May 27 2008

A slight problem with paying bills online

I enjoy the convenience of paying my bills online. If I can go through a particular company’s web site to pay bills, I do that, or I have my bank draft a check and mail it to them on my behalf. It saves me an envelope and a postage stamp each time. Plus, when it’s all-electronic, it saves paper. Most of the time, I’m perfectly content with online bill pay.

But.

Recently, we canceled a service which drafted our bank account each month. We were told that our account would not be charged this month.

It was anyway.

I called customer service, and they explained that due to certain account settings (?) it still drafted a payment, even though we canceled our agreement. I had to send proof that the payment had cleared my bank, and they would refund the money within a few days. I’m expecting my money back later this week.

It’s a minor inconvenience, but it could have been a big problem if we didn’t have a little wiggle room in our checking account.

I have enough in that account to cover that old payment, and then a little cushion beyond that. And, I’ll be sure to keep enough to cover next month’s “payment” just in case they draft the account again (which I doubt).

I suppose this could have been avoided altogether if I was able to send a payment each month, rather than give them access to my checking account.

Have you generally had good experiences with paying bills online?



15 Responses to “A slight problem with paying bills online”

  1. In a situation like this any time you cancel a direct debit with the debiter, also go direct to your bank and cancel it with them in writing. That means even if they do try and take the money again, by accident or whatever, the bank won’t allow it. Will save a lot of hassle! :)

  2. We pay all our bills online, but do it manually, for the most part- so, we don’t sign up for services that automatically deduct from our bank account. I think it’s the idea of actually having control & knowing when money comes & leaves the account. We’ve gotten to where we even pay tithe online- though there’s something to be said for the physical act of actually dropping money or a check into the offering, so that wasn’t an easy decision for us.

    Joanna’s last blog post..Dill-y dallying

  3. I use my online banking service to pay all of my bills and do not allow the creditors/vendors to access my account. My credit union, Century Heritage Federal Credit Union, removes the money from my account and puts it in escrow so it is all gone on payday which is very convenient for budgeting purposes.

    I pay everything this way b/c the bank cuts the checks and sends some payments electronically. Some payments are as small as $7.00, but it saves me a stamp and an evelope.

    I never permit anyone to dip into my account. Too much room for error. If I have to make an over the phone payment, I’ll take the fee and use a credit card (which I then pay off) to avoid potential catastrophe.

    Works really well for me.

  4. I use ING to pay my bills online. If the company accepts online payments then ING sends the electronic payment, otherwise it sends a paper check to the company.

    You can set up recurring payments from inside your ING account or you can do it manually. The credit card/car loan etc. company does not have access to your checking account so you have total control over your money.

    The electric orange checking account earns interest so that is a big plus. You can also set up different accounts like a car payment account, grocery money account etc and make the transfers to those mini accounts like the person who talked about the escrow accounts so that you do not see that money as part of your available balance and don’t accidentally spend the grocery money on lip gloss or something. :-)

    If you have an ING account already I would suggest you do all your bill paying through them by opening up the electric orange checking account. (free to open, no minimum balance and it earns interest.)

    If you do not already have an ING account then I can email you a referral where you can earn a bonus $25 (I will get a bonus $10 for referring you as well). Let me know!!!!

    lulugal11’s last blog post..Changing How I Save Money in My ING Accounts

  5. Most of the website with monthly membership have a little checked box for monthly payments renewal. If you don’t check it out and forget about the website, you will be charged until you action. They are becoming more tricky then ever. A lot of people will be scammed in the future….

  6. I have a lot of our bills paid by direct withdrawal from our account. I’ve rarely had a problem. It is a little nerve wracking when they keep taking money after the payment should have been canceled! I recently had to use a credit card that I haven’t used for almost a year (to float a large repair bill on one of our vehicles while waiting for our stimulus check to arrive) and when I was using it last I had it set up to remove the entire balance when the payment was due, from my checking. I just happened to notice it was set up that way, or they would have been withdrawing $950 from our checking account! That would not have been good, as we don’t keep that much extra in our checking!! Clicked through from BlogHerAds.

  7. Thanks, Deborah, that’s good to know.

    Generally, I like paying bills online, but there are sometimes problems.

