In article <[email hidden]>, [email hidden]
says...
Quoted message said:
has anyone had this problem?
My auto insurance policy was to be auto drafted at 102. They starting
pulling $147. My bank says they are powerless.
Insurance company wanted proof of prior insurance, and this was the reason
for the increse. Would this not have required a new signature from me to
change what was agreed to in the sighned document? This is silly because I
didn't switch companies. Surely not a "progressive" way of thinking.
Beyond hashing it out, is there any other way to fight this smartly and
effectively?
Seems like I am oing to start auto drafting from my bank where I have more
control over when and how much is going to get drafted.
I listen to talk radio alot. He's a link to one show's take on automatic
payments:
http://www.troubleshooter.com/cf_misc/Columns/ColumnDetails.cfm?ColumnID=177
Automatic Withdrawals
by - Tom Martino
February 11, 2005
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Imagine buying something very expensive and the clerk asks: "How do you want
to pay for it?"
You answer: "Here are the keys to my house. Feel free to enter my home, go
into the kitchen, grab my purse, open my wallet, and take out monthly
payments."
Sound unbelievable?
In essence that's what we do when we give merchants permission to make
automatic withdrawals from our checking accounts. You may consider it
convenient but it can be a very dangerous practice.
Here are some things you should know that financial institutions and merchants
do not openly tell you:
Once you give permission to a merchant to withdraw money from your checking
account, you can NOT stop it unless the merchant agrees. So if you have a
dispute with a merchant over a product or service you could have a big
problem. Let's say you want to stop making payments but the merchant doesn't
agree. You end up the loser.
If you were simply writing checks out of your checking account, you could
choose NOT to pay a bill if you had a dispute. In that case the vendor would
have to come after you in court to get payment. But with an automatic
withdrawal, your bank gets involved and will NOT allow you to stop the
withdrawals.
Your bank will let you stop one withdrawal at a time but that will cost you up
to $25 each time you do it.
Keep in mind ... you can NEVER stop the withdrawal authorization altogether,
unless the merchant agrees to it. The only way to do it is to close ALL of
your accounts with the bank involved. That’s because bankers will go into any
of your accounts to make the withdrawals if the “authorized” account is short.
Here is another aspect of automatic withdrawals you need to know about. You
may think you are giving permission to a merchant for only "monthly payments"
for a "specific amount" but you're not. Financial institutions do not have a
mechanism for limiting the frequency of withdrawals nor the amount of
payments. In essence, once you give authority, you give blanket authority for
any and all withdrawals.
Many merchants charge a penalty fee when they try to debit your account and
there is not enough money to make the payment. Since the withdrawals are
automated, the merchant’ computer then keeps accessing your account (sometimes
on an hourly basis) to check for available funds. Each time they check and
find inadequate funds, you may be charged a penalty. Those charges can amount
to hundreds of dollars in just a few hours!
I recommend you NEVER give any merchant authority to withdraw money from your
account unless you follow these rules:
1. Establish a special account for automatic withdrawals.
Keep only enough money in the account for the monthly payments that will be
automatically withdrawn.
2. Do not have ANY other accounts with that bank (because
they will go into other accounts).
3. Watch the account closely. If a merchant makes an
unauthorized or inaccurate withdrawal report it immediately to both the
financial institution and the merchant.
4. To stop automatic withdrawals, the only safe way is to
close the account.
5. If you start a new account, make sure you do not give the
financial institution authority to take from the new account to settle debits
from other accounts you have (or had) at the same institution. Sometimes even
after you close an account, a bank will honor an automatic withdrawal on the
closed account. Then the bank will try to collect the amount from your new
account.
