Long time PF lurker. Wanted to share a story that I learned a lesson from. This happened about a month ago.
My wife and I were talking about something financial related and she said that she got an email saying that the automatic payment on her auto loan was scheduled to go out of our bank that day. This was strange because our payment was supposed to go out a few days later. I asked her to show me the email, and it was an automated email from Regions Bank. My wife had a Regions account (from before we were married), but it was closed a year ago and we use a different bank now. At first I was about to dismiss this email as spam, and move on with life. But after some investigation it appeared to be a legitimate email from Regions and the scheduled payment listed had the correct information about her auto loan.
We first logged into her auto loan account to see if anything had posted and sure enough there was a $130 payment (as the email had said) on her account. We called the auto loan bank and asked about the transaction as we did not think we initiated it and wanted to make sure it was legitimate. They told us that the payment came in as an online bill pay from Regions Bank in my wife’s (maiden) name and that the funds had posted.
Next we called Regions to figure out what was going on as my wife has no account there anymore. It took a little while to find someone that understood the situation, but we eventually found out that Regions uses a 3rd party company called FiServ that runs the online bill pay system and that most large banks use FiServ or a similar company for bill pay. Apparently, when my wife still had a Regions account she had at one point paid her auto loan using bill pay (she normally wrote checks, and didn’t remember offhand using bill pay). When she closed her account at Regions, her account at FiServ was still active (The rep told me this was normal procedure?) and none of her scheduled payments were canceled. She only had the one automatic payment through bill pay and for some reason or another the next payment was scheduled to come out on June 1, 2017 (the day this all happened). This is why we didn’t get emails about this sooner.
At this point, everything was making more sense except for why the $130 payment actually posted onto her auto loan account since it should have been trying to withdraw funds from non-existent account. Well, FiServ actually pays bills for you and then tries to withdraw the money from your account. If it returns NSF, then they just notify you that you owe them the money. The rep told me that this information is conveniently located in the fine print when my wife agreed to use online bill pay with Regions. At this point, we could have just paid FiServ the $130 since they made a valid payment to our auto loan, but we instead contacted the auto loan bank and had them reverse the payment and send us a check for the $130. We then used this money to pay FiServ.
The lesson that I learned through this is to always cancel any automatic/scheduled payments before you close a bank account, and that many banks use a 3rd party for bill pay services. Oh, and reading the fine print never hurts =)
EDIT: tl;dr Many banks use a 3rd party company for online bill pay. My wife closed her bank account, but the online bill pay account was still active and paid a bill on her behalf a year later.
Submitted July 12, 2017 at 12:31PM by bobocalender http://ift.tt/2u9EpMO
