Banks need to respect their customers’ right to control their own account
Millions of consumers authorize companies to automatically deduct payments from their deposit accounts for recurring expenses such as subscriptions, memberships, a mortgage, credit card, or other monthly bills. To ensure that payments are timely, companies often seek out consumer permission for these preauthorized charges.
So, you just contact your bank or credit union and tell them no more automatic debits to that company and they take care of it, right?
Too often, the answer is NO
The Virginia Poverty Law Center operates a free predatory loan hotline. We get hundreds of calls from people with internet loans. Every internet loan we have seen is illegal in Virginia and we tell callers how to stop the illegal lender from debiting their bank account (because every borrower has given the lender the authority to debit their account for payments). More times than we can count, the person calls us back and says the bank or credit union won’t or can’t stop the debits. They usually tell them must pay for a Stop Payment Order that likely won’t work. So the bank ends up helping the internet lender trap their own customer into an illegal loan.
Congress enacted the EFTA in 1978 and said this:
“The EFTA also “sets minimum safeguards for consumers who arrange for regular payments (such as insurance premiums or utility bills) to be deducted automatically from their bank accounts.” These safeguards protect the consumer’s control over his or her own account”
“The potential of class actions is symbolically as well as practically important to consumers and to industry. Both groups will assess the seriousness of Congressional purpose on whether class-action suits are provided for in this EFT legislation. Included, no one can doubt congressional intent that institutions provide EFT services only in a beneficial, responsible manner. Excluded, the opposite may be assumed.”
Let’s hope the bank doesn’t try to thwart the will of Congress by attempting to force us out of court and into a biased and secret arbitration system.