    1) Sometimes they keep working when you don’t want them to. I’ve heard many, many times of people having trouble stopping the payments, especially if they are trying to cancel or refrain from renewing a contract. If I were going to end a contract, I would try to end the automatic payments first (and send them in manually) if I decided it early enough. And I would definitely keep extra money in the bank. I recently switched checking accounts and everything went well. They were even able to tell me exactly which payment would be the first one moved to the other account.

    2) Sometimes they don’t work when you want them too. One of my utilities claims to have online bill pay, but then the money never comes out and then I get charged a late fee. I have fallen for this twice already!

    3) Sometimes the wrong amount of money is taken out. This is more likely to happen with the slimier companies.

    In most cases I prefer to transfer the money online myself rather than automatically, just because I trust myself more than I do the companies. Also, if the amount varies each month, it’s easier for me to notice in time make sure to have enough available.

    However, I do use automatic withdrawal both for Netflix (which has no other option) and for my mortgage. Before I did this for my mortgage, I did whatever it took to make sure that payment arrived before the first of the month (which is when it was due and when I get paid). However, with the automatic deduction plan, they allow me to wait until after the first of the month with no change in the interest they were charging me, so that was a no-brainer. (If I decide to pay off my mortgage early, though, I may switch back to paying by check and then when I’m sure they’re no longer withdrawing the money, I’ll make my final payment.)

    Oh, I also have automatic withdrawals for my Roth IRA, and probably should start them for my charitable contributions as well.

    But, I’m definitely a little paranoid about these, especially the automatic withdrawals.

  8. My bank just switched hands and is starting to charge for his service. I’m paying my bills the old fashioned way until I figure something out. . .

  9. I always pay bills online when the service is available. And I’ve never had a problem.

    BUT… I generally avoid those payment systems where the money is debited from my account automatically each month. I like the control of me being able to go online ad manually pay the bills each month.

    That way issues like these never come up. And we pay the bills when we have the money in the account. So, just incase we had been shopping and funds were low in our checking account, I could easily wait till Hubby’s next paycheck and then pay the bills, as long as there was time before the due date.

    So, really is boils down to me wanting the control over exactly when my bills are paid.

  10. Basically, when online bill pay works its a good thing. With a few caveats…ie…ample available balance, proper timing etc. But I’m one to not let things go along automatically. Guess I’m just a little obsessive about it. But online bill pay does save fuel ( at $4. plus a gallon thats a lot) and it does save postage. Weigh the good and the bad. For me…even though I don’t use auto bill pay. The option to pay online is great!

    Debbie’s last blog post..Elephants, Peanuts and Pedophiles

  11. I’m actually worried about this with my gym membership that I just canceled with Gold’s. They require automatic payments, so we didn’t have a choice but to allow them to charge our credit card every month. I’ve heard that a lot of people have problems with getting them to stop. We’ll see what happens!

  12. I’m with Joanna. I like using my bank’s online bill pay. Not only do I have total control, I get all these advantages too:

    1. I can see my whole payment history on one page.
    2. I can easily compare the scheduled payments to my account balance.
    3. I don’t have to remember logins and passwords to each biller’s website. Since I use hard-to-crack (and thus hard-to-remember) passwords for everything, this is huge!

    Ginkgo100’s last blog post..The polar bear population and the Endangered Species Act

  13. I think they will refund the money. In this competitive market, they are forever hunting for new customers, and a good client with reliable credit history is worth two in the bush.

    jeflin’s last blog post..Resilient Stock Market Offers Relief

  14. I have had this happen too – an automatic debit keep debiting even when it was supposed to stop. Therefore I stopped doing *any* online debiting, and although I pay all my bills online (save one) I do it all manually and not automatically. For me it feels “safer”.

    Safety is my own illusion of course but once bitten, twice shy. :)

    paidtwice’s last blog post..May Grocery Challenge Update

  15. We do a lot of our stuff on line, but we too have run into snags. Especially with our electric company and gas companies. A few times we were running close to the due dates on the bills so my husband would pay it online. But then they would start automatically drafting our accounts. Even when we chose to pay it just once that way. That became real annoying. They did not “refund” but rather credited our accounts. Talk about wrecking your budget! No we are super careful with which companies we pay online vrs. the old fashion way!

    Donna(mom24boyz)’s last blog post..Frugal Floor Cleaners

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Hey! I'm Kacie, wife to Shane and mother to Jonathan (7), Vivienne (5) and Amelia (2) . I write about my family's finance: how we save money, improve our spending, and plan for the future.

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