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Fraudulent telemarketers have found yet another way to steal your money, this time from your checking account. Consumers across the country are complaining about unauthorized debits (withdrawals) from their checking accounts.

While automatic debiting of your checking account can be a legitimate payment method (many people pay mortgages or make car payments this way), the system is being abused by some telemarketers. Therefore, if a caller asks for your checking account number or other information printed on your check, you should follow the same warning that applies to your credit card number -- do not give out checking account information over the phone unless you initiate the call or are familiar with the company. Remember, if you give your checking account number over the phone to an unknown person for "verification" or "computer purposes," that person may use it to improperly take money from your checking account.

How the Scam Works

The new telemarketing scam usually works like this. You either get a postcard or a telephone call saying you have won a free prize or can qualify for a major credit card, regardless of past credit problems. If you respond to the offer, the telemarketer often asks you right away, "Do you have a checking account?" If you say "yes," the telemarketer then goes on to explain the offer, making it sound too good to pass up.

Near the end of the sales pitch, the telemarketer may ask you to get one of your checks and to read off all of the numbers at the bottom. Sometimes you may not be told why this information is needed. Other times you may be told the account information will help ensure that you qualify for the offer. And, in some cases, the telemarketer may explain that this information will allow them to debit your checking account and ship the prize or process the fee for the credit card.

Once the telemarketer has your checking account information, it is put on a "demand draft," which is processed much like a check. The draft has your name, account number, and states an amount. Unlike a check, however, the draft does not require your signature. When your bank receives the draft, it takes the amount on the draft from your checking account and pays the telemarketer's bank. You may not know that your bank has paid the draft until you receive your bank statement.

What You Can Do to Protect Yourself

Automatic debit scams involve a fraud that is hard to detect and could expose you to large financial losses. However, the following suggestions may help you avoid becoming a victim.

* Do not give your checking account number over the phone in response to solicitations from people you do not know.

* If anyone asks for your checking account number, ask them why they need this information.

* Beware of offers that sound too good to be true, especially any offers that require your checking account number. Ask to review the company's offer in writing before you agree to a purchase.

What to Do if You are a Victim

If a telemarketer has issued a draft against your checking account without your knowledge or permission, or the amount is more than you authorized, contact your bank immediately. Depending on the timing and the circumstances, you may be able to get your money back. You also may want to contact your local consumer protection agency, state Attorney General and the Better Business Bureau to report the telemarketer.

You also may file a complaint with the FTC by writing to: Correspondence Branch, Federal Trade Commission, Washington, DC 20580. Although the FTC generally does not intervene in individual disputes, the information you provide may help to indicate a pattern of possible law violation requiring action by the Commission. Facts for Consumers from the Federal Trade Commission

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