Ask Jill: Did Electronic Banking Backfire?

I love electronic banking, but was surprised when recently, a deposit was suddenly reversed from my account. I called the bank and I learned that when you enroll in certain electronic banking features like direct deposit, you also sign away a bunch of control.

The following comment/rant about this electronic banking snafu came in:

Hi Jill,

404 listener here with a bit of a gripe. I'll try to sum it up well. I send my dad a check every month for my car payment. Same thing every month, I use the bill pay feature of BoA.com set the delivery date for sometime in the beginning of the month. He get it and mails it off to his bank and it's generally cashed around the 14th. This is perfect as with my first paycheck of the month (always before the 14th) I get the cash to pay him.

This month however, BoA decided to send my dad what they call a "corporate check" which means on the delivery date (5/3) they deduct the money from my checking account and simultaneously my dad receives my check. Normally I am told my check goes as a "laser draft check" which acts like a normal check.

I called and asked why this month it was different. The best answer they could give me is that their "system" decides what type of check to send. I asked how does it decide? He said Blah Blah Blah System Math Science Blah Blah Blah. Eventually I got him to admit that essentially it decides randomly.

So, in summary, BoA randomly decides when it wants to deduct my money from my account and there is no way for me to specify one or the other or apparently any way for them to either.

The best defense they had was to say "well on your specified delivery date you should have the funds available". Which, is very true. But come on, nothing in their "system" should be random! Random and my money don't mix.

Well, sorry for the long message, just had to gripe. Maybe we can write a nice little article and get a nice little payout from BoA.

Love,

Jon

OK, so I called B of A and got pretty much the same answer. So what are Jon's options? He could go back to the old-fashioned check writing (ugh!); he could move his accounts to another large bank, but i suspect that the practice is industry-wide; he could try a credit union, but that might not be convenient for him; or he could use an investment account as his checking account. My fear is that this problem could be an unintended consequence of the entire electronic banking system. Jon probably isn't going to love me anymore after this response, but he was kind of enough to send me this great quote about banks:

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

-Thomas Jefferson

Jill Schlesinger

Jill Schlesinger, CFP® is the Emmy-nominated business analyst for CBS News. She covers the economy, markets, investing and anything else with a dollar sign on TV, radio (including her nationally syndicated radio show), the web and her blog, "Jill on Money." Prior to her second career at CBS, Jill spent 14 years as the co-owner and chief investment officer for an independent investment advisory firm. She began her career as a self-employed options trader on the Commodities Exchange of New York, following her graduation from Brown University.

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