My mother in law does not check her bank statement each month. Recently I looked at her statment for her and found a suspicious charge for $14. After doing a little investigation, I discovered that the charge was for a gym membership. My mother in law does not belong to a gym, nor has she ever set foot in one. After doing further investigation, I found that the gym has been withdrawing $14 per month from her account since 1987! The bank has no records of the original authorization, nor does the gym. My mother in law adamantly denies having ever contracted with the gym. Is there anything that can be done through the bank? Wouldn't the bank need to keep some proof of authorization for the withdrawal?

Whether the withdrawal is made using a piece of paper (called a demand draft) or it is made electronically, the applicable rules assume that consumers review their periodic statements for accuracy. In general, if it is a paper item, then the consumer has one year to draw it to the bank's attention. If it is electronic, then the consumer has 60 days to draw it to the bank's attention.

However, regardless of the medium used, the time frame began to run when the first debit appeared on her statement back in 1987.

In essence, the responsibility for reviewing her bank statement and the attendant loss from failing to do so is your mother-in-law's. She was in the best position to determine if the charges were appropriate.

No, the gym would be the party responsible. Their bank requires them to comply with ACH rules, which include retention of the authorization (or it should, anyways).

This could be interesting. My take on this is that the gym is required to retain the original authorization for a period of 7 years from the date of inception (although others may state they must maintain for 7 years after the last item). This has been going on for 18 years, so chances are the original forms are gone. Secondly, your MIL can dispute anything within the past 60 days, and claim unauthorized, and the bank must return. The clock starts with each payment, not just at inception as anonymous stated above.

You are looking at a total of about $3,000 in unauthorized transactions over the past 18 years, and the cost of an attorney to pursue this would probably be more than what your MIL could recoup. If you have a local action reporter for TV, radio, or newspaper, a call to them may get some prompting from the health club to reimburse. No one wants dab press these days.

Two questions - has your MIL learned to read her statement? And, where can you join a gym for $14 per month? They run at least $35 here!!!

Well, I hope your mother-in-law banks at Happy's bank. He's going to give you $28 back when no one else would:

(i) Is received by the institution no later than 60 days after the institution sends the periodic statement ... on which the alleged error is first reflected;

He really is a sweet guy. Everybody says so.

I'd suggest you read page OR91, return reason code R10...the RDFI has been notified by its customer, the receiver, that the originator of a given transaction has not been authorized to debit his account. The receiver may request immediate credit form the RDFI for an unauthorized debit. The request must be made in writing within 15 days after the RDFI sends or makes available to the receiver information pertaining to that debit entry...

In the ACH environment, each transaction has the ability to be returned in and by itself, not from the date of the original (first ever) payment, but from the point it was done. And I'd probably go to bat for my customer and work to get the rest of it back as well.

Post deleted by Michele Petry

I'm not sure where anon is coming from. The NACHA rules are pretty clear (as is Reg E).

Now that they are aware of unauthorized transactions, I think it's in the banks best interest to return what they can...within 60 days. The MIL would have to work with the gym company for the other charges.

If the charges within 60 days can be returned, the ODFI is prohibited to send future unless they receive new authorization. So, you can help the customer in that way.

But I agree with Happy, I would still go to bat for my customer. I mean, if the gym doesn't have the authorization now, you can make the argument that they never did. And since they can't prove that they ever got proper authorization, then they should pay back those funds. But the fact that the MIL never checked her statement (ouch!!), could be the determination here.

Post deleted by Michele Petry

Post deleted by Michele Petry