Sticking it to THE MAN

February 13, 2006 9:31 AM

LegalFilter: What are my legal options against a company that withdrew money from my checking account without my consent?

* Earlier this month my cell phone service provider withdrew almost $700 from my bank account for seemingly no reason. This mysterious charge was in addition to that same month's regular fee. I called the company numerous times and they have no record of that transactions ever taking place. I've also been in contact with my bank and filed the appropriate paper work claiming a discrepancy.

I'm 95% sure it is my cell phone service provider's fault since the information listed for the with withdrawl (name of company, contact info.) is the same info. given every time a normal monthly fee is withdrawn for my normal cell phone bill. My question is, what are my legal options if neither institution claims responsibility? If it is my cell phone service provider, am I entitled to ask for a reduction in my current service plan (I wish I could switch to a cheaper plan with fewer minutes without adding 12 months to my contract)? Since this deduction came right before rent was due, I've had to sustain penalties both from housing costs and other bills and I just feel that I'm entitled to a little more than just a reimbursement.

posted by Smarson to law & government (16 comments total)

What makes you think AskMetafilter is going to be a better source of information on this than a lawyer? I'm not trying to be rude; I'm serious.

I've had some experience fighting corporate behemoths (in fact, I relish in it), but I always contact my lawyer before I undertake the fight. He's happy to provide me proper tacticts. He's happy to tell me if what I'm doing is impossible, or if the thing I'm complaining about is actually my fault. But the thing is, it's the lawyer who knows the rules.

You might get some vague advice here, but seriously, the best thing you can do is to contact a lawyer!
posted by jdroth at 9:41 AM on February 13, 2006

Get in touch with a lawyer, and perhaps talk to people at your local chapter of the Better Business Bureau (assuming you're in the United States or Canada; you can find your local chapter here).
posted by itchie at 1:16 PM on February 13, 2006

The problem with lawyers, of course, is that they charge around $125 per hour and up, so pretty quickly this would cost you more than it's worth. Find a starving lawyer and contract to have him/her do a severely threatening letter for $50. Do contact BBB also. If you live in a relatively small city, you may be able to get your local newspaper to write a story about this. If so, the money would probably be back in your account in a jiffy. Finally, you can take them to small claims court. It's pretty user friendly, sitting there waiting for your case to come up is fine entertainment, and the best part is that if they don't show up, you win by default, and if they don't pay up, you can have them arrested. You might name the bank as a co-defendant. But before you do anything, make absolutely sure you're right and they're wrong. "Seemingly" makes me think you haven't asked all the right questions yet.
posted by beagle at 1:25 PM on February 13, 2006

The problem with contacting a lawyer, of course, is that you have to pay for one. For a $700 problem, that could well not be worth it.

Your bank should help you with reversing the withdrawal. If they can't or won't, you should consider contacting the police, since this is a case of fraud and/or theft.

It might be helpful to post the name of the cell phone service provider here; others might be able to tell you if this is common with that carrier, assuming it's not a major carrier like Verizon.

And no, this billing error gives you absolutely no rights to change your service plan. It's possible that if the company admits to the error, they might agree to let you cancel your contract; it's also possible that they might agree to some sort of plan change as compensation.

As to service fees and actual dollars-out-of-pocket due to the billing error, you're legally probably entitled to compensation (but I'm not a lawyer). This again is something that you should be asking the cell phone provider to pay. You should ask for a specific amount - late fees for rent of $X, bounced check charges of $Y, etc.. You almost certainly won't get anything for your pain and suffering, or lost time.

I'll let others mention alternative avenues for complaining and getting a response, and the small claims option.
posted by WestCoaster at 1:31 PM on February 13, 2006

The cell phone company may say that they have no record of the transaction, but the bank most definitely does. Talk to your bank's customer service, explain the situation (an unauthorized withdrawl), and get all of the information about the transaction -name, date/time, routing number, etc.

I've had to get this kind of information before when a credit card company claimed my electronic payment was late, when in fact my payment was received well before their deadline, and they just sat on the payment for three days. The transaction record proved it.

Present the transaction info to the cell phone company, and if they still don't refund your money, take them to small claims court.
posted by Gamblor at 1:39 PM on February 13, 2006

All good advice thank you. As of today, my bank credited my account with the withdrawn money after I finally got through to a higher up. Yeah for banks. So I'm only out the penalties from paying rent late and being tardy on other bills (all of this amounts to less than $50, so I'm inclinded to it drop). However, I'm still planning on contacting my cell phone service provider (T-Mobile) and see if I can't get my service plan changed. Chances are slim, but now that I've got that money back....I really don't have anythig to loose my asking.
posted by Smarson at 1:52 PM on February 13, 2006

Also, once, the phone company (Ameritech) added $4,000 to my bill under the vague title of 'miscellaneous charges'. When I called to get the problem fixed, they admitted that there had been a billing error, and that this had happend to hundreds of other people, with varying amounts tacked onto their respective bills.

You might want to do some searching online and find out if this company did the same thing to other people, as well.
posted by Gamblor at 1:59 PM on February 13, 2006

Your state has banking regulators, bureaucrats whose job it is to assist you. Put them to work if needed.
posted by theora55 at 2:23 PM on February 13, 2006

Incidentally, this is why I only let a very select few companies charge my debit card directly (the rest are handled by my bank's online billpay). And those few are soon to be offloaded to a credit card that offers rewards.
posted by CrayDrygu at 2:41 PM on February 13, 2006

You've probably filed a Reg E dispute with your bank, which is what you should have done. It's also called an EFT dispute. Please, please, please determine what kind of credit you've gotten. It is probably provisional credit, which means that they've taken you at your word and the money's back in your account. However, if at the end of their investigation they determine that TMobile did not wrongfully withdraw the $700.00, then they will tell you two to three business days in advance that they are going to withdraw the money. They are able to do this; it's the way the Regulation is written. You need to know if the money is really yours, or if they're just "loaning" it to you for the interim.

