General Questions About Direct Payment
Getting Started With Direct Payment
Concerns About Direct Payment
General Questions About Direct PaymentWhat is Direct Payment?Direct Payment is the electronic transfer of funds from your checking or savings account to the company to which you authorize a payment. It is usually used for recurring bill payments. What types of companies and organizations offer Direct Payment?More and more companies now offer Direct Payment to manage recurring payments of all sizes, from mortgage, insurance, and automobile financing payments to monthly utilities, magazine subscriptions, and health club dues. How many people are using Direct Payment?The number of people enjoying the benefits of Direct Payment continues to rise. In 2007, the number of Direct Payments increased by 3.6 percent to 3.4 billion payments. Are there any other names for Direct Payment?Some companies may refer to Direct Payment as automatic bill payment, automatic debit, electronic bill payment, or direct debit. Do I need a computer or Internet access to use Direct Payment?No. You don't need a computer or Internet access to use Direct Payment. Once you set up Direct Payment, your bills are paid automatically - on time, every time. Whom should I notify to cancel Direct Payment?You will need to call the companies that send you bills and cancel each Direct Payment with them. How Does using Direct Payment help the environment?The average household receives approximately 19 bills and statements and makes approximately seven payments in paper form per month. By switching to electronic bills, statements, and payments, every year the average household would:
When it comes to the environment, small actions make a big difference. Getting Started With Direct PaymentHow do I sign up for Direct Payment?Signing up for Direct Payment is easy. You may have already received information about Direct Payment with your monthly bills. Contact the companies that send you bills and tell them that you want to sign up for Direct Payment or simply complete an authorization form. Most companies have the authorization information on their Web site, or you can request it by mail. How will I know the dollar amount that will be deducted from my account?The dollar amount can be fixed or variable. If the amount varies and you have not signed a variable amount authorization form, the billing company is required to send you a written notice of the dollar amount at least 10 days prior to the scheduled payment date. How will I know the date the payment will be deducted from my account?A scheduled payment date will be established when you sign up. If the payment is going to be deducted on a different date than the one you've scheduled, your billing company is required to send a written notice seven days prior to the scheduled date. If the date falls on a federal holiday, the money will be deducted on the next business day. Will I still get a monthly bill from the companies?Talk to the company directly. For most monthly bills, the answer is yes. Ask your billing company this question to be sure. Some companies do not send a monthly bill since one of the purposes of Direct Payment is to reduce paper. Those companies may send a yearly payment summary for your records. If the companies that send you bills send a paper copy, consider requesting an electronic copy instead. Simple steps - like paying your bills online and requesting an electronic bill over paper - could have a big environmental impact. Visit www.payitgreen.org to learn more. What if my payment date falls on a holiday?If your pay date falls on a holiday or other dates when your financial institution is closed, your payment will be debited from your account on the next business day. Will Direct Payment cost me money?No. One of the benefits of Direct Payment is that it will save you time and money in postage, checks and even late fees. Talk to the companies that send you bills. Concerns About Direct PaymentWhat if I have a problem?Problems with Direct Payment are rare. If you do encounter a problem, notify the company you paid. It can usually be corrected immediately. What if I don't have enough money in my account when the Direct Payment is posted to my account?You are obligated to have the money in your account for your Direct Payments in the same way that you must have funds in your account if you write a check. If you do not have enough money in your account, your bank and billing company may charge you extra fees. What if the wrong amount of money is taken from my account?Problems with Direct Payment are rare and generally easy to correct. If you do encounter this problem, notify the company you paid. Your account is protected against unauthorized payments under Federal law. What should I do if I think an unauthorized debit has been made to my account?You should monitor your account on a regular basis and if you think a payment has been made in error, contact the company that the payment was made to and your financial institution. Your financial institution will advise you of their procedures and the specific actions that will be taken to resolve the problem. In most cases, any error can be resolved quickly. Your account is protected from unauthorized debit transactions by the NACHA Operating Rules and Federal Regulation E - a strong set of consumer protections. What prevents a billing company from accessing my account whenever it wants to?Federal law (Federal Regulation E) protects you from unauthorized debits from your checking or savings account. With Direct Payment, you have the right to stop or reverse a payment you believe you did not authorize, or was made in error. With Direct Payment, won't more people have access to my personal account information?No. Once you authorize the companies that send you bills to use Direct Payment, the information that you provide simply becomes part of the transfer information read by computers. No one needs to know or refer to that information. |
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