Is Your Money Safer on Your Back Porch or in the Bank?

If I asked whether your money is safer in a box on your back porch or in the bank, you would probably say the bank and roll your eyes.

I would push back and say the back porch. Unless you have put in place what very few people and businesses know about, the porch wins. Think about it: I have never had anything stolen from my house, my yard, or my car. But last month, our company had money stolen straight out of our business bank account. And here is the part that should bother you. There was nothing we could do.

Worse, we knew exactly who did it, and it still did not matter. To get the money back, we would have to take them to court. If they had taken it off the porch, we could call the police. With the bank, we would have to spend our own money to sue. The thieves know this. They know that if they take a thousand dollars, or even two or three, it costs more to chase it than to let them keep it.

You might think this is rare. It is not. According to our own bank, it happens all the time.

Here is the clock you are running against. As a business, depending on your bank’s agreement, you can have as little as 24 hours to notify the bank that money was stolen. On a personal account, under longstanding federal rules, you generally have 60 days from the statement that shows the theft. Miss those windows and your options shrink fast, often down to suing the person or company that took your money. And business accounts do not get the consumer protections that personal accounts do, which is exactly why that window is so brutal.

It gets worse. Everyone knows about stolen identity. The crooks have figured out that the cleanest way to steal is to pull money out of a bank account, close the account, and walk away. No account, no person to sue. Gone.

And before you think, thank goodness no one has my account and routing number, look at the number printed on your check. Say it reads 5,001. Every check you have ever written handed your account and routing number to whoever received it. That is thousands of times your information has gone out the door, and that does not even count every business you handed your ACH details to.

You may assume a business would never steal from you. Maybe. But in our industry, most of our competitors have a slick website, which gives people a false sense of security. Start digging for who actually owns the company and you will often find not a single owner named. The “about us” page is a cute mission statement and nothing else. They are here today and gone tomorrow. And even when the company is real, your only recourse for money pulled from your account is to sue them.

Now for the somewhat happy ending. Like most businesses, we keep enough in the bank to cover payroll and what we owe our vendors. After we were robbed and told we had 24 hours to catch it, I told my team to find another way. There was no chance this was acceptable, and no chance the giant corporations banking millions leave themselves this exposed.

We came up empty, so we went back to the bank. They told us about a product they offer called Positive Pay. I am not promoting the bank or the product, not even a little. We signed up, but only at gunpoint. Here is the choice they actually gave us: people can take your money, and we will not stop them, or you can pay us to stop them. So they hold our money for free, then charge us to protect it from being stolen.

Does money in the bank mean it is safe? No.

Honestly, I should not be surprised. Our firm audits credit card processors and banks for overbilling, and our audits typically find about 40% in overcharges. For a large corporation, that can run past ten million dollars a year. For a small company, it is still tens of thousands. If they will do that in plain sight, this hardly shocks me. I sound like our own clients: are you kidding me? They did what? I suppose it explains the skyscrapers, the yachts, and the private planes.

For total transparency: I spent over a decade as an executive at the world’s largest credit card processor, deep inside the banking world this post is about. As a speaker and author, I get interviewed often, and I always say the same thing.

I got into banking to make my mother proud.

I got out of banking because I could no longer tell my mother what I did.