which payment method has less risk of failure after a hurricane?

March 29, 2006 9:04 AM

My mom is concerned that a hurricane could damage enough infrastucture to cause problems if she's making payments electronically.

My mom asked me whether she should use online or paper payments for her mortgage. If a hurricane does enough damage to destroy online payment information, I doubt paper would survive. And wouldn't a company have redundant offsite backups? Unless it's run by idiots?

I think my mom has imagined a greater risk than actually exists. Or maybe I'm unrealistically optimistic. What should she consider a reasonable risk? I'm not actually sure what she considers the "damage" to be. Loss of information that she has made payments? Loss of ability to make payments after a hurricane?

posted by bleary to work & money (10 comments total)

I am 100% sure that her mortgage company keeps backups.
posted by k8t at 9:12 AM on March 29, 2006

OFFSITE.
posted by k8t at 9:13 AM on March 29, 2006

you're 100% in the right.... this coming from a Floridian who went through the eye of Frances. Banks will have redudancy and second, a vast majority of hurricanes have very isolated high-damage zones. They loose their punch beating against the shoreline homes and trees. Wind speeds can go down as much as 10-20 mph for every mile inland they go.
posted by trinarian at 9:17 AM on March 29, 2006

The transaction records will be stored electronically whatever she does. The transaction itself will probably be done electronically, even if she initiates it with paper (writing a cheque or whatever). I can't see a scenario where doing it on paper will protect her from anything.
posted by cillit bang at 9:23 AM on March 29, 2006

I'm sure banks have figured out a way to make sure they keep your money. Besides, you can tell her that the Internet was specifically designed to facilitate the transfer of information in case of disasters like hurricanes and nuclear war.
posted by frogan at 9:35 AM on March 29, 2006

If she really wants to put her mind to rest, she could print out a hard copy of the details of the EFT each month and keep them in a file folder. In the event of so catastrophic event as she fears, those printouts would be very solid backup, probably as solid as photocopies of canceled checks.
posted by La Cieca at 9:36 AM on March 29, 2006

Oh, and you might point out to her that there is a much higher probablility of her paper checks getting lost in the mail than there is of a major hurricane knocking out the internet.
posted by La Cieca at 9:38 AM on March 29, 2006

Don't most banks just do an EFT using the account and routing numbers from the check and then destroy the physical check? I'd imagine any modern efficient enterprise such as a bank making data on paper digital, either by scanning or data entry, and then destroying the paper version as soon as possible.
posted by zsazsa at 10:03 AM on March 29, 2006

Locally, I recall seeing instances where Katrina evacuees were unable to access their NOLA-based banks at ATMs and debit terminals when they first arrived here in Galveston in the days after the storm. In cases like that, the evacuees had to use cash, credit cards, or a checkbook.

Having said that, my enormous national bank's operations center is located far, far inland, and they also automatically deduct the mortgage payment from my checking account. When we evacuated for Rita, this sort of thing was never something I worried about. I had my laptop, and I used the bank's online banking web site just like I always did.

About paper checks getting lost in the mail: the postal deliveries in the areas most affected by Katrina and Rita were disrupted for months; in some cases, they still are.

BTW, I don't know how well it was publicized outside the local area, but during the Rita evacuation it wasn't just the gas stations that ran dry. The ATMs were empty, too, and weren't refilled for days. That didn't stop debit card purchases, although there wasn't much to buy at the supermarket when we came home.
posted by Robert Angelo at 10:51 AM on March 29, 2006

She says, "thanks" for the help.

She decided to go with paper because she found out the bank charges a fee for setting up automatic payments.
posted by bleary at 5:52 PM on March 29, 2006