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Can a bank/broker move money between accounts by their own discretion?
Anonymous5 views1 answers
A friend was recently "robbed" of his savings via checking account when a fraudster found some old checks of his. The two accounts were "linked" via an automatic overdraft protection feature. I specifically have this feature turned off at my broker/bank (Schwab) between several checking, brokerage, and retirement accounts. But is my money still "at risk" to such fraud? Meaning, can a bank/broker still move money from one account per their own discretion to cover charges/overdrafts/etc. in a separate, non-linked account (due to fraud, disputes, etc.)?
To be sure read all of the account disclosures given to you at the time you opened your accounts, or if you don't have them ask for the latest disclosures. Generally banks and other financial institutions have a "blanket" authority that allows funds from most accounts to be used to satisfy debts and obligations and overdrafts etc. for other accounts This authority often does extend beyond just checking and savings accounts. I have seen instances of CD's, being used to pay off delinquent loans, and money market accounts used to cover an overdrawn account. If you are unsure, check with the bank.
