Skip to content

Verification of Direct Deposit by Government Agency

I work for a federal agency that sends literally millions of deposits directly to bank accounts each month. Our policy states that in the event a beneficiary does not receive a direct deposit in his/her account, we must verify with the bank that the deposit was not received. With the financial privacy act in mind, can banks verify whether or not a deposit has been received if the depositor knows the owner of the account, the account number, the SSN of the account holder, the amount of deposit and the date it was deposited?

Answer by John Burnett:Treasury's Financial Management Service (FMS) has a Tele-Trace program. When beneficiaries of direct deposit payments claim they've missed one, the certifying agency notifies FMS, which contacts the designated RDFI. It is a legitimate FMS service.

Unhappily, convincing financial institutions that they should ignore the inner voice that is constantly warning them about leaking customer information is an extremely difficult job. Perhaps your question and our responses will help "get the word out" to bankers. I recommend that bankers follow the link above to the Tele-Trace program description in the FMS "Green Book" to get an understanding of what it involves.


Answer by Ken Golliher:When you say you are with a federal agency, we have only your typewritten words as verification. When you call a bank and say you are with a federal agency, they have only your spoken words as verification. People engaged in phishing have no qualms about making similar claims; it's impossible to tell you from them.

Any banker who releases information based solely on a phone call from someone purporting to be a government official deserves an "F" for the day. Expect that the banks you call will either 1) just say "No" or 2) have some verification processes of their own that require you to identify yourself as an individual and provide them with verifying infomation. It must be apparent to them that they are not making a disclosure of customer information because you already have it. If all you really need is a "yes" or a "no" from the banker as to whether the payment is in, provide enough information so they can give you that type of answer.

Your personnel should ask for the person responsible for ACH activity and make reference to the Tele-Trace program when you call. When you have the right person, explain your purpose and ask what information the bank needs to verify receipt or non receipt; i.e. start out giving information rather than requesting it. Apparently, some of your folks tell bankers that they are required by law to comply with your telephone requests. Characterized charitably, that's an overstatement.

Both parties have the same goal -- assisting the individual who is entitled to the payment. Nobody wants more paper. Nevertheless, I'm surprised that Tele-Trace came to fruition without someone realizing that banks might balk at telephone requests for information.

First published on 8/14/06

First published on 08/14/2006

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics