Do you depend on online bill pay as much as I do? It can definitely be a game changer for getting bills paid quickly and efficiently.
However, I recently discovered a couple of disadvantages to using online bill pay of which I was definitely not aware.
My discovery started with a phone call while I was working at home. It was a recorded message warning me of the impending shut off of my water.
For four reasons, I assumed (never assume) it was a scam call:
- I use online bill pay and have the water bill automatically paid each month
- I have it set up to pay early usually resulting in a credit on my account.
- The money was withdrawn from my account (I always confirm)
- I had not received a written shut off notice
I ignored the call.
After the second call warning me that the cut off was happening in two days, I realized that a phone call to the water department was necessary.
Sure enough, even though the payment had been deducted from my account, it had never been received by the water department.
I live in a rural area. The water department is not set up to accept ACH transactions.
Therefore, when the (third party) bill pay service for my bank deducts the funds, they cut a physical check, from my account, with which to pay the bill.
The bill pay service uses the same old-fashioned method that I would use to pay the bill, including mailing a paper check.
After calling my bank, I was referred to the third-party bill pay service to settle the issue. They were able to confirm that it had been sent out but never cleared.
Did I want to stop payment?
The fee was thirty dollars.
If the town happened to receive and deposit the check, and it was returned as non-payable, the town would then assess an additional thirteen-dollar fee.
The whole bill was eighty-five dollars.
My other option was to wait ninety days and, if at that time, the check had not cleared, the funds would automatically be returned to my account.
I chose to wait but that meant I had to high-tail it to the town and pay the bill.
While I am fortunate enough to have been able to choose this option, there are times and situations where either option could truly cause a financial hardship. (Like property taxes ☹)
Long story short, I have discovered:
If I have an issue with a payment made through my online bill pay, I will be dealing with a third-party service provider, not my bank.
(This may not be the case for everyone but it might be worth asking the question)
Also, if transfer by ACH is not an option, the service provider will pay the bill the same old-fashioned way that I would; by mail with a paper check.
This will have the same limitations that I would have if I sent the check myself (including fees for stop payment).
I do think that the advantages of online bill pay outweigh the disadvantages.
However, be aware that even in (especially in?) this technology crazy world, mistakes happen.
Don’t get lazy when it comes to oversight.
Make a habit of reviewing statements and ensuring that payments were posted as planned.
And most importantly, don’t ignore a shut off notice just because you assume it is a mistake!
Beware of the disadvantages of online bill pay and proceed with attention!
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