Now, with TMobile, there are a number of possibilities here. One, someone may have used your bank account to pay their bill; Two, someone used a bad account number that is close enough to your account number that the system called it even and charged you (seen this happen w/ a BoA account and some forged checks); Three, TMobile just screwed up totally. The chance that the bank is at fault is really pretty slim. The bank gets the files that are sent through by merchants, and those files are run. Unless this particular transaction actually required human intervention (not too likely) then it just processed like everything else that day. It's possible that a technical error caused your account to be charged rather than someone else's, but I've frankly never seen an ACH that was meant for a different account post to the wrong account unless the originally entered information was wrong (like TMobile's person entered the account number incorrectly, or they were given your account number fraudulently, or someone gave them a fraudulent account number that is very very close to your account number).

Typically with ACHs, banks and merchants are able to sort it out between themselves because they've got the records regarding what occured. At the end of this investigation, you can request all of the documents that were used to decision your case, and if you lose, you certainly should request those documents. Also, if the bank tells you that TMobile is the one at fault, then TMobile should reimburse you for whatever fees you have rec'd b/c of their problem (this is true of whatever party did the withdrawal) and if need be, they need to correspond with your landlord and others on your behalf to clear this up.

Good luck. If you need any help with the Reg E dispute, let me know. I work in banking -- these things are really not uncommon.
posted by Medieval Maven at 2:44 PM on February 13, 2006

Since you got your money back, a good "weapon" in dealing with TMobile is first threatening to file a complaint with the state Attorney General and BBB, and if that doesn't help grease the wheels in a direction favorable to you, then follow through on your threat. Even if you were out just $50, this shouldn't have happened in the first place.
posted by jerseygirl at 3:57 PM on February 13, 2006

This is a good illustration of why it is never a good idea to give somebody else the right to take money from your account. Pay them yourself, rather than let them take the money. This is an issue with direct deposit as well; if they in their discretion determine that you have been overpaid they can just take the overpayment out of your account. If you get fired or leave a job on less than amicable terms, zero out the account right away. You may still owe money, but I would rather have them asking me for it than the other way around if there is a dispute.

Here, you need to the bank to put forward some proof of a withdrawal or put back the funds. Be nice, it is just a screw-up somewhere and you want these people to help you, not fight you. At the same time seek documentation from the phone company that they claim no withdrawal. If you do not get satisfaction within a few weeks start copying the state regulatory authorities for the bank and the phone company on your correspondence. You might also contact the court or a lawyer to find out the statute of limitations for bringing a suit to recover the funds if all else fails.
posted by caddis at 4:23 PM on February 13, 2006

This is great!! Thanks for all your help. And people questioned by $5 donation to the meta-verse!! Hahaha, silly non-believers. :)
posted by Smarson at 5:42 PM on February 13, 2006

Upon reading your account of the events, my first thought was that the company didn't decide to grab your 700 dollars. Rather, I suspect, someone who works for the company and has access to your bank account info has a drug problem and needed the 700 bucks for product. I mean, I don't doubt for two seconds that cell phone companies engage in all manner of shenanigans, but this particular rip-off sounds like it was committed by someone who's desperate. Or, possibly, by someone who has reason to think they won't get caught.

In any event, the point here is that the cell company may honestly believe that it didn't take your money. They may not realize that they have a thief somewhere in the woodpile. If you suggest to them that they do... well, I can imagine two scenarios. The first is good for you: the company is highly pissed off that someone would do something like this and quickly tracks the thief down. They put his head on a pike and parade it through the customer service department. The second is not so good for you: Concerned about lawsuits and/or more people coming forward with similar claims, they deny that there's a problem, bury their heads in the sand, and stonewall you.
posted by Clay201 at 6:48 PM on February 13, 2006

You're in error that you didn't give consent, by the way. When you give anyone access to your account - including your employer for Direct Deposit - the terms of authorization give them free rein to accomplish any transaction on your behalf for any reason. Sometimes there is gobbledygook about performing "only authorized transactions;" invariably the authorization is determined by the party to whom you're giving account access.

My advice: don't let anyone at your bank account. I've seen enough of these fraudulent $500-$800 overcharges in the last couple of years to recognize a systematic pattern; these companies know that many folks won't notice and of those who do, most will be too busy to care or to jump through the necessary hoops to get their money back.

So don't let anyone at your bank account. Go close your account today and open a new one at the same bank, with a new account number and no authorizations for anyone but yourself. When asked why, tell them "I changed my mind about allowing various entities access to my account." The banker will nod knowingly, like it was the tenth time they've heard it this week.
posted by ikkyu2 at 9:12 PM on February 13, 2006

Incidentally, caddis is dead right. I somehow annoyed someone at my former employer and it resulted in a $13000+ withdrawal from my account one day, no notice, on a Sunday. I found out when I decided to go get some food in the hospital while I was on call, went to the ATM and discovered there was no money.

It took me 6 months to get the money back, no admission of error on their part, no apology. And I was working 100 hour weeks for these fuckers people at the time.

Not to name any names, by the way, but may the accounting and clerical staff of Columbia-Presbyterian Medical Center rot in the depths of Hell with their backs broken for all time.
posted by ikkyu2 at 9:17 PM on February 13, 2006