Smugmug Pro payment policy gripe

Sooo, I sold some pics using Smugmug Pro.

Now it's time to collect and they insist on direct deposit. They won't send me a check. They won't send to Paypal. They won't give me credit towards prints. They insist they have a "strict payment policy".They ONLY do direct deposit to my bank account. That just sucks.

I have a problem with this because I have to give them an IRS tax form that has my SSN.

SSN + bank routing number = all a smart person would need to hack my bank account. Sad but true.

Call me paranoid but since they didn't ask for this up front; I just don't understand why they're being such sticklers. What's the problem with mailing a check? Why can't they respect my desire to not expose myself to identity theft?

If they were a regulated institution or my employer I'd be OK but they're just some company.

I suppose I can open a bank account with some off-bank just for the purpose of getting my $500, then close it.

Note: After discovering how loose banking policy is regarding SSN and Routing Number being "positive proof of identity", I never use personal checks.

Even if they were to allow payment by PayPal or via check they still need your SSN so they can be send 1099 forms out and report your income to the IRS. Most companies that is going to pay out(or believes the may) pay out over the required reporting threshold needs your SSN.

Banks don't really use SSN and routing numbers as proof of identity. As many banks only have a limited number of routing numbers (I. E. There may be tens of thousands or hundreds of thousands of accounts with the same routing number are larger banks).

mrfixitx wrote in post #15470332
Even if they were to allow payment by PayPal or via check they still need your SSN so they can be send 1099 forms out and report your income to the IRS. Most companies that is going to pay out(or believes the may) pay out over the required reporting threshold needs your SSN.

Banks don't really use SSN and routing numbers as proof of identity. As many banks only have a limited number of routing numbers (I. E. There may be tens of thousands or hundreds of thousands of accounts with the same routing number are larger banks).

I think that most banks have 1 routing number (maybe 2 to differentiate savings/checkings).

The routing # is simply that 'address' that the sending company is sending the money to. The account number differentiates which customer is to get the money when it arrives at the bank.

Kinda like an appartment building. Everyone has the same address...just a different apartment number.

You agreed to their terms when you signed up and now are complaining that you are going to get paid? you have a business, so should either have a business tax ID or a business account to give them. In the absence of a business ID, you use your social. I collect this info from people at work all the time. Smugmug isn't the only company that does this.

Almost everybody that pays what might be considered "income" needs your tax info. I mean, everyone. Sell images to a local chamber of commerce - gotta give 'em your tax info. Magazine buying an image for their latest issue - gotta give 'em the info. State tourism department, selling thru a stock agency, selling prints, calendars, or greeting cards thru Lulu - same thing. I am surprised that you were not familiar with this practice, as it is not only widespread, but required by law.

As for Smugmug's payment policy, it sucks. The payment cannot be made into a savings account, and not everybody has a checking account, or can even get a checking account. So what do they do? Smugmug just keeps all the money . . . all of it

NBEast wrote in post #15470303
What's the problem with mailing a check? Why can't they respect my desire to not expose myself to identity theft?

1. Checks in mailboxes are often stolen and fraudulently cashed.
2. Uncleared checks are a royal pain and a significant administrative burden for the payer. State laws vary, but generally the payer must make some effort to contact the payee before the funds are escheated to the State as unclaimed funds. This all costs money.
3. Printing and mailing checks costs a lot more than ACH transfers.
4. A very low percentage of identity theft cases arise from vendors providing relevant information to reputable payers through secure channels.

Don't get your shorts in a bunch over this. Just give them what they need for direct deposit and you'll get your money.

mikeinctown wrote in post #15471184
You agreed to their terms when you signed up and now are complaining that you are going to get paid? you have a business, so should either have a business tax ID or a business account to give them. In the absence of a business ID, you use your social. I collect this info from people at work all the time. Smugmug isn't the only company that does this.

That wasn't the terms when I signed up.

Curtis N wrote in post #15471821
1. Checks in mailboxes are often stolen and fraudulently cashed.
2. Uncleared checks are a royal pain and a significant administrative burden for the payer. State laws vary, but generally the payer must make some effort to contact the payee before the funds are escheated to the State as unclaimed funds. This all costs money.
3. Printing and mailing checks costs a lot more than ACH transfers.
4. A very low percentage of identity theft cases arise from vendors providing relevant information to reputable payers through secure channels.

Don't get your shorts in a bunch over this. Just give them what they need for direct deposit and you'll get your money.

Of course; they want the routing and account #.

I opened an new bank account that I'll close after payment.

It just seems uncharacteristic of Smugmug, usually they bend over backwards to accomodate customers.

Anyway; I'm closing it. I had it mainly for paying photo customers to order, share, and buy. However; it never really worked as a revenue generator. The only real money I made as a photographer was in fees. I'd include a DVD of images with every event and discovered that very few relatives were interested in buying at a mark-up. It's probably because I didn't take measures to see that they got the link.

