is it illegal for a company to take money from your account without permission?

Question

basically i have a phone on contract and what happened in aprill 2007 there was a banking error and the monthly bill wasnt payed we had no idea of what happened untill october 2007 the money which was owed they took straight out of my account without notifying me is this legal. we have no direct debit setup with them we just pay with debit card every month

Answer 1

Sean,

Unfortunately, it is legal for any company with direct access (which you have signed for) to your debit/checking/savings account... It even happens with employers who have access via direct deposit... Debit cards have fewer protections than credit cards and folks are now starting to learn that this "free" service (i.e.: electronic checking) comes with many pitfalls and dangers... Go over all your contracts that involve your debit card and you'll see buried in the fine print, their lawful right to access your account...

Good luck...! Interesting question...
1EM

Answer 2

It is illegal to take money without permission, but that does not sound like what happened here. From what you say, a bank error prevented your April 2007 payment from being debited until it was corrected in October. By authorizing payment in April, you gave them permission to take the money out, even if it did not happen until October.

Answer 3

You really need to read the fine print. This actually happened to me once where Nextel was billing me and deducting money from my bank about un-authorized with no permission or fine print. Technically this is theft but it doesn't count when it is a giant corporation. Instead it is "an error on their part" and they are not liable.

You should read your contract carefully. If they are unauthorized to do so then go to your bank with a copy of the contract and complain in person as to why they allowed the unauthorized transaction in the first place. Change your account number and get new checks and a new debit card.

Then notify the Cell phone company by certified mail. Demand they cease and desist immediately and re-imburse you for any damages (bounced check fees, etc...). You need to demand re-imbursement and give them a time frame as defined by your state law, typically 30 days. Refer to your contract and re-iterate to them that they are in breech of contract which would allow you to terminate service with no penalties since the contract would now be null and void.

The key element is to use certified mail. Failure to do so transfers liability to you and renders all your actions null and void as if they never happened. Also never get angry and only call to get mailing addresses. We have only gotten results by researching the company and sending cetified mail to the CEO of the comapny. the customer services people never "have authority" to do anything.

Answer 4

You say there was a banking error and the amount did not clear your account? So essentially you paid with a debit card, but due to a banking error the money never actually went from your account to theirs...correct?

Then, yes they can...when you went down, paid the bill and entered your pin, you gave them authorization to clear that amount from your account.

This has happened to me before. I was at a drug store and made a purchase with debit...for some reason or another, the money was never removed from my account. I checked 4 days later and the money had been removed at a later date.

Answer 5

In April you gave them permission to take the money from your account via your debit card. This money, for whatever reason, was not taken in April. That permission is still valid, so when they took it in October, they did it with your permission.

Answer 6

To answer your question, yes it is illegal for a company to take money from your account without permission.

Now for your case. When you allow an entity to auto-withdraw, there is an implied consent. You have given them your permission by allowing them to auto-withdraw. In the future, please make single payments. DO NOT allow auto-withdrawals for phone, cable, utility companies.

Answer 7

It is legal if the company has not received payment, transfers the account to a collection agency, who in turn work with a law firm to put a lien on your account and take any money that they are due.

Answer 8

You have to look at the contract that you signed in the beginning and then threw away. It probably asked for an account number to be used as a back-up source of payment. When the bill wasn't paid that account was billed as per the contract. Read the contract.

Answer 9

If they had the access to your bank account they would have had to have the account number which means you would have to have provided it for them. If you had not signed up for them to take it from your account automatically than they have no right to take it and your bank had no right to give it to them. I would call your phone company and complain if that is the case and I would also make a complaint to the president of your bank.

Answer 10

No company is suppose to debit your account without your authorization. Contact your bank to dispute the charges and let them know that unauthorized activity has occurred on your account. Also, call the companies headquarters and inform them of this.