Direct Deposit Payroll - BEWARE!!!!!!

[Freedom_from_Chains]

For those who have their paycheck direct deposited you might want to be aware of a provision in the ACH (Automated Clearing House) rules. I'm not exactly sure as to when these were enacted, as I have not fully researched them yet, but I am sure it has been since the corporate fascist's have come to power. It is part of the 21st Century Check Act that is now in place.

Anyway, my wife recently had a dispute with her company over her last paycheck which had been deposited into our checking account. I don't want to go into great detail about it because it has turned into a big mess that is now being handled by the attorneys. However, in short the company claimed that she owed them money for a past paycheck, which they claimed she was not entitled to. She disagreed with the company so that night, without any warning they did what is called a reversal of her paycheck and simply took all of the funds back out leaving us with a negative $990.00 balance in the account.

When I looked into it, under the ACH rules a company has up to 60 days from the time they put a paycheck into your account to do a reversal and take it out. I was able to force them to put the money back by having my attorney contact them, but since then the situation has seriously deteriorated and looks like it is headed for litigation.

So in short, if you have your paycheck direct deposited you might want to rethink that method, particularly if you are not always on the best of terms with your company, and go back to the old paper check each pay-period

[mike_c]

1. more ways to flog the wage slaves....

Pigs.

[H5N1]

2. Good to know that

Hope you beat the bastards

[Catherine Vincent]

3. Really?

Something similar happened to an employee at my company that owed money after she terminated. I believe they sent her letters for her to pay back the money that is owed the company. They didn't do a reversal like with your wife. Was this a large corporation?

[Freedom_from_Chains]

5. Fortune 500

[lvx35]

4. Last time I signed on for direct deposit

There was a checkbox that asked "may we take money out of your account if there is a mistake?" Which I left unchecked. That was in WA state, so it might have been a state legal thing...But what you describe is screwed.

[alarimer]

6. I am REQUIRED to have direct deposit

I haven't had a problem so far. I also get a paycheck stub every month that shows what was deducted and deposited, etc. so at least I can compare it with the bank statement. I have kept all of them. It would help in any dispute.

[Freedom_from_Chains]

9. And I think that is why so many companies have made

direct deposit mandatory.

[starroute]

19. No, they've made it mandatory because it's a lot more foolproof

I used to do payroll for a company where we offered employees a choice between direct deposit and paper checks. We didn't have one central location where checks could be handed out, so we always sent the checks out in the mail.

We would mail them out about five days ahead of time, to allow for delays in the delivery. Even though we asked everyone not to deposit them before the date -- and even though banks are not supposed to accept checks before when they are dated -- there were always people who deposited them the second they arrived. Because of this, we had to move money over from our interest-bearing account into our checking account on the same day we mailed the payroll out -- which could cost us a few hundred dollars each month in interest.

And despite all that, several times a year there would be a desperate call from someone saying their paycheck hadn't arrived by the due date. So being nice folks, we'd make out a duplicate and ask them to void the original and hand it back in if it showed up. And perhaps once a year, we'd find when the next bank statement came that somebody had deposited both -- which meant taking the extra out of their next paycheck or even (since the people who screwed up this way were usually part-timers) their next several paychecks.

We discussed making direct deposit mandatory from time to time. As long as I was there, we never went ahead with it, because the relatively few people who were still getting paper checks felt really strongly about doing it that way. But it sure would have made our lives easier.

[Pab Sungenis]

24. Get a separate savings account

...and use that for your direct deposit. Then, every pay period, move the money back out of the savings account into checking, and make sure no one has withdrawal privileges on that checking account!

This way, if they get a wild hair up their ass, they won't have the money there to seize, and will have to ask you nicely for it, the way they're supposed to.

I haven't trusted direct deposit or anything like it since I read the Knisley v. First Union case. Giving anyone full access to your accounts is bad mojo.

[Freedom_from_Chains]

27. As I said in my original post

Their withdrawal resulted in a negative balance. The bank would have come after me for the shortgage. In other words, the funds didn't have to be in the account.

[MADem]

7. Some people, like those who work for Unka Sam, have no choice

It's the mandated form of payment.

[etherealtruth]

8. I've always been very leary of this ...

I guess with good reason. Thanks

[LSK]

22. same here

I feel that nobody should be in my checking account except for me.

