Consumer Handbook to Credit Protection Laws (Part 5)
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Special Questions About Pre-authorized Plans
Q. How will I know a pre-authorized credit has been made?
A. There are various ways you may be notified. Notice may be given by your employer (or whoever is sending the funds) that the deposit has been sent to your financial institution. Otherwise, a financial institution may provide notice when it has received the credit or will send you a notice only when it has not received the funds. Financial institutions also have the option of giving you a telephone number you can call to check on a pre-authorized credit.
Q. How do I stop a pre-authorized payment?
A. You may stop any pre-authorized payment by calling or writing the financial institution, so that your order is received at least three business days before the payment date. Written confirmation of a telephone notice to stop payment may be required.
Q. If the payments I pre-authorize vary in amount from month to month, how will I know how much will be transferred out of my account?
A. You have the right to be notified of all varying payments at least 10 days in advance.
Or, you may choose to specify a range of amounts and to be told only when a transfer falls outside that range. You may also choose to be told only when a transfer differs by a certain amount from the previous payment to the same company.
Q. Do the EFT Act protections apply to all pre-authorized plans?
A. No. They do not apply to automatic transfers from your account to the institution that holds your account or vice versa. For example, they do not apply to automatic payments made on a mortgage held by the financial institution where you have your EFT account. The EFT Act also does not apply to automatic transfers among your accounts at one financial institution.
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