DIRECT DEPOSIT DECEPTION

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DIRECT DEPOSIT

A large number of workers are receiving their weekly or biweekly salary via direct deposit nowadays. That can be a good thing, if the worker and employer agree that it is the best course to follow. However, the fact of the matter is that many workers are being forced to accept payment via direct deposit. In cases such as that, direct deposit is not good at all. Let's review the concept of direct deposit and see what we come up with.
It is worth noting that very few workers go to their employer and ask that their salaries be paid via direct deposit, even though direct deposit has been in place for years and years. Many factors probably help explain this, but the factor that most explains it is the fact that most workers prefer to receive their salary in the manner they have traditionally received it. However, once businesses began to recognize that direct deposit was better for businesses, they began forcing direct deposits onto their workers. The businesses point out that direct deposit has several advantages over traditional means of payment; that it is more convenient, reliable and secure. Some businesses even point to the fact that some banks "reward" the customers who use direct deposit (to the tune of about $1.00 a month, I think). Not surprisingly, once these advantages are given the once over, several troubling facts emerge.
(1) The first fact revolves around the businesses' lack of regard for the intelligence of workers; that is, people who have been satisfied getting paid by check for years. Every time these workers go to their bank or receive a bank statement, the bank advertises all of the "advantages" of direct deposit and of the bank's "reward" to direct deposit customers, but the workers, for the most part, fail to think it is worth taking advantage of. If workers thought it was worth taking advantage of, they would contact their employer and initiate the direct deposit process. But few workers were doing that. Apparently, that is when businesses decided that workers were not intelligent enough to make the right decision, and resolved to force workers to agree to direct deposit by presenting it as if they had no other alternative. Is a business more capable of making a personal decision like that than the worker who is being affected? I don't think so. But even more importantly, is it a businesses' place to make personal decisions for its workers? I don't think so.
(2) The second fact revolves around the issue of convenience, reliability and security. Who conducted a study that demonstrated that direct deposit is more convenient, reliable and secure than depositing a check, and what perspective was the study supposed to represent? Did the study clearly state that what is more convenient, reliable and secure for the business might not be so for the worker, or vice versa? I doubt it (since no such study probably exists). For example, who determined that direct deposit was more secure than payment by check?
How many workers have been robbed while they were depositing their checks in the bank? I'm sure that has happened, but it hasn't happened so frequently that workers were complaining about it or demanding a new salary payment method. If cashing or depositing a check had become that dangerous an activity, I'm sure workers would be intelligent enough to demand that some changes be made. And, how many checks have been lost or stolen before they reached the hands of the worker? I'm sure that has happened also, but similar errors can take place with electronic transfers, and with results that are costly to the worker. If you don't get your check, you know the money isn't in the bank so you will not try to withdraw it or write checks against it. However, if you rely on direct deposit and the money somehow gets lost in cyberspace or re-directed to an account other than yours, you would have no way of knowing it and would probably write checks that will bounce. You would pay a whole lot of "insufficient funds" fines ($25.00 for each check!) if that happened, and problems with your bank could be generated that it might take weeks or months to resolve.
(3) If it's dangerous to cash a pay check, isn't it also going to be dangerous to cash a personal check? I ask that because a worker who has his/her check directly deposited will still have to cash a check in order to make a withdrawal. Since the worker will have to cash a check anyway, what danger is eliminated by the refusal of the employer to issue pay checks?
I know what a lot of you highly schooled individuals are thinking: check cashing will not be necessary because of the ATM machines. There is no way anyone can convince me that making a withdrawal from an ATM machines is safer than cashing a check. A petty thief could not have thought of a better place to carry out his/her craft than at an ATM machine, and proof of that is the high rate of criminal activity associated with ATM machines. But not only is the frequency of ATM crimes excessive, the cruelty of such crimes far outdistances the level of cruelty one associates with a check cashing crime. If my money and safety are at stake, I would prefer a bank transaction over an ATM transaction any day.
(4) But there is a deeper issue that needs to be presented here, and I think too many individuals have failed to consider this issue. That is the issue of PRIVACY. If you accept direct deposit, you are allowing your employer to become a potential factor in the relationship you have with your bank. In my opinion, your relationship with your bank is between you and the bank; your employer has no business being there. Think about this, and think about it seriously.
How many of you have ever had a dispute with your bank? One of your major weapons in such a dispute is your ability to withdraw your funds and/or stop making deposits, but you can't do this as speedily or effectively if you have to rely on your employer's co-operation. Your employer will not see the issue with the same degree of urgency as you do, nor will your employer see it in the same light as you do. As a result, your employer's response will not be as immediate or drastic as your own. Additionally, your employer might consider disputes between you and your bank from your employer's vantage point, and that is totally out of line. Think about it- your employer might have a long standing business relationship with your bank, might have received a favorable loan from the bank and might even owe the bank some money. Is your employer going to endanger that relationship (and potential source of a future loan) by defending your banking rights?
If the bank is under the impression that you owe it money, do you think it is going to refuse a direct deposit simply because you have closed your account? No! Banks typically keep closed accounts active at least until the next cycle ends (some keep them active for months after an account has been closed), and that is enough time for it to get its hands on more of your money. Additionally, have you ever thought about the possibility that the bank could approach your employer about intervening in the dispute, or petition your employer to continue making deposits until your bank balance is large enough to satisfy the bank's concerns. This would be particularly crushing to the worker if the bank asserts that the worker owes the bank some money. Without direct deposit, that is an impossibility, but with direct deposit, it is well within the realm of probability.
I caution you: there was a time when the government could not garnishee a worker's check. Now the government can take your money and pay your debtors with or without your consent. This country is only one practice or one law away from making it possible for an employer to do likewise.
When you take advantage of direct deposit, you are agreeing that your bank and your employer should work together in specific matters related to your account. Do you think those matters are going to be restricted to a single weekly or bi-weekly transaction? I doubt it. Your employer and bank are going to be exchanging and comparing all types of information about you, and they will be doing so with their interest, not your well-being, in mind. Why should you be party to such an arrangement?
To my knowledge, at this time, there is no federal law that addresses the issue of salary payment via direct deposit as regards private businesses (federal law requires federal employees to accept direct deposit). State laws concerning how a worker should be paid vary, so if you have a question about this issue, you should call the appropriate state agency and ask them to provide you with the relevant information. It is worth your time to investigate because direct deposit could be the cup of tea that will quench your thirst. But remember: Drink because YOU (not your employer!) have decided that you have a thirst that needs to be quenched.

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