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What is a demand draft, telephone check, or preauthorized draft?


A demand draft allows someone to withdraw money from your checking account without your signature. 

It is also called a telephone check or preauthorized draft. The person taking money out of your account is supposed to have your permission and your account number and routing number. Giving out this information gives someone the means to withdraw money from your account. This can be done electronically or in person at a bank or credit union.

Demand drafts can be used to scam consumers. Be careful about giving out your account information.

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