Q. I pay many of my bills online; however, often there are issues with the payment being late. What advice may BBB offer in the matter?
A. Speed and ease make online bill payments a convenience most consumers enjoy, but the Better Business Bureau reminds consumers and businesses alike that it is not without some pitfalls.
Because there are risks to personal and financial information, BBB recommends consumers give careful thought in deciding to use online payment services as well as the method they choose. There are several online payment services and smart phone apps available. It is important to clearly understand the rules and process of payments.
There is a difference between auto-pay and bill-pay, and a key issue to consider is control over finances. Electronic bill pay allows you to instruct your bank or credit union to make a payment from your account. With auto-pay, you are giving the control to the business and they will remove the funds from your account. If a problem arises, bill pay gives you the ability to shut down the payment option anytime you choose with the bank or credit union. That is not the case with auto-pay.
Jim WinsettUtility companies which have critical due dates; often have issues with consumers as results of late payments. Locally, this BBB has received notification from Hamilton County Water & Wastewater Treatment Authority that routinely they have issues with online payment services. EPB customers have been the target of late payment email and telephone calls that are fraud and scams. Consumer beware.
What to consider when using an online payment option:
* Convenience: both offer a convenient payment method. By setting all your bills to be paid automatically, you are not as pressured to keep track of what needs to be paid when or paying them on time.
* Automatic payments with a company can be more difficult to stop than bill-pay, which you control through your bank. For auto-pay sometimes you have to notify your bank and your merchant, and typically need to do it in writing. That process may take one or two billing cycles for payments to stop.
* Identity theft. There is less of a chance you'll be a victim of I.D. theft if your bills are not mailed to your home and you are not mailing in paper payments with credit card or checking account numbers. Neither method offers 100 percent protection but online payments can provide more safety measures than an unlocked mailbox.
* Cost: some companies will charge you a fee for automatic payments with your credit or debit card. Do not accept this fee. If your biller wants to charge you, pay with a paper check.
* Losing track. Automatic payment plans, and recurring bill pay can make it easier to forget what gets paid each month and what day. This can lead to unnoticed bank errors or mistakes. When using an automatic plan, it is advised to keep a calendar of what payments are due and the date.
If you use automatic payments but decide to end those payments there are federal laws that help protecting you from fraud or abuse; however, there are steps that need to be taken for cancellation:
1. Call and write the company to inform them you are taking away your permission for the company to take automatic payments out of your bank account. This is called "revoking authorization."
2. Call and write your bank or credit union. Tell your bank that you have "revoked authorization" for the company to take automatic payments from your account.
3. Even if you have not revoked your authorization with the company, if necessary, you can stop an automatic payment from being charged to your account by giving your bank a "stop payment order."
Routinely, you will need to monitor your accounts. Tell your bank right away if you see a payment that you did not authorize, or a payment that was made after you revoked authorization. Federal law gives you the right to dispute the payment and get your money back for any authorized transfers from your account as long as you tell your bank in time.
Jim Winsett is president of the Better Business Bureau of Chattanooga.