Automatic withdrawal has become a big part of banking these days. It’s a convenient way to pay bills when a company automatically takes your payment out on the same day each month. The customer doesn’t have to worry about taking the time to send the money to the company and the consumer doesn’t have to worry about forgetting to pay the bill on time, which would acquire them late fees.
Companies also profit from automatic withdrawal. While they miss out on a lot of late fees they don’t have to worry about clients never paying on the account.
Having bills automatically withdrawn from a bank account my sound good but it may not be as great as it seems. What happens when a company takes out too much or an entire payment that they weren’t suppose to? If a customer’s bank account doesn’t have enough cash to cover the problem, it can send their bank account into a downward spiral of insignificant fund fees.
It doesn’t happen with every company but it does happen. If a customer pays with direct withdrawal they need to check their account every time a payment is to be taken out. Make sure the company is charging you the right amount. Also when canceling with a company, check the account the next time the payment would have come out had the account not been cancelled. Checking a bank account regularly may take away from the convenience of automatic withdrawals but it’s a small price to pay compared to the fees that could add up.
If a company does take out too much or an entire payment that they weren’t suppose to the consumer should contact them right away. Most likely they will offer to return only the money they took, not the fines that it may have cost the client and it will usually take them 2 to 10 business days which may not be fast enough if a customer has other things to pay for. In this case it’s important that the customer stays assertive and this may be a case where a consumer will need to speak to someone in management. Keep in mind that the customer service associates most likely do not have the power to pay back the fees and they are probably not the ones that caused the problem so try to remain courteous. Remember don’t back down. A company would have no trouble fining you if you didn’t pay them or accidentally bounced a check. If they take money from you that isn’t theirs they should have to pay your fines even if it was an accident.
If talking to the company only gets the customer a refund of the money withdrawn and not an immediate refund of fines, there still is other action to take. A consumer can file a complaint with their financial institution. Most banks and credit unions will reimburse the money immediately as well as fines and fees that may have been caused by the mistake. Then the financial institution will attempt to get the money back from the company.
Automatic charges to credit cards can also have the same problem. A consumer should check their statements regularly. If they can’t get the money and fees back from the company, ask the credit card company about accidental and overcharge policies.
When a company won’t reimburse the consumer anything at all, filing complaints with the state attorney general and better business bureau may be necessary.
To avoid problems such as these a consumer should always get written confirmation when canceling an account that has automatic withdrawal.
Automatic withdrawal problems with any company can be a hassle. If the company continues to do it repeatedly even after they have been informed numerous times, a consumer should talk to their financial institution about blocking withdrawals from the company. If that cannot be done a consumer may have to close out their account and open a new one.
With some companies automatic withdrawal is required. Before a consumer signs up for automatic withdrawal they should consider the business they are dealing with. Ask them about their policies for accidental withdrawals and over withdrawals. Also the client needs to consider their own financial situation.
Often those customers that are required to have automatic withdrawal, in order to get a product or service, are those that the company is concerned about getting payments from. These are likely the consumers who will not have money to cover any direct withdrawal mistakes made by the company. One mistake by the company can cause numerous checks to bounce. This will cause fees from the financial institution and the companies the checks had been written for. Even if the money can be reimbursed the companies that received the bad checks may have policies against consumers that had insufficient funds, so be careful when considering automatic withdrawals.