NSF and automatic debits

There is a law regarding compulsory electonic withdrawals. Even though the insurance company may have rules that require it, it is against Federal Law to require it. He can pay them another way if he requests it although he may get a hard time. I once told a life insurance company no deal because they required it. You should see how quick they were willing to make "special arrangements." I still told them where to go however.

I will have to ask him if they said it was a requirement.I really don't know why he would take such a thing as an option. I do beleive they take cheks by mail or credit cards...Oh Boy! What i don't get is they keep debiting his account every few days or every week and cause a 35 dollar over draw fee o his account and I think they even add on a fee casue they did not get their money. Thats a racket to me. he can't pay his bill for all the fees running him short them.

Well, he got new insurance and they say thay have to do the debit thing. Now to stop the old insurance from automatically debiting his account.

The new company should be contacting the old company to cancel his old policy which in turn will cancel the ACH's to his account. They only way they should try to debit his account is if he still owes on some past premiums. But also if your son knows the insurance is going to be taken out on a specific date then why does he not have that money in there. Could he take a little out of each paycheck and set aside for the insurance. Or even maybe give it to you so he doesn't spend it. Because it is not the ins. fault that he gets the NSF fees, he gets the NSF fees for not having the money in there. Another way to avoid the fees is if he knows he will not have the money in there, then call the company and tell them. Also can he get overdraft protection on his checking account, that will save him the hundreds of dollars in NSF fees.

Another thought....have him set up a seperate checking account for his insurance money. If he gets direct deposit from his work, have them put a specified amount from each paycheck into this insurance account, and the rest into his regular account. That way it's out of sight for him, and he doesn't have to think about putting the money aside himself. I do that for my regular bills, and have our regular checking account be for spending money. That way, we don't spend our rent and bill money on things like movies or groceries.

I agree with Swedishgirl but personally I never do that automatic stuff...it just seems to risky in some ways to me if something comes up and you are short on funds... it is coming out regardless.

WellI know he is 21 and doesn't know about all that stuff and neither do I. I know that he always doesn't have any to put in there for his insurance after making his truck payment.I wish they would accept a different way of payent. What is overdraft protection?I never heard of that

Usually you have to have credit to get overdraft protection and all that does is put people even more into a hole. Most banks can actually place stop payments on ACH debits. You just have to call them and ask and it will usually cost you a initial fee but I think it will save you tons in the long run by the sounds of it! :D

Overdraft protection is where you fill out some papers at the bank, and when you do not have enough money in the bank they will pay the check and not charge the NSF fees. He needs to go ask the bank about the program they have. Our credit union has what they call a kwik cash overdraft protection. We have available a certain amount of money and when we need it we can transfer the money from that account to our checking account,or if we happen to overdraw our checking account they will take money from that kwik cash account and put it in our checking account and not get charged any fees. Then we can pay that back in monthly payments.

Sounds like a good deal to me.I don't know if my bank has anyhting like that.Probly not just a local bank here in our hick town...But my son'e my have and probly can't get it as he has paid numerous NSf fees the last 2 months.

I forgot to sign in again. That was me above.

Well I live in a little hick town also :lol: It was from a local credit union. And yes I had a few NSF's and thats why I asked about it. Just have him call the bank and ask if they have overdraft protection. For us we had to fill out an application and it had to be approved like a loan, so we were approved for a specific amount. I am sure that in time we could ask them to increase that amount (because that is much cheaper than a payday loan) But we won't, a least not at this time. But if he calls they will tell him about their overdraft protection plan, sometimes you may have to pay a monthly fee for it,depending on the bank. But I really like what our credit union offers.

Thanks ,I will be sure to tell him about this. As many as he has had he could have put that towards that cost of overdraft protection.really though,thats a new one to me never heard of that before.

Also... What company is his truck insurance with? Not all companies insist on automatic debits. I'm with Progressive. They offer auto-payments, but it's an option, not a requirement.

he should pay by check or money order I think ..in my state insurance cos. send you a letter of cancellation after you fail to make payment on time..giving you almost two weeks more by time you receive default letter of cancellation if you don't send some sort of payment( and mail payment to redeem yourself if you are behind)..they don't want you to stop policy and find another company who will offer you same thing...and if you look further after cancellation find possibly even less payments...don't do automatic drafts from bank account...deductions on insurance payments...one you should send in I think if you are strapped for money

I also have dealt with Progressive and even the ins. company I use now doesn't require ACH. Unclewulf makes a great point! It also might be time to shop for a new insurance company. :D

I actually had progressive for years and then switched to a new company that will also include my home owners in it and discount it ( multiple policy discount ) and I saved a ton of money on BOTH.