Just thought I'd grumble on the way out the door - they were never really set up for small timers like me. I do like my personal Smugmug account; and their services.

I had my identity stolen in June. Most people have no clue.

Tom Reichner wrote in post #15471316
Almost everybody that pays what might be considered "income" needs your tax info. I mean, everyone. Sell images to a local chamber of commerce - gotta give 'em your tax info. Magazine buying an image for their latest issue - gotta give 'em the info. State tourism department, selling thru a stock agency, selling prints, calendars, or greeting cards thru Lulu - same thing. I am surprised that you were not familiar with this practice, as it is not only widespread, but required by law.

As for Smugmug's payment policy, it sucks. The payment cannot be made into a savings account, and not everybody has a checking account, or can even get a checking account. So what do they do? Smugmug just keeps all the money . . . all of it

Hopefully they'll make exceptions when appropriate. At least they tell current new customers up front.

At $300/yr, they won't get many small timers anymore.

One consolation, when I got back from the bank (after 3 or 4 denials from Smugmug) they did say that because I'm closing the account they'll "send a check". I don't know if that was just loose venacular or if they finally came around.

I've heard it costs a company $5 or more to cut and mail a check, so direct deposit is an efficiency that they need to take advantage of to keep their costs (and thus, your costs) low. Plus you get the payment in a much more timely manner.

Any company that's making payments needs your SSN for annual tax reporting.

I don't use Smugmug personally, but I know many people who do and they are a well established company that can be probably be trusted to a large degree.

While I understand your concerns about identity theft, I really think you are making a much bigger deal out of this than necessary. Keep the second account as a separate business account. That gives you a buffer and will make you accounting easier, anyway.

amfoto1 wrote in post #15473780
I've heard it costs a company $5 or more to cut and mail a check,

Thats what they want you to believe.

Heck our DMV charges YOU $3 to have the "priveledge" to go up in person to the counter to do whatever at the DMV. But they also charge a $1 "convenience fee" to do the same thing online.

Just more ways to nickle and dime everyone.

NBEast wrote in post #15473211
I had my identity stolen in June. Most people have no clue.

Sorry to hear of your misfortune. I'll help with the "clue" part. As a financial professional, I have attended more than my share of conferences, lectures and seminars on identity theft.

In the vast majority of identity theft cases, the thief gets the information through low-tech methods - going through mail and trash, for example. This is one of the reasons the financial services industry is steering people and corporations toward electronic payment processes. The new ways aren't perfect, but they're better.

The idea of putting data and signatures on a piece of paper and mailing it across the country is obsolete, inefficient, and many times more risky than an ACH transfer.

You wrote in your first post that you don't use checks, for security reasons. Smugmug has the same reasons. You seem to be miffed at them for refusing to do something you refuse to do yourself.

NBEast wrote in post #15473173
That wasn't the terms when I signed up.

They cannot change the terms unless they give you notice and you agree by either not closing your account or checking a box somewhere that you have read the new terms and agree. So you either just didn't bother to read what they sent or you didn't care at the time.

NBEast wrote in post #15473238
Hopefully they'll make exceptions when appropriate. At least they tell current new customers up front.

At $300/yr, they won't get many small timers anymore.

One consolation, when I got back from the bank (after 3 or 4 denials from Smugmug) they did say that because I'm closing the account they'll "send a check". I don't know if that was just loose venacular or if they finally came around.

So you closed your photo account because they wouldn't write a check when you sold something? Seems like a bad plan to me. As the poster above me said, identity theives go through trash and gain your info from methods normaly other than electronic. Also, companies keep bank account info very protected and when there is a breach they are required to notify you immediately. not sure if required by law or not, but many if not most companies also will pay to have a bank card replaced or other measures to protect against ID theft.

YamahaRob wrote in post #15473944
Thats what they want you to believe.

They want you to believe it because it's true. I can tell you from first-hand Corporate America experience that it costs a lot more to process payments on paper than electronically. Even the most efficient operation pays over two dollars to write a check, and many small companies (or large ones that aren't set up for it) pay quite a bit more, up to and over five dollars.

So believe it.

YamahaRob wrote in post #15473944
Thats what they want you to believe.

Just more ways to nickle and dime everyone.

Just their time and security controls are going to add up to that. If the print checks in house you are talking dual control validation to prevent theft and fraud secure storage and daily/weekly/monthly account balancing. Then add in state mandated escheatment for outstanding checks and you are talking a significant cost vs. 100% direct deposit which can be completed and errors corrected before you could even receive a paper check.

Is it a wonder that companies don't like checks at all. You want to things priced as low as possible don't try and force a company to take the most expensive route for payment.

I also have big news for you. They can get your routing number and account number off the back of the check they are sending you once you cash it. Banks stamp the routing number and account number a check is being deposited to on the back for tracking purposes. It also allows the check issuer to see where a check was deposited if someone calls in and claims they never received a check after cashing it.