What would stop people from withdrawing money from multiple banks and over drawing before all bank branches could be updated on the person’s balance?
In: Economics
Local banks were way more common back then. Your bank was more likely to literally be one bank or a small local chain. There were various paper/phone based systems in place to verify volumes. If you withdrew a lot, they would probably make a phone call to verify the funds. But because of this, it was possible to “overdraw” an account. This should’ve been eliminated with electronic banking but then banks realized they can charge you fees if you accidentally lose track of your expenses and rather than simply not approving a charge, they overdraw you.
But in the broader context of your question, bank fraud was definitely easier back in the day. The real scam was check bouncing. Grocery and retail stores used to accept paper checks as payment. You wrote a check for the total and paid that way. It would take a least a day for it to get processed and for them to find out you wrote a check from an empty account.
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