Banks need to respect their customers’ right to control their own account
Monday, October 30th, 2017
We are filing this lawsuit with the law firm of Kelly and Crandall to force BB&T and other banks and credit unions to follow a 40-year old federal law and to respect their customers’ right to control their own accounts.
Millions of consumers authorize companies to automatically deduct payments from their deposit accounts for recurring expenses such as subscriptions, memberships, a mortgage, credit card, or other monthly bills. To ensure that payments are timely, companies often seek out consumer permission for these preauthorized charges.
What if you decide to cancel your membership or service with the company, or you might decide to pay a different way? This can become a big problem if you are dealing with an unscrupulous company like an internet lender because the company may refuse to stop the automatic debits from your account. “Federal law provides certain protections for recurring automatic debit payments. You have the right to stop a company from taking automatic payments from your account, even if you previously allowed them.
So, you just contact your bank or credit union and tell them no more automatic debits to that company and they take care of it, right?
Too often, the answer is NO
The Virginia Poverty Law Center operates a free predatory loan hotline. We get hundreds of calls from people with internet loans. Every internet loan we have seen is illegal in Virginia and we tell callers how to stop the illegal lender from debiting their bank account (because every borrower has given the lender the authority to debit their account for payments). More times than we can count, the person calls us back and says the bank or credit union won’t or can’t stop the debits. They usually tell them must pay for a Stop Payment Order that likely won’t work. So the bank ends up helping the internet lender trap their own customer into an illegal loan.
The banks and credit unions are violating the Electronic Fund Transfers Act (EFTA) when they will not allow their customers to stop automatic payments from their account. And this is two years after the Consumer Financial Protection Bureau issued bulletins stating “Consumers also have the right to stop these charges at any time”.
Congress enacted the EFTA in 1978 and said this:
“The EFTA also “sets minimum safeguards for consumers who arrange for regular payments (such as insurance premiums or utility bills) to be deducted automatically from their bank accounts.” These safeguards protect the consumer’s control over his or her own account”
Gilliam v. BB&T is a class action lawsuit. When the EFTA was passed in 1978, the House Committee on Banking, Finance and Urban Affairs stated:
“The potential of class actions is symbolically as well as practically important to consumers and to industry. Both groups will assess the seriousness of Congressional purpose on whether class-action suits are provided for in this EFT legislation. Included, no one can doubt congressional intent that institutions provide EFT services only in a beneficial, responsible manner. Excluded, the opposite may be assumed.”
Let’s hope the bank doesn’t try to thwart the will of Congress by attempting to force us out of court and into a biased and secret arbitration system.