Survey: Misconceptions Help To Stifle Direct Deposit
While nearly all Americans are familiar with the risk from identity theft, few have made the move to direct deposit over paper checks, according to a new survey.
The study was commissioned by the U.S. Treasury Department and the Federal Reserve Banks which have been backing a national "Go Direct" automatic deposit campaign to encourage direct deposit of government checks.
Among the finds in the survey of 1,400 adults:
* 62% thought a paper check with one's name on it could only be cashed if signed or endorsed by the person named.
* Nearly half believed that direct deposits of payments-such as wages, salary, or government benefits-had to go through the Internet to be deposited into an account.
* Nearly 40% inaccurately thought the following statement to be false: No direct deposit has ever been lost or stolen, the government noted.
In its efforts, the Go Direct Campaign is emphasizing that checks can be forged, and payments that come in the mail are especially vulnerable to theft and fraudulent endorsements.
* Direct deposit works by transferring funds directly into an account through a highly secure electronic banking system;
* A Treasury check recipient is 30 times more likely to experience a problem than someone who receives that payment electronically.
The direct deposit system creates records of transactions, which means problems-though rare-are quickly fixed.
The government reported that beginning in February it will roll out additional promotion that will include financial institutions, government leaders and community-based organizations around the country, along with special events, activities and promotions geared toward informing people about the benefits of direct deposit and encouraging them to sign up.