Credit Card Company Drafting My Checking Account

[krispy12]

I think I made a mistake. I talked to the credit card companies a few weeks ago & said I would try to make a payment but I doubt I could since I didn't have a job. Well I checked my checking acct. today & it said -200. I have never overdrawn my acct. so this was shocking. Discover has withdrawn $200 plus I got charged an overdraft fee.

I thought my acct. was setup so that if I don't have money it would decline. While I'm waiting for the bank representative to give me a call back to change that setting, I was wondering is it legal for credit card companies to withdraw money out of your account if you are past due?

I'm also assuming that it doesn't matter if you delete your bank info on their website since they probably have it on file anyway.

[BK2008]

Were you originally set up to autodraft?? Did you recently change it to not do that? If you did, I'd call that an unauthorized charge and have your bank initiate a dispute and reverse it.

Make sure you double check that autodraft is off.

And a lot of banks will go ahead an honor a NSF item and pay it. It is more revenue for them to charge you the fee and the odds are you will put money in to make the od good.

As for the legality, if the cc is held by the same bank as your checking acct, they could very well have right to offset, meaning they can take the funds to cover your cc payment. If they are not related, I don't think they can without a court order.

That's why I never let anybody autodraft.... Too many potential headaches.

[liz417]

Hi there,

I had a friend that authorized a CA to take a $100 payment withdraw out of her checking account and they continued to "take money out" which made a mess of her checking account! She had so many overdraft charges, bounced check fees, etc. When this "CA" was done, they had taken over $1,900 out of her account...NEVER authorize an autodeduction!!!! Sure, she fought it (through the bank) and got her money back...4 months later!!!!
Be careful and never promise a CA payment, tell them you are "working" on it and doing the best that you can...NEVER promise anything (or give out your checking acct number!).

Good Luck with everything!

[Frogge]

krispy, good step calling the bank, the question is if you had autodraft on the Discover. If you've ever paid them on their website out of your checking, they will still have this info to draft your account. I'd open up another one that's not tied to your CC's in any way.

[hnhlvr]

Yep as Frogge said, they keep all that info.

My husband's the only person on our mortgage, but the bank keeps calling me and I couldn't figure out why until I remembered I was paying the bill over the phone using my cell phone and they had kept that number on file. They don't have my husband's number so they call me.

Close that account, open another account at a different bank QUICKLY before your credit plummets and/or CHEX adds your name to their list. Only keep a small amount of money in the account.

[treehugger1]

Two things:

1) Close the account
2) Stop the automatic draft. You might want to do this via certified return receipt mail.

Then, open up a new account and never, EVER, use ACH again (or at least for a long time.)

While there are many cases where the auto-draft is not "legal," guess who has to prove it? YOU! And while this can be done, the time it takes can be long.

There are many ways to "bank" nowadays. including direct deposit to a debit card from netspend, western union, etc.
Google prepaid debit cards. Many of these are FDIC insured and you can deposit as much as $10K - $20K on some cards.

[krispy12]

I was a busy little bee today. I contacted my bank & told them I didn't want the overdraft option & if someone tries to debit something to make it so it won't go through. Then she proceeded to tell me that it won't go through but I'll get hit with a fee each time they try or something.

I called all my credit card companies & told them to only call my cell phone number & verified they had the correct mailing address. I also asked all of them if I had something going to be debited from my account in the future & they all said no except Discover.

Discover set me up on a payment plan where $200 would be taken out over the next 6 months. I don't remember saying that was ok but she said that in order to be setup I had to give them my account number & I do recall doing that. My mistake & I have to call again tomorrow to find out if it can be reversed.

The gist I'm getting is that credit card companies know your bank info but they will not just start debiting your checking account even if you are late.

The reason why Discover debited my checking was because I had agreed on the phone. I had also given them my bank acct. number to do so. I'm not worried anymore about it but I will call again tomorrow to make sure the payment plan is cancelled.

I really want to keep this bank acct. open. I've been with them a long time & always have been in good standing. Although my car loan is with them too & I haven't made a payment for a few months so hopefully they don't close my checking acct.

[ssdsco]

I really want to keep this bank acct. open. I've been with them a long time & always have been in good standing. Although my car loan is with them too & I haven't made a payment for a few months so hopefully they don't close my checking acct.

Do a search on "cross collateralization". The bank may be able to take money out of your checking account without any authorization from you for any money owed on your car.

[Frogge]

Look at Your Bank Loan and Account Papers

Krispy, I totally understand that you want to keep your bank account in 'good stannding' after being with them for years, but I can tell you that there is still the possibility of them debiting your account for the car payments, even though it's not been done yet.

Read your Promissory Note in detail. If there is any language regarding Right To Offset or Cross Collateralization read it carefully to see what it says about your other in-house deposit accounts.

Since you made this agreement with Discover, they can still try to draft these payments as long as the money is available, it may be difficult to get this stopped.. The safe thing to do if you don't want to end your relationship there would be to open another checking account and change your other auto-draft payments (if you have bill pay or something) to that new account and leave the other one virtually empty. Again, though - check the language in your Note about in-house accounts.

[hnhlvr]

Hi Krispi,

Sorry to say this, but you are crazy to keep a bank account where you owe money on a debt. I had the same bank account since I was 18 years old and when my husband defaulted on a loan from there, the FIRST thing I did was close the account. The bank WILL take that money to cover the car loan.

And fwiw, I was very sad to give up that bank as they never charged me any fees, but it's better to err on the side of caution.

[hnhlvr]

[QUOTE=BigBoy2U;179840] If you are to make a payment to any creditor you owe use a money order. Once they have the account info they will save it until its time to seize the account.

QUOTE]

The best security is pay all ccs with money orders. Western Union ones are only 75 cents. That'll give you additional piece of mind.

[krispy12]

Before this debit transaction I had $2 in my checking account. Now I'm -200.

I am not paying any of my credit cards because I have no money & my other needs like shelter & food come first. If I do pay them, I will certainly use a money order.

I called Discover & cancelled my payment plan so they should't be taking anymore money out.

I do not keep money in my checking account. I have been using cash for the last few months & have stopped the overdraft option on my acct. too.

[HopeFaith]

These are called EFT's and they'll always go through if are processed as automatic payments... I work at a bank. I also had that happen with Discover, I went on a payment plan, and they collected a payment AFTER I filed BK... they said it was warranted because I didn't physically cancel my automatic payments. I thought it was illegal - but they insist it's not? So confused.

[krispy12]

How would you go about physically cancelling? Like calling or mailing something?

Well I talked to about 4-5 people at Discover & all tell me the payment plan is cancelled. I will see mid August if anything tries to go through again.

[AngelinaCat]

You would still be safer closing that account--though now you can't because of the negative balance. Could you borrow the $200 from someone, bring the balance up to date, then close it?