Automatic bank account deductions (slightly off-topic)
Posted: Fri Oct 19, 2007 5:57 pm
A common complain I see about various MLM scams is this: you give them your bank details for either a one-off or multiple payment, and then when you leave the company or cancel your order, they keep taking money from your account anyway - and often the only way to stop it is to close your bank account and open another.
How come the banks allow this to happen? In the UK we have what is called "Direct Debit", which works the same way (many people use it to pay monthly utility bills, etc). You give a company authority to take variable amounts of money from your bank account as and when. But if you want to stop it you just write to the bank and say "Don't give any more money to Company X", and that's it - they can make as many requests to the bank as they like, but no more money will be taken from your account. (Of course, if you still owe money to Company X then they will still seek to get it via other means, but that's another matter.)
Why does the US banking system make it so hard to stop these deductions?
How come the banks allow this to happen? In the UK we have what is called "Direct Debit", which works the same way (many people use it to pay monthly utility bills, etc). You give a company authority to take variable amounts of money from your bank account as and when. But if you want to stop it you just write to the bank and say "Don't give any more money to Company X", and that's it - they can make as many requests to the bank as they like, but no more money will be taken from your account. (Of course, if you still owe money to Company X then they will still seek to get it via other means, but that's another matter.)
Why does the US banking system make it so hard to stop these deductions?