Electronic Checking Rules

Dear Dave,

How do you feel about giving companies electronic access to your bank account? I have my electric bill auto-drafted every month, but I'm afraid to give this information out to just anyone.

Mark

Dear Mark,

You're right to be careful about who you allow to have access to your personal account. I let folks have access to my account for normal, recurring things. I pay my utilities that way, have money auto-drafted to be put into mutual funds and stuff like that. What I warn people about is when they have an adversarial situation with someone like a collector or credit card company.

We had a situation here not long ago where someone owed a credit card company $1,500, and they gave them electronic access and permission to take out $1,000 toward paying off the debt. The collector then went ahead and took $1,500 - cleaned them out! And if something like that happens, what can you do? If you take them before a judge and it comes out that you owed them $1,500 and they took $1,500, you'll get laughed right out of the courtroom.

NEVER give collectors or credit card companies electronic access to your personal account!

Dave

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