be closed as soon as the credit is posted and moved to the permanent account. Mark K No one would write a check to empty your account anyway. In the US, they would use your account info from the check to do an electronic withdrawal into an account that would immediately close as soon as your money gets there. Checks have dropped off tremendously in the past 10 years in the US. I only write 3 check a year at the most (auto licenses and a couple life insurance policies) and the rest of my bills are paid through direct debit or ACH. Most banks report they are processing only about 5 or 10% of the total number of checks they did 10 years ago. The Debit Card is helping the drop in checks because it is a lot easier to slide the card through than write a check. Of course with the recent banking law changes in the US, the banks themselves might screw this up by trying to add monthly fees to the card user which would force many back to writing checks. The banks have lost sight of why they issued the debit cards in the first place – they save the banks millions of dollars every year in staffing costs, check processing, and fraud losses. The bank have just gotten too greedy. Mark K The test transactions are only used for recurring transfers like payroll. And those are becoming a thing of the past for even those types of transactions and can be as fast as same day if the company wants. Some companies still drag their feet on putting in the request and that is their excuse when your first deposit is late. There would not be a test transaction for the payment in the case being discussed here. Guest Anyone you write a check to has your bank account numbers. Anyone you give your credit card to has your CC account info. You’re not protecting anything. Guest No it depends on your authorization. if you were to give one of the companies asking for your numbers to withdraw money they have to have a signed form that allows them to withdraw for a bill. They aren’t allowed to remove money without your written consent – although many companies do. Peter BA STINKS when it comes to baggage. Apparently they loose baggage with every flight into Barcelona – good luck. Peter They REFUSE to send cheques out. Peter Everyone who books an airline ticket pays with crecit cards….they do not need bank info. There is no reason why you should open yourself up to fraud by giving some person paid $4/hour your banking info. name address SIN# everything is on their computer – they do not need bank info. With that, they could commit a great deal of fraud. Bclay I keep a savings acct. with the minimum amount allowable, or at least try to keep it there, for just this type of thing.