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-   -   Why I don't like direct debit (http://www.early-retirement.org/forums/f28/why-i-dont-like-direct-debit-81382.html)

MichaelB 04-02-2016 10:25 AM

Why I don't like direct debit
 
Checking DM's accounts this morning. Her house sold on 3/4 and both gas and power companies did their final reading the previous day, sent the final bill the following day. I was surprised to see new month end invoices. Looks like they have continued billing. This is why I don't like direct debt - there's no way to turn it off. Their billing departments are only open on weekdays, do looks like I'll have a busy monday morning.

euro 04-02-2016 10:31 AM

Quote:

Originally Posted by MichaelB (Post 1714864)
Checking DM's accounts this morning. Her house sold on 3/4 and both gas and power companies did their final reading the previous day, sent the final bill the following day. I was surprised to see new month end invoices. Looks like they have continued billing. This is why I don't like direct debt - there's no way to turn it off. Their billing departments are only open on weekdays, do looks like I'll have a busy monday morning.


I agree - I won't give ANYONE direct debit access to my account - for exactly this reason

W2R 04-02-2016 10:37 AM

Quote:

Originally Posted by MichaelB (Post 1714864)
Looks like they have continued billing. This is why I don't like direct debt - there's no way to turn it off.

Sometimes you have to turn it off at both ends once you are sure all has been paid. By that I mean you need to contact the electric/gas/water/whatever company, and your bank, both. Your bank has no legal justification to send money to them without your permission.

I had no trouble with my various utilities payments when I moved. It's confusing when you switch like that, because there are deposits that can lower the bill at the old house, for example, connect/disconnect fees sometimes, and because the final bills are usually delayed a couple of weeks beyond their usual date so that they can be computed (I suppose). Remember that often these companies may normally bill you a month or more after they read the meter so check into that possibility. I never did contact the bank when I switched utilities to my new house last summer, but I should have. I did that the previous time I moved. If the deductions hadn't stopped this time, I would have been down there faster than greased lightning.

I have paid all my regular bills (other than insurance) by automatic bank deductions since May of 2000, and they have always been correct thus far. I check. The convenience is worth a LOT to me, because I unfortunately have a very absent minded mentality and this way the bills are never paid late.

MBAustin 04-02-2016 10:44 AM

I don't like it either and so far have been able to just say no. I do pay almost all of our bills using the bank's bill pay service, but I manually put in the amounts each month except for the bills that are always the same amount.

Even then things can get messed up - our (disguised) address is 9999 Spruce Drive and when someone moved into nearby 9999 Spruce Parkway, they told the city that their address was "Drive" and we started getting their bills. It was a huge mess to sort out.

Chuckanut 04-02-2016 10:44 AM

Same here. No direct withdrawals from my account. Modern banks with bill payer systems let us tell the bank who gets the money, when they get it, and how much. Works for me.

Midpack 04-02-2016 10:50 AM

Quote:

Originally Posted by Chuckanut (Post 1714881)
Same here. No direct withdrawals from my account. Modern banks with bill payer systems let us tell the bank who gets the money, when they get it, and how much. Works for me.

+2. Our (not so modern) bank notifies DW for each charge submitted before paying, they don't pay anyone without getting her OK first...great system IMO.

sheehs1 04-02-2016 10:54 AM

I agree also MichaelB. No auto drafts out of my accounts.

MichaelB 04-02-2016 11:14 AM

Unfortunately, this is not my account, it's DM's and the direct debit was set up years ago. I've already transferred all the income to another bank and am waiting for these utilities to clear before closing the account entirely.

Quote:

Originally Posted by Chuckanut (Post 1714881)
Same here. No direct withdrawals from my account. Modern banks with bill payer systems let us tell the bank who gets the money, when they get it, and how much. Works for me.

Quote:

Originally Posted by Midpack (Post 1714883)
+2. Our (not so modern) bank notifies DW for each charge submitted before paying, they don't pay anyone without getting her OK first...great system IMO.

Interesting. So, how does this bill pay work? The business submits a debit request to the bank, you are notified, log in and approve?

Chuckanut 04-02-2016 11:55 AM

Quote:

Originally Posted by MichaelB (Post 1714899)
Unfortunately, this is not my account, it's DM's and the direct debit was set up years ago. I've already transferred all the income to another bank and am waiting for these utilities to clear before closing the account entirely.





Interesting. So, how does this bill pay work? The business submits a debit request to the bank, you are notified, log in and approve?

Sounds like you are doing the right thing.

Midpack 04-02-2016 11:55 AM

Quote:

Originally Posted by MichaelB (Post 1714899)
Interesting. So, how does this bill pay work? The business submits a debit request to the bank, you are notified, log in and approve?

Sorta. Of course, DW established which businesses with the bank. Then when an approved business submits a debit request, DW gets an email from the bank (we also get an email from the business at the same time). If DW questions the charge, she tells the bank 'do not pay' - and we question the business to clear it up (we were double charged by a business once). If it's legit, DW does nothing, and the business is paid 7-10 days later.

Guess we were lucky with our bank. Not sure we'd have set up auto pay for utilities, phone, etc. if the bank automatically paid. Although major credit card monthly balances are paid without the 7-10 day 'approval' process.

It's a lot easier than writing checks, snail mail or driving. Some businesses charge a fee for snail mailers, or an incentive for autopayers - I suspect they all will eventually...

athena53 04-02-2016 11:56 AM

I allow direct debit only if there is no alternative. My last health insurer (Coventry) insisted, but at least they were good about stopping when I changed carriers. The only one I have now where there appeared to be no alternative is Planet Fitness. No plans of quitting and they take out exactly what they said they would, when they said they would.


