Warning about Electronic Rent Collection

[Heidi Rogers]

I haven't seen any negatives mentioned about having tenants drop off rent payments at the bank, but here's something to think about. My uncle set up a Deposit Only account at Wells Fargo authorizing a real estate client to make deposits. This client was not a signer on the account, only able to deposit. The client used this account to open a credit card, racked up $26,000 in debt, and disappeared, leaving my uncle responsible for the debt. After trying to resolve it with the bank, the police, lawyers, and the FBI, my uncle is still on the hook for $10,000 and will have to eat it to keep his own record clean.

[David Beard]

Has to be more to the story, credit card accounts require valid authorization to establish. This was fraud. How is he on the hook?