Banks say that paying bills online is quicker, easier and more efficient than the old-fashioned way of writing checks and dropping them in the mail, but, recently, some Bank One Corp. customers have found the Internet method to be an expensive practice.
Chicago-based Bank One this month revised its online bill-paying policies. In many cases, that has resulted in money being taken out of customers’ accounts several days sooner than in the past.
Some customers said they weren’t aware of the problem until after they were hit with overdraft fees because they allowed their balances to fall too low to cover their checks.
The new policy is taking the “float”–the time between when a payment is made and when the person being paid actually collects the money–from customers and giving it to the bank, some Bank One customers complain.
“They’re taking the money out of my account days before the payee is actually getting any money. That’s my gripe,” said John Montgomery, 37.
He is now looking for a new bank for himself and his small business, angry at what he calls the bank’s “continual nickel and diming of customers.”
Customers were notified by e-mail that the changes were coming, Bank One spokesman Tom Kelly said.
When customers use a computer to pay bills to a company using electronic fund transfers, the movement of cash is instantaneous and no check is ever written.
The problem some customers have run into is with electronic payments that involve the bank writing a check. In instances where the business being paid doesn’t accept electronic fund payments, Bank One writes a check that is mailed, Kelly said.
For electronic payments, the money generally has to be in the Bank One customer’s account two days before that payment is due, he said. In cases where the bank has to write a check, the money has to be in the account five days before.
Bank One deducts the money, even though it is several days before the person being paid receives the cash.
Electronic payments make it easier for many customers to manage their money, and most realize that they shouldn’t count on there being days between when a check is written and when the money is actually taken from their account, said Betty Riess, Bank of America spokeswoman.
“When you think about it, when you write a check, you’re supposed to have the money in your account,” she said.
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Checking records
Consumers can get in trouble with their checking accounts if they don’t keep good records. Here are some tips from experts at bankrate.com on how to maintain an account:
– Record the amount of each check you write in your check register or an online software program.
– The same goes for withdrawals at ATMs.
– Open your monthly bank statement instead of throwing it into a drawer.
– Scan the statement to determine if the balance is roughly what you think it should be and that there are no unusual withdrawals or unexpected fees.
– Go through your check register and check off the checks that have cleared as well as all ATM transactions.
– Immediately call the bank if you find a problem.
– Try to keep a running balance between statements.
– If you think you’ve overdrawn your account, contact the bank at once. If it’s a first offense, the bank may waive the penalty fee, currently averaging $25.80 per bounced check.
ASSOCIATED PRESS
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Edited by Lara Weber (lweber@tribune.com) and alBerto Trevino (atrevino@tribune.com)
