Family Issues

One convenient way of paying regular bills is through automatic debit from bank accounts. This saves time, checks and postage.  Today, monthly debits are pre-authorized by people from mortgages, student loans, utilities, car payments, premiums for life insurance and memberships for health clubs.  However, this could spell trouble if the something goes wrong with automatic payment.
When a third party is involved, unusual problems usually arises.  Once the bank fails to automatically debit on the due date, late fees as well as damage on the credit report will be incurred.

But what if no payment was made after all?  A life insurance on monthly payment mode being paid by a man was unaware that the bank discontinued the payments due to a systems error.  Eventually, the policy lapsed but the family did not realize until the death of the man. The family struggled in the collection of the benefits.

Halting unauthorized debit is a right of any person. When you are encountering a problem, the quickest way is to get in touch with a bank personnel not the business accepting the payment.

Federal law states that a “halt” must be supported by a written request or a telephone call within three working days before the debit schedule. An oral request must be confirmed through writing by the bank within 14 days after the phone request.
Do not just settle the late fees due to the bank’s default. Inform the bank of its error within two months of the billing period reflecting the inaccuracy. In general, a provisional accreditation must be done by the bank within two weeks while an investigation is being carried out.

If you are worried that your credit history has been damaged because of the bank being unable to settle the payment, request for a copy of your credit report from any of the credit bureaus. If a late payment was indeed reflected, get in touch with the bank and ask for an explanation regarding the bank’s error. Furnish the credit bureau with a copy of the letter for proper correction of information. This will solve the problem but if it does not, seek the bank’s intervention in providing the correct information to the credit bureau. If it still fails, you always have the right to write a short explanation in your file stating the default on the part of the bank.

Automatic debit system has its advantages and disadvantages.  Proper coordination must be done by the account holder with the bank in order to avoid late payments.

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