Anonymous
08-14-2004, 09:25 PM
Mar. 30--Banks say that paying bills online is quicker, easier and more efficient than the old-fashioned way of writing checks and dropping them in the mail, but recently some Bank One Corp. customers have found the Internet method to be an expensive practice.
Chicago-based Bank One this month revised its online bill-paying policies. In many cases, that has resulted in money being taken out of customers' accounts several days sooner than in the past.
Some customers said they weren't aware a problem existed until after they were hit with overdraft fees because they allowed their balances to fall too low to cover their checks.
The new policy is taking the "float" -- the time between when a payment is made and when the person being paid actually collects the money -- from customers and giving it to the bank, some Bank One customers complain.
"They're taking the money out of my account days before the payee is actually getting any money. That's my gripe," said John Montgomery, 37, who became a customer at Bank One predecessor First Chicago a dozen years ago.
He is looking for a new bank for himself and his small business, angry at what he calls the bank's "continual nickel and diming of customers."
Customers were notified by e-mail that the changes were coming, said Bank One spokesman Tom Kelly.
When customers use a computer to pay bills to a company using electronic-fund transfers, the movement of cash is instantaneous, and no check is ever written.
The problem some customers have run in to is with electronic payments that involve the bank writing a check. In instances where the business being paid doesn't accept electronic-fund payments, Bank One writes a check that is mailed, Kelly said.
For electronic payments, the money generally has to be in the Bank One customer's account two days before that payment is due, he said. In cases where the bank has to write a check, the money has to be in the account five days before.
Bank One deducts the money from the customer's account, even though it is several days before the person being paid receives the cash.
Most checking accounts don't pay interest, so customers aren't losing any potential interest income by the money being withdrawn before the check clears, Kelly said.
Kelly said Bank One's new policy is similar to those other large banks have in place. That list includes Bank of America and LaSalle Bank.
Electronic payments make it easier for many customers to manage their money, and most realize that they shouldn't count on there being a number of days between when a check is written and when the money is taken from their account, said Betty Riess, Bank of America spokeswoman.
"When you think about it, when you write a check, you're supposed to have the money in your account," she said.
Bank One declined to release information on how many customers pay bills online, calling the information proprietary. But industry analysts say it is one of the fastest-growing segments of the banking business and estimate it will grow by 80 percent over the next five years.
But Montgomery won't be among the users -- for now.
Until he finds a new bank, Montgomery said he would go back to doing some of his banking the old-fashioned way.
"Just out of principle," he said. "I'll be writing checks."
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To see more of the Chicago Tribune, or to subscribe to the newspaper, go to http://www.chicago.tribune.com/
Chicago-based Bank One this month revised its online bill-paying policies. In many cases, that has resulted in money being taken out of customers' accounts several days sooner than in the past.
Some customers said they weren't aware a problem existed until after they were hit with overdraft fees because they allowed their balances to fall too low to cover their checks.
The new policy is taking the "float" -- the time between when a payment is made and when the person being paid actually collects the money -- from customers and giving it to the bank, some Bank One customers complain.
"They're taking the money out of my account days before the payee is actually getting any money. That's my gripe," said John Montgomery, 37, who became a customer at Bank One predecessor First Chicago a dozen years ago.
He is looking for a new bank for himself and his small business, angry at what he calls the bank's "continual nickel and diming of customers."
Customers were notified by e-mail that the changes were coming, said Bank One spokesman Tom Kelly.
When customers use a computer to pay bills to a company using electronic-fund transfers, the movement of cash is instantaneous, and no check is ever written.
The problem some customers have run in to is with electronic payments that involve the bank writing a check. In instances where the business being paid doesn't accept electronic-fund payments, Bank One writes a check that is mailed, Kelly said.
For electronic payments, the money generally has to be in the Bank One customer's account two days before that payment is due, he said. In cases where the bank has to write a check, the money has to be in the account five days before.
Bank One deducts the money from the customer's account, even though it is several days before the person being paid receives the cash.
Most checking accounts don't pay interest, so customers aren't losing any potential interest income by the money being withdrawn before the check clears, Kelly said.
Kelly said Bank One's new policy is similar to those other large banks have in place. That list includes Bank of America and LaSalle Bank.
Electronic payments make it easier for many customers to manage their money, and most realize that they shouldn't count on there being a number of days between when a check is written and when the money is taken from their account, said Betty Riess, Bank of America spokeswoman.
"When you think about it, when you write a check, you're supposed to have the money in your account," she said.
Bank One declined to release information on how many customers pay bills online, calling the information proprietary. But industry analysts say it is one of the fastest-growing segments of the banking business and estimate it will grow by 80 percent over the next five years.
But Montgomery won't be among the users -- for now.
Until he finds a new bank, Montgomery said he would go back to doing some of his banking the old-fashioned way.
"Just out of principle," he said. "I'll be writing checks."
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To see more of the Chicago Tribune, or to subscribe to the newspaper, go to http://www.chicago.tribune.com/