I've got our mortgage set up to be paid on the first of the month form my checking account, but I control that through the Bill Pay function.

RobbieB 04-02-2016 12:29 PM

It can be a very good thing also, in fact it served us well.

One winter Pops got sick with pneumonia (Detroit, MI) end of December. It was very cold that year with lots of snow. He was in the hospital for a month followed by 3 months in rehab. If the gas was shut off the pipes would have froze and split and the house would have flooded when they thawed.

Good thing the utilities were on direct debit - :)

MichaelB 04-02-2016 12:48 PM

Quote:

Originally Posted by Midpack (Post 1714933)
Sorta. Of course, DW established which businesses with the bank. Then when an approved business submits a debit request, DW gets an email from the bank (we also get an email from the business at the same time). If DW questions the charge, she tells the bank 'do not pay' - and we question the business to clear it up (we were double charged by a business once). If it's legit, DW does nothing, and the business is paid 7-10 days later.

That's a good system, I'd sign up for it in a second. Most of my pays are on the credit card, where it is easier to file a dispute and deal with a bad charge.

I just signed up for a direct debit to our account, against my better judgement. DM's ALF has reported not receiving the monthly check I mailed twice in the past 6 months. Even as I signed the debit authorization I was asking myself if they lost it on purpose just so I'd sign up. No doubt the lost check is on their end, as both times other checks written and mailed the same day had no problems.

Hermit 04-02-2016 12:49 PM

Quote:

Originally Posted by W2R (Post 1714875)
...
I have paid all my regular bills (other than insurance) by automatic bank deductions since May of 2000, and they have always been correct thus far. I check. The convenience is worth a LOT to me, because I unfortunately have a very absent minded mentality and this way the bills are never paid late.

Most of my recurring bills are also on auto-pilot for the same reason. :blush:
I haven't had any problems.

fh2000 04-02-2016 12:50 PM

All my payments are automatic but done with credit card. I guess if I have to cancel any service, I would just go online and remove credit card payment method, and it would fail on their end if they over-charge.

The downside of using credit card, is now they send me new card with new number so often due to potential fraud, I have to get online (now 12 of them) to change each one of them.

REWahoo 04-02-2016 12:58 PM

I had one bad experience years ago with direct debit so all my auto-pays are set up on credit cards except for our two Medicare Supplement bills. BC/BS wouldn't accept auto CC payment, only direct debit, so I reluctantly agreed.

youbet 04-02-2016 01:05 PM

Quote:

Originally Posted by Midpack (Post 1714933)
It's a lot easier than writing checks, snail mail or driving...

I've settled in on a method which gets me the best of both worlds. I receive bills in the mail (most monthly bills all arrive within 3 - 4 days of one another). Once or twice a month, I look them over for correctness and for info such as an announcement of upcoming rate changes, etc. Then I go online to my bank's electronic bill paying service and pay them.

Once on line, I just look at a list of payee's I set up long ago, pick out the one I want by typing the amount I want to pay into the appropriate field and click "pay." No writing, no snail mail, no driving. Yet I get all the advantages of personally reviewing each bill for info before telling the system to pay it. It seems like several times a year, my cable provider or cell phone provider or sometimes a utility makes an announcement in the fine print that I wouldn't have known about if I was on auto bill pay.

This gives me the control and information I like but frees me from "writing checks, snail mail or driving."

harley 04-02-2016 01:14 PM

Quote:

Originally Posted by fh2000 (Post 1714966)
All my payments are automatic but done with credit card. I guess if I have to cancel any service, I would just go online and remove credit card payment method, and it would fail on their end if they over-charge.

The downside of using credit card, is now they send me new card with new number so often due to potential fraud, I have to get online (now 12 of them) to change each one of them.

I do all my payments that I can using CC too. I've gotten so many new CC numbers over the years I keep a file on my computer showing which companies get paid from which card, so when I have to go in and change them I don't miss any. It's a PITA, but doable.

I do have direct debit from my account for a few payments (like the mortgage) that won't let me put it on a CC. I should probably look into Bill Pay, but back when that first started they were charging for it so I didn't do it. (knock knock knock on wood) I've never had a problem with my direct debit payments. And I am able to go in online and turn them on and off without any problem. I guess it depends on the company. There are also bills that I do direct debit on that are one time payments. Things like property tax bills that charge an arm and a leg a convenience fee to use the credit card. As long as they aren't automated I don't see how you would get into trouble with it.

REWahoo 04-02-2016 01:29 PM

Quote:

Originally Posted by harley (Post 1714976)
... I keep a file on my computer showing which companies get paid from which card, so when I have to go in and change them I don't miss any.

I keep a similar file and have a CC dedicated to auto payments only. I don't use it for anything else so when it comes to changing it's an all or nothing exercise.

Alan 04-02-2016 01:40 PM

Quote:

Originally Posted by REWahoo (Post 1714982)
I keep a similar file and have a CC dedicated to auto payments only. I don't use it for anything else so when it comes to changing it's an all or nothing exercise.

I do the same.

I have everything I possibly can set on auto pay, and apart from apartment rent everything is charged to that one credit card. For the apartment I have it set to be paid from the bank automatically 3 days after it is due. This means I can log onto the rental company portal and check what is due to be paid before it goes out. If I'm traveling and not able to log on then no worries.


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