So Verizon Hears the public cry and reverses their previous announcement of a new $2 fee for paying online. If you are tuning in late, please read yesterdays post first.
What I find more interesting is the statement they made of what they were trying to do.
They stated that they were trying to encourage customers to sign-up for other “AUTOMATIC PAYMENT METHODS” and that it was “designed to improve the efficiency of those transactions”
Now in the case you do not understand exactly what type of payment they are talking about, let me explain and tell a short story why you never want to sign-up for a method of this type unless you have plenty of money and have lots of time to sort out whether you are being charged correctly.
These types of payments come directly out of your checking account or credit card without your prior knowledge of what the charge is going to be. Oh.. I’m sure they will send you a text message or something like that a few minutes before hand.
Why is this such a bad thing. Its not if you know what the charge is going to be and can remember to have plenty of balance available in the case you either get extra charges (nobody gets those on their cell bill) you may or may not have actually made and it also has to do with the trust they will not make a mistake in the process.
Now the short story of personal experience.
About 9 years ago, I had a retail shop and accepted credit cards for the convenience of the customers. Like most small service and retailers, not many company’s want to deal with the little guy without charging you a arm and a leg. So I had run into a deal with a credit service provider that was reasonable at first glance and will not go into the horror stories of that mess.
The deal was I accepted credit cars and the money was deposited in my bank account as long as I followed the rules of proper credit checking with their service.
For the fees I would owe them, once a month, they would automatically withdraw from my checking account.
This all seems very reasonable but I was not allowed any other payment methods, just the automatic withdrawal of funds from my checking account. OK fine.
After several other company’s began dealing the same way, it began to make me nervous that if just one of them had a security breach, my account could be empty when I needed it most so I started a new account for anything other than electronic money transfers (checks only) and left this account just for the ones that required no paper.
After doing business with these folks for a number of years, I knew exactly what my charges to the account were going to be (a big waste of time to calculate every month) and would not allow the account to get more than 10 percent over what I knew was going to be withdrawn.
All happy about the protections I gave myself for about 20 months and then the day came…
I could not use a credit card to purchase inventory I needed in a online order… so I called the issuing bank to find out what was up. Well the automatic payment from my checking account was rejected from a lack of funds. How could this be… I grabbed my sheets I used to calculate and rechecked and found no problem with my math and had listed all the charges so I turn to my Local (regional) Bank and they tell me I have all sorts of rejections for the last several days and the charges are mounting for NSF every day for each.
A trip to the bank and a printed statement provided for the last week and I see that the credit card service had taken the correct amount out of my account but did so twice in the same minute. There was no reason for the bank to reject such a double dip as I signed a waver authorizing them to withdraw from my account whatever and when ever they wanted. I would have to fight to get my funds back but what about all the charges they caused me at no fault of my own ?
As it turned out (to keep this a bit shorter) This created a avalanche of NSF and all the bounced electronic transactions and fees cost me over $2,000. It is no help to me that I did get back the original double dip mistake. I also lost 2 days of work to sort the mess out costing me customers and money associated with them. Had I not got as active as I was, it would have put me out of business in 3 more days.
OK Now, it was a bit longer story than I wanted but I hope you understand that when you authorize them full access to your account, you are giving them your financial life. Do you really trust them that much.
Just think, you will never have to get upset about new fees in the future cause you will not really find out till its to late… the money will be gone. Oh, they will tell you in advance about new fees in a email trapped in your junk mail account of some fine print on your paper bill if you get one.
If you do trust them a bit further to think that their system is so secure that you will never have a problem.
Do you have the time and money to sort it all out when it goes wrong and I say this knowing you must fight to get your funds back, they will not just hand them over because someone made a mistake.
Look forward to many of these Merged-up somewhat monopolies to encourage you to do the same auto-drafting to your checking account. After all, they need money for something that does not go to the shareholders !
They say money at the speed of light and I say theft at even the speed of sound is to much for me.
MOOT ADVICE:
Lastly I will say that paying with a credit card and mailing a check to the credit card is the method that gives you the most rights and protections and you do not have to loose your funds while you argue the transactions. Keep everyone away from your cash-stash !
If everything is as safe and secure as they say today, tomorrow is a new day with new rules.
There are no secretes, just things you do not know about !