Problems with easy payments via internet...

Extracts from Automated Payments Pose Growing Problem as Practice Skyrockets, Consumers Encounter Obstacles To Canceling Charges; Credit vs. Debit By Carol Hymowitz and Elizabeth Bernstein for the Wall Street Journal February 22, 2006 As more people make use of automatic payments to pay their bills, some consumers are discovering how difficult it can be to cancel these arrangements. Debt counselors, lawyers and Better Business Bureaus around the country are hearing an increasing number of complaints from consumers having problems stopping the recurring bills charged to their bank accounts and credit cards. Many people seeking to halt these automatic payments are confused by the rules they must follow, which differ depending on whether payments are linked to a bank account or credit card. Some people have filed lawsuits against vendors or their banks to keep the charges from recurring; in December, Internet service provider America Online, a unit of Time Warner Inc., agreed to pay as much as $25 million to settle a consumer class-action lawsuit over the company's billing practices. While automatic payment arrangements are easy to set up, consumers and advisers say they can be difficult to cancel. Because vendors are reluctant to give up the stream of payments that come with automatic debits, "they will make it as difficult as possible," says Elizabeth Warren, a law professor at Harvard. Credit-card companies say some consumers mistakenly believe they need to contact only their credit-card issuer to stop recurring charges. In fact, it's up to the consumer who links payments to a credit card to contact the vendor to get them to discontinue regular charges. One action consumers can take is to dispute a recurring charge in writing within 60 days after it shows up on a statement. Doing this each month, however, requires vigilance and effort on the part of the consumer. Under federal law, a bank must stop making automatic deductions from your account if you so instruct them, either orally or in writing, at least three days before the payment is made. However, some banks also require written instructions, which they must tell consumers to provide. Once canceled, the bank is required to stop all future payments. It's advisable for consumers to also notify a merchant but it is not required. Some consumers have resorted to lawsuits to stop automatic payments. Some experts advise that consumers are better off paying bills online via their bank's Web site ... The automatic plans also could result in the consumer relinquishing negotiating leverage with vendors or landlords. For example, if you have a leak in your apartment and your landlord won't fix it, you can't hold back rent until the problem is fixed.

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