|
 |
Home >> Accounts >> Checking Accounts
Company Debits Account Too Soon: What Now?
I asked a company to deduct $200 from my account on the 20th of each month starting June 20th. They started doing this on March 20th. Today I asked bank to return March, April, and May payments, since I did not authorize them to make this deduction until June. Should the bank be able to do this for me? When should the money be back in my account? What regulation covers this type of automatic debit?
|
Untitled
|
 If you authorized payments beginning in June, the authorization would not have been valid before June. If the transactions were electronic, via the automated clearinghouse (ACH), or by debit card, and if your account is a consumer deposit account, you are protected by Federal Reserve Regulation E, but you must act quickly. Contact your bank at once to file a claim that the March, April and May payments were not authorized. Depending on when your account statements are provided, you may be liable for one of those transactions.
Your bank will ask you to provide a written statement that the transactions were not authorized. Although the statement is not legally required for you to use your Regulation E protections, it will help your bank recover the funds after it reimburses you, so please complete the statement (the bank may supply a form) as quickly as possible to assist the bank in getting the money back.
It is important to act quickly, because the regulation provides that you'll be liable for unauthorized transactions occurring more than 60 days after your first account statement showing an unauthorized transfer from your account. That March 20 transaction appeared on a bank statement issued sometime after that date. The 60-day period is counted from the date that statement was delivered. For example, if the statement was available to you on March 21, 60 days would have ended on May 20, and the May 20 transaction would have just squeaked in under the wire to keep you protected. The point here is that you really must review your statements promptly after delivery and take action right away if there's something amiss.
If the deductions from your account were made with paper checks not signed by you, they would be called "remotely created checks". You also have protections, under Federal Reserve Regulation CC. In this case, you would have to complete a written statement under oath that you did not authorize the check in that amount, payable to the named payee, on or before the date of the check. Your bank can then reimburse you and recover the funds. The window for making your claim is a bit different, but you still need to act promptly.
Published on BankingQuestions.com 6/02/09
|
| |
|
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
