ON YOUR SIDE ALERT: Automatic electronic debits
RICHMOND, VA (WWBT) - In this age of technology, it's likely you have a bill or two that's taken out of our account electronically. For some it's quick and convenient, but consumer advocates warn it's not for everyone.
Paying bills is just a fact of life. Some like the old fashion way, by mail, others use the electronic route or ACH debit. Jay Speer, with the Virginia Poverty Law Center says customers beware.
"There are a lot of shady people out there and lot of people that don't get things right," he explained.
His office has dealt with consumers complaints when it comes ACH debits. They range from mistakes, to companies continuing to debit accounts even after they were requested to stop. Speer says it's even happened to him.
"I was having my mortgage automatically deducted. They took two payments one month and it took me about 8 months to get that money back," Speer said.
Speer advises consumers not to use the system but instead use an electronic bill pay method. The difference, *you* control when the payment and not the company you owe.
"It's a very dangerous thing. One person described it to me as playing a game or Russian Roulette because it is so hard to stop it," he said.
Speer says most complaints come from people who sign up for payday or predatory type loans.
"Not only are they a bad deal and charge you 500 percent interest or more but you are asking to be a crime victim by simply going and even applying for these loans," he explained.
The organization offers these tips: http://www.virginiafairloans.org/resources/bank-account-help/
We reached out to Norman Robinson about the topic. He's President and CEO of EastPay, the company provides ACH education and support to hundreds of financial institutions.
"Read the authorization. ACH rules require consumer be given a copy of the authorization along with instructions on how to revoke the authorization or cease the authorization," he explained.
He says the system is not flawless but out of billions of transactions, less than once percent are complaints about unauthorized transactions.
Robinson says keep in mind, if you want to stop a recurring payment -- you must first make a request with the originating company. If the company doesn't comply, then contact your bank -- and if necessary, file a complaint -- before taking drastic measures like closing the account.
"To change that account is a big inconvenience so I would say work it through your financial institution, call EastPay or Better Business Bureau or others to help you get to the root of that problem," Robinson said.
Bottom line, always make sure you know who has access to your cash. EastPay offers this resource: http://www.electronicpayments.org/individual Companies found in violation of ACH debit rules can be fined. If you have a problem with a company debiting your account counselors at Virginia Poverty Law Center may be able to help. You can call the hotline at 866-830-4501.
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