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Let me clarify that earlier post.


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OK. Let me clarify that earlier post.

1. I "bounced" a check.

2. The bank charged an NSF. I have no qualms about that. It was my fault, not theirs.

3. I was in the process of setting up payments with the merchant.

4. I got a collection agency notice, but I did not send any payments to them as I perferred to deal directly with the merchant.

5. Without my permission nor knowledge, the collection agency sent 2 drafts through my bank account. One draft was for the amount of the original check. The other draft was for the additional charges.

6. Because I did not give them permission (and had not been notified by them), I did not know to have that amount in my account. (I also had never authorized the bank to allow this agency to draft on my account.)

7. These two drafts caused two additional NSF charges on my bank account.

8. The only conclusion I can reach is that, when the collection agency got a copy of the bounced check, they used the numbers at the bottom of my check. I *never* gave them my account number nor permission to draft on my account.

What I want to know is:

1. Does this collection agency have the right to draft on my account without my permission (much less without notifying me first)? -and-

2. Since I had not given the bank permission to allow this agency to draft on my account, did the bank have the right to charge me those 2 NSF charges?

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<blockquote>OK. Let me clarify that earlier post.

What I want to know is:

1. Does this collection agency have the right to draft on my account without my permission (much less without notifying me first)? -and-

</blockquote>

No, if they are not a branch of the bank. (Some banks do have collection agencies. If the collection agency is part of the bank, then it is the same as the bank charging your account.) However, I find it surprising that they wouldn't have just debited your account if it was the bank.

If they are not part of the bank they have violated all kinds of codes, starting with:

1) They can't seize money or property without a court order

2) They didn't get your authorization to debit your account.

<blockquote>

2. Since I had not given the bank permission to allow this agency to draft on my account, did the bank have the right to charge me those 2 NSF charges?

</blockquote>

If you go back and prove that this company fraudulently pulled money from your account, you may be able to get the courts to tell the banks to reverse this. It sounds as if you may be going to court anyways. However, the bank may not have known that you did not authorize this transaction, so they are just following normal business procedures.

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  • 10 months later...

You need to be careful because in Indiana I know they print disclaimers on their check cashing policies that by writing a check to XXX company you also agree that any NSF charges may be drafted from your account PLUS NSF fees.

Make sure that isnt the case where you are.. Its totally and perfectly legal in Indiana.

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You can also go to your bank and tell them about it. On electronic debits, you have up to 60 days to stop payment. As we did, we used "unauthorized" as the reason, which was true. The bank returned the charges as it was not our fault for the overdraft. It is worth a try. You can also, at some banks, tell them to never accept electronic debits. This may also work for phone checks, so give it a try. You have nothing to lose.

[Edit by retmar on Friday, March 21, 2003 @ 02:48 PM]

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