What legal recourse do I have when an institution does an unauthorized ACH debit to my checking account?

Due to financial hardship I defaulted on a payday loan. The company sumitted the check and it bounced. approximately 3 weeks later the ACH debit to my account was for half the amount of the obligation and never authorized. My bank paid the funds and I incured NSF fees.

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  • 1 decade ago
    Favorite Answer

    You authorized the ACH! Read the fine print in your payday loan contract; it's standard procedure.

    Rather than attempt to get the full amount you owe, the payday loan company will submit smaller amounts for ACH debits. Typically they review your account, take note of the day you are typically paid by your employer, and submit the ACH the night before your funds are deposited into your checking acct by your employer or by you at the bank.

    Additionally, payday loan companies can access your bank acct status via, Accurint, Lexus-Nexus, DP Bureau, etc.

    Finally, if they choose to make your life more miserable, they will place you in SCAN (Shared Check Authorization Network).

    You need to close your bank account ASAP. You can open another in the same bank if you prefer. Just make certain you are assigned a new bank acct number.

    Next, contact the payday loan company and make arrangements to pay them a small monthly fee until you pay back the principal.

    You do owe them the $$ so honor your agreement.

    If they take you to small claims, be happy. Just SHOW UP. There is nothing to fear. The "judge" may throw it out (they HATE payday loan companies) or they will get a judgment and you can make SMALL monthly payments.

    You cannot go to jail!

  • 1 decade ago

    You don't have much recourse; unfortunately when you initiate any withdrawal from the bank, check or debit or credit card, they are allowed to take whatever money you have in whatever account with that bank (its always in the fine print somewhere). Anytime you default, the full amount owed can be declared due and subtracted from your accounts. Default language is always in favor of the bank getting its money owed. I'd change banks, don't put anything into that bank or they will take it again, and the fines and interests will be more than the debt before you know it!

  • Anonymous
    4 years ago

    your economic employer might desire to have appropriate authorization for any debits out of your account . call your economic employer and question the transactions . The economic employer will check out and the two opposite them or clarify to you why the believe they're valid . The economic employer might desire to be very nervous with the help of this when you consider that is somewhat undesirable merchandising in case you're telling all your buddies what a foul economic employer it relatively is . it relatively is that somebody entered an incorrect account style however the economic employer might desire to have caught that with the help of the account call . it must be an identification theft subject , you will possibly be able to choose your banks help to get your credit document and verify on any new money owed on your call . i might permit your economic employer touch Capital One . they're extra in all probability to respond to an enquiry from the economic employer.

  • 1 decade ago

    By law they can do that. Check your agreement its written in there. The NSF charges might be disputed by you with your bank, but they are not bound by any policy to refund them.. Unfortunately that is the way it is. I wish you the best of luck in getting your finances back on track.

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  • Anonymous
    1 decade ago

    If the first check bounced, they have every right to attempt to take their money again. You still owe them.

    This is probably in the agreement you signed with them, and legal action should be the least of your worries.

  • 1 decade ago

    Dues could be taken validly on your account because these are chargeable when coordinated with your company even without your consent as long as it was proven that you failed your payments.

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