be wary

[junker]

a judgement creditor talked me into settling for a much reduced total and i agreed, he said to call in every month and authorize our agreed payment of 100 a month on a certain date. i agreed to the first monthly payment, and then during the month decided i couldnt do this and withdrew all my money from checking acct well when next payment was due they automatically sent in paper check and overdrew my account. the bank says that since i agreed to auto payment ONCE there was nothing they could do and i am liable for the payment. i called loss migation at the bank and they say when you give some one a authorization for payment they can legally do it again and again and the only this you can do is try small claims court and i was liable for the charge, and they wont even close my account until its paid. the bank says its basically my word against theirs that i didnt authorize a recurring auto widthdrawal.
i just wanted to warn anyone else who my be tempted to give bank info to a creditor.

[magyar123]

You acted too late. When you originally decided NOT to have the amount deducted automatically anymore, you should have visited your bank, and put a "stop payment" on any upcoming/future auto withdrawals. Your bank would have to honor your stop payment request. What they told you at the bank is, bunk, crap.

[magyar123]

One more question. Was the creditor the bank where you have your account?

[treehugger1]

One of the newest banking processes I have seen is related to drafting ACH "checks" against accounts. However, you should have the right to call the judgment creditor and tell them they are no longer auhtorized to debit any account of yours. I would do this in writing, return receipt. Close your account and get a copy of all letters to creditors to your bank. This "should" put the responsibility on the bank (well, maybe.)

I currently have two automatic deductions taken from my checking account but am always ready to give a call to the creditors and put a stop to them (recording my requests) should everything go south.

I am no longer willing to allow any other creditors access to my bank accounts. I've closed all accounts from the past. If they can't take a money order, screw them. Accessing your bank account once someone has your routing number and account number is way too easy.

[325Falcon]

When you pay your CC or any other debt online or over the phone on a monthly basis you only athorize a one time payment. Correct?

I paid almost all crediters this way in the past. I have not had any take any money since I stoped paying them. Now I am concerned.

[magyar123]

When you pay your CC or any other debt online or over the phone on a monthly basis you only athorize a one time payment. Correct?

I paid almost all crediters this way in the past. I have not had any take any money since I stoped paying them. Now I am concerned.

NEVER, EVER authorize even one phone payment. If you don't even want to pay recurring bills online anymore, go to your bank's website and delete the payee information, if you signed up for the bank's bill payment service
If you just want to make a one-time online payment, go to your creditor's website. It will give you options: One time payment only, or on the same day every month. Mark the "one time payment only" box.

[junker]

no the t0he bank wasnt the creditor, it was a credit collection agency that had a old judgment on me from a few years ago for a old mbna acct, the bank said it would do no good to stop future payments, as they can make a paper check from your info and put any check number they want, in my case check 901 came through and if i was to stop payment on check 902 or 3 they would simply change the ck number to something else say 1001 and the bank would honor it. to make it worse i had only a dollar inthere and so they overdrew me. altho they froze any more checks they wont close acct until i pay up. the fraud unit at the bank said if you give them the checking info even once they cant help you. this is Wachovia bank apparantly nothing short of closing account will help

[junker]

added note

the bank Did say it would have been much better to make them take it from debit card

[Keebler]

The problem with authorizing ACH transactions is that the bank knows nothing about what you authorized so they honor everything that gets presented to them. If you tell a creditor they can debit your account once, there's no real record of what you agreed to. If they debit your account too many times and you dispute it with your bank, you'll have a hard time making your case because it's your word against the creditors word -- not a good situation.

With a check, the same account information is used and the end result is the same. However, the check itself is a little miniature contract that is scanned, recorded and archived. If the same creditor uses the information from the check to perform subsequent withdrawls it's very easy to show the bank what your agreement had been. The check is your written proof of exactly what you agreed to.

[magyar123]

The problem with authorizing ACH transactions is that the bank knows nothing about what you authorized so they honor everything that gets presented to them. If you tell a creditor they can debit your account once, there's no real record of what you agreed to. If they debit your account too many times and you dispute it with your bank, you'll have a hard time making your case because it's your word against the creditors word -- not a good situation.

With a check, the same account information is used and the end result is the same. However, the check itself is a little miniature contract that is scanned, recorded and archived. If the same creditor uses the information from the check to perform subsequent withdrawls it's very easy to show the bank what your agreement had been. The check is your written proof of exactly what you agreed to.

I doubt that it is legal for any creditor to use the banking information on a check to initiate ACH withdrawals. If they do you have a good case for suing. Would be considered theft/fraud.

[Keebler]

I doubt that it is legal for any creditor to use the banking information on a check to initiate ACH withdrawals. If they do you have a good case for suing. Would be considered theft/fraud.

Seriously: It is now somewhat common for stores to scan your check and initiate a matching ACH transaction instead of presenting the check for payment.

What is check conversion and how does it work?

Check conversion is the process of converting your customer check payments into electronic payments that are processed through the Automated Clearing House (ACH). Check conversion can save businesses considerable time and money in payment processing. In addition, check conversion results in fewer check returns, earlier fraud detection, and less errors.

Source

Fast Facts About Check Conversion

The United States relies on paper checks more than any other industrialized nation, with check volume peaking in the mid-1990s. Since those peak years, check volume has been declining.

Due to accelerated processing times and return notification to the payee, the check conversion process results in fewer returns, earlier fraud detection, and fewer errors.

Check conversion relies on the same secure network used for Direct Deposit and Direct Payment, the Automated Clearing House (ACH).

In 2005, the number of checks converted to ACH debits rose by 60%, and more than 2.15 billion consumer bill payments were processed through the ACH Network.

Source

[Keebler]

When you pay your CC or any other debt online or over the phone on a monthly basis you only athorize a one time payment. Correct?

I paid almost all crediters this way in the past. I have not had any take any money since I stoped paying them. Now I am concerned.

I've now switched away from this practice in favor of using my bank's Bill Payer Service. The difference here is the payment is pushed from the bank to your creditor instead of having the creditor initiate a withdrawl. Some banks offer a very flexible Bill Payment Service that handles every kind of payment you could ever need to make. Like mine, there are even banks that offer it as a free service.

Somewhere there's a thread where I described how I tried to stop ACH transactions from creditors. Can you believe that some of them wouldn't let me delete my banking information unless I provided them with a different account instead?

[magyar123]

Respnse to Keebler's reply to my last reply: I am aware of what you say regarding one-time ACH/checks. What I was getting to that it woild be illegal for creditors to use your banking information from the bottom of a check to initiate any future withdrawals. Note the difference - one time vs. future.

[Hillbilly]

The collection agencies are professionals at employing deceptive tricks and tactics to get you to "agree" to terms that you would not willingly agree to.
Just yesterday I recieved a bill asking for a payment on a past due account, it looked pretty straight forward on the face of it...... However, as I went to refold it I noticed some fine print on the reverse side, essentially saying that by sending them any amount, that I was also authorising them to make future automatic deductions from my bank account.
Under that condition, It will be a cold day in hell before they will receive any further payments from me.
Be wary, be very wary, whenever you have to deal with a collection agency, and if BK is a certainty, it is better to avoid any contact or conversation that they could easily manipulate to their own advantage.

[junker]

the person at the bank also told me the safest way to pay a bill is through your banks online bill pay service, that way the creditor gets none of your personal information, not even your checking acct number. even though the bills are paid from your acct, they get no personal info.