Slashdot Mirror
Pitfalls of Automated Bill Payment
theodp writes "A few months ago, the NY Times' Ron Lieber extolled the virtues of allowing utilities, phone, and credit card companies to pull whatever you owe from your bank account. Big mistake. Lieber's readers fired back, telling him he was out of his mind for suggesting that they give billers unfettered access to their credit cards and bank accounts. Now Lieber goes through five of the glitches that can occur with any of the various methods of setting up automatic payments: 'You can give each biller permission to pull the full amount from your bank account. You can use the online bill system at your bank to push payments out automatically each month. Or you can charge every bill to your credit card and give only that card company permission to pull money from your bank account when the credit card bill is due. Each of these methods has its potential shortcomings ...'" What kind of payment automation do you use, and why?
But none of them are automatic withdrawals. Every month I take the time to go to the website of the biller in question, and tell them exactly what I want to pay. That way if there's a mistake, It's my mistake. I also have a specific checking account I use for online payments. I only transfer enough to pay what I said I'd pay and not a dime more. Just as a layer of insulation between my checking account and my bill account.
Enjoy Every Sandwich
I haven't heard of paytrust before, but is it really safe to have a third party looking at your bills?
Depends on what you are worried about. There's nothing in any of the bills I send to Paytrust that would bother me if it became public knowledge. If someone wants to alert Al Gore because I used too much electricity last month, I'd love the opportunity to laugh and slam my door in his face.
I pay my credit card with a direct transfer (my checking account and credit card are at same bank), so they don't get that statement. The cool thing about Paytrust is that you can send ANY bill to them, including ones that don't offer automatic payment. And if you want to change the account that is used to pay the bill, you only have to make a change in one place.
You might want to talk to your bank about their policy on overdrafts. I found out, the hard way, that when my checking account had insufficient funds to cover a check I had written, they just took the money from another account I had with the bank. They had never asked me for permission to do that.
The cause of the problem was a data entry error by the person who reads the amount of the check and prints it on the check with a MICR printer. They got the numbers right but moved the decimal point one place to the right. From there on, everything operated on automatic pilot, with no human intervention until I received my bank statement and spotted the problem. The bank's attitude was that the most efficient way of doing business was to automate all processing and decision-making, fixing any problems after the fact, if a customer complained. I closed all my accounts with that bank, which is now part of Bank of America.
Mea navis aericumbens anguillis abundat
True.
My phone/internet company actually wants even a little fee for not using automatic
debit payment.
When I moved into my last apartment I decided to do the auto bill pay. I'm just lazy with paying things and sometimes I'll forget to pay something.
Well, for those of you that pay a gas bill, you know they bill you an "estimated" rate, and then the actual the next month. Well, for a small apartment who's gas bill was maybe $20 for a month, they decided to take out a $320 "estimated" payment. They had no idea why it was so out of whack with the actual, but it was what it was. Normally you just send in an "estimated" payment as well, they just readjust your bill, and send you the actual the next month. Well, with the automatic payment, the bill said $320, and that's what they took.
It ended up just being that I told them to keep $320, and I just wasn't going to pay my bill for like 18 months. Which was fine with them. But they never actually fixed the estimation. The next bill, I had a $300 credit, following I owed $300, next month I had a $280 credit, etc. etc.
Long story short, you don't know what these people are going to charge you with. They take money first, and then just deal with you later if you don't like it. I'd rather pay a late fee, than deal with a CSR rep on why they took too much money.
I've been a PayTrust customer for a long time. I was originally a PayMyBills customer, but the service has been the same even after they were bought out. It works exactly as advertised, and I'm completely satisfied with what they do.
I use them because I am simply terrible at keeping track of paperwork. I know some people can do it. My mother can't understand why I can't do something that is so easy for her, but I fail miserably when I try. Things stack up, I lose track of which ones I paid with a credit card when they call me to collect the delinquent accounts, and if I want to look through my history, my files were so terrible I'd never find what I needed.
Then there was PayTrust. I don't think of it as automatic bill payment. Instead, it's an automated filing service, and a check writing service. They receive bills, and file them into various categories for me, keep track of which ones I haven't yet paid, and after I review them and tell them how much to pay, they print and mail a check on my behalf. The few bucks a month they charge much more than covers the late fees I used to incur by losing track of things. Even if it weren't for that, their fee would be worth it for hassle reduction, and for having easy to access, categorized records.
They have the ability to automatically pay things if you want. I use it for a few small, fixed costs, like my phone bill for the DSL line. My credit cards are set to automatically make a minimum payment before it's due if I haven't reviewed and manually set a payment amount.
I have had zero problems with their service ever. The fearmongering is completely misplaced, IMO. If I don't tell them to pay an account, they won't. I have full faith in that, because they have always handled it correctly in the past, and have no incentive to try to slime something by. I'm even a privacy nut, but really, there's nothing on my credit card that I care if people know. In a worst case if someone someone stole all their records and published them, they'd find out that I've *gasp* paid for porn a couple times. Bring it... The risk-reward profile is fine.
OTOH, I would never authorize a phone company to autobill my credit card (pull billing). Phone companies are detestable, soulless, unethical piles of crap, and have not earned the trust to have the responsibility of billing me the same amount every month and not silently try to tack on more services. I completely agree with TFA's criticism of this method.