We’re relatively new to using online bill pay. For years we felt more comfortable with sending out a check than entering a few pieces of info online and throwing our money out at the speed of light. But about this time last year, we decided to sign up instead of spending an increasing amount on stamps.
We thought everything was going great, but then I was woken up Saturday morning at 8am with a scary phone call.
“This is your credit card company. You are currently ten days past due. To arrange for payment over the phone, press 1. To speak to a representative, press 2.”
I quickly sobered out of my half-asleep and groggy state, pressed “2″ and ran down to our computer to figure out what went wrong.
While waiting on hold, I opened Quicken and started searching. Sure enough, we recorded the full payment to our credit card seven days before it was due. Something had to be wrong. The automated voice contradicted what I saw in front of me.
Out of increasingly morbid curiosity, I checked the online register on our bank’s website. My heart sunk when I saw the truth staring back at me: We did make the nearly $900 payment, but not to the credit card company. By mistake we entered the amount one row above the credit card and sent all our money to our cable company.
Once the phone representative came online, I quickly explained the situation to him and set up an immediate payment from my “backup” checking account. (All the more reason to have an emergency fund, folks!) And he agreed that this was an uncommon situation and that he would do what he could to remove the late fee and help keep this off my credit report.
Now that that disaster has been averted, I need to prepare myself for the inevitable fight with my cable company to get my money back. With my long and conflict-ridden history with my local cable company, I’ll be lucky to see my money within a month. Hopefully it doesn’t take that long since my emergency fund is nearly tapped out.
The lesson here is to be exceedingly careful when using your bank’s online bill pay option. One quick, careless typo can cost you thousands of dollars and even impact your credit. For now I think we’ll still use bill pay, but I know we’re going to be more careful in the future!
Photo by: catd_mitchell
{ 5 comments… read them below or add one }
Wow.. i still prefer using the old mailing in the check method cause i don’t like anyone having access to my checking account – or relying on someone else to pay the bill. That can lead to mistakes like this. Good luck getting the money back!
You make a great point — online bill pay may not be the best idea. When paying bills online, it’s often easier to sign up for the service’s auto-pay function.
That way, the company will always take out their money (like they would ever forget) and you don’t have to worry about late fees or mistakenly paying the wrong person!
I love, love, love my online bill pay. I’ve been using it for years. Mine will even kick out checks to non-companies. For example, last year I was living in an apartment in a converted house. The landlords lived a couple of blocks over. I set up my bill pay to send my rent to their home and it worked out beautifully – it was always on time and didn’t cost me a dime – not even a stamp. I set up regular payments that don’t change a year in advance (mortgage, car payment, etc) and they just kick out each month. For payments that fluctuate, like my electric bill, I do it when the bill comes in. Sorry you had problems with yours, honestly, mine has been a boon to both my peace of mind and my credit score!
I don’t like auto-debit for the simple fact that I don’t want these companies to have access to my account. The biggest recent story I can think of was around the turn of last year when Dreamhost’s billing software accidentally overbilled a great amount of their customers and caused overdrafts by the hundreds. The last thing I need is some careless company somewhere stealing my money. I’d rather give it away by accident than give someone else access.
I don’t use the bill pay features at all with any of my bills. I have them sent to my credit card (gives cash back and I don’t carry a balance) and I ‘push’ the payments to the credit card for the amount of the bills.
I use ING so they mail out a check to the company and I don’t pay for stamps. This is easier for me since I have all bills paid on one credit card and I just make payments to that one card.
Once I get a bill set up I don’t even have to check it……I still do, because I like to make sure…but I have never HAD to.
Glad you got that straightened out though…and good thing you have the emergency fund.