[napi21]

10. Why is the Co. saying she wasn't entitled to that pay amount?

I've been dealing with the ACH system since it began. The first business to use the ACH system was the Post Office, I worked for the second user company. There has always been a method that a user could reverse an error, and I think that's what you're talking about. You have to remember, even if your wife had cashed a paper paycheck, if the co. felt it was unearned, they would try to reverse that transaction. That's one of the reasons a lot of businesses won't cash paychecks.

I wish you luck with your case against the company, and I hope those Atty's don't cost you more than the darn paycheck, but it's really no fault of the ACH system. You're problem is with her employer.

[Freedom_from_Chains]

16. Yes it is a problem with the ACH system

This is not a matter of a clerical error but a dispute as to wages earned.

Under a paper check system if such a disputes arises the parties have one of two choices, come to terms over the dispute, or litigate, which since the check is in my account the ball is in the company's court.

But, under this system if a worker disagrees with the company the company can just say "Fuck you, we're taking our money." and the ball is in my court to do something about it. Needless to say most corporations have a lot more resources to litigate than your average worker does so you are not starting off in a real strong position. So my problem with ACH is this rule even exist in the first place which is too the advantage of the corporation.

But you need not worry about us racking up legal fees as the attorneys are chomping at the bit to take this one on retainer since the issue has become much larger than a single paycheck.

[SammyWinstonJack]

11. Thanks for that info.

:wow: I need to tell my husband about this as his paycheck is direct deposited, in fact, I think that is the only way his company issues paychecks. This isn't right. Good luck!

[Eloriel]

12. This is one reason I won't use PayPal

which while not the same thing still they can take money OUT of your checking account -- your real one -- without you knowing or approving that in advance, if there are disputes. And I've seen a LOT of people have disputes and get very seriously hurt by them.

I think there's a whole website about PayPal -- yeah, here it is:

http://www.paypalsucks.com/

Edited: someone ought to post the Andy Stephenson debacle on that site. When a certain DUer posted a thread saying, "Tell me how PayPal works," I felt really little and small by airing my complaints about PayPal when in reality all that was being asked was, literally, how does it work. In retrospect, I wish I'd been more vocal on the subject. We might have avoided the whole problem if we'd gone with BidPay or one of the other similar services. I do not trust PayPal at ALL and find them highly unethical. So what are good liberals doing patronizing an organization like that, huh?

[Sal Minella]

20. People laugh at me for paying bills with paper checks but

when the phone company installed DSL my next bill was $279. I called the phone company and my bill was adjusted to $106, which I paid by check as usual. Fat chance I would have ever seen any of that $173 if they had already sucked it out of my checking account.

That $173 will pay for a lot of stamps.

[Freedom_from_Chains]

23. That $173 will pay for a lot of stamps.

LOL, You got that right.

But the cashless society is so convenient, until the aristocracy decides to put you out in the cold.

[NVMojo]

13. this happened to my son ...

[niallmac]

14. Oh shit oh dear.

I digest the up coming bankruptcy law change and the possible doubling of my credit card payments and the gas prices and the housing bubble and now this. I feel like the coffee
jacked kid Tweek on South Park.

[Freedom_from_Chains]

15. Yea, surf ice it to say

that the new corporate world is not constructed with the best interest of the worker in mind.

[peacetalksforall]

21. Corporate + Politician + Agenda = WAR on the little people.

Power and Profit to a few.

They want us in the not-talked-about lock-box. They want us paying taxes and willing to be be treated like a mushroom delicacy. If we are silent, submissive, compliant, obedient, and unconcerned about medicine, education, justice, and war ... we will be nurtured for their feasts.

[malta blue]

17. My company will not ensure delivery of your paycheck

unless you use direct deposit. How'd ya like them apples...

[pitohui]

18. hub's co. will no longer issue checks, direct deposit the only way to go

unfortunately we do what we must do to remain gainfully employed

payment by direct deposit is now the standard & small firms are not necessarily going to be able to make out a separate check for the lone luddite in their employ

[laureloak]

25. Thank you for the information.

Direct deposit works great for our family.

[Freedom_from_Chains]

26. Hopefully it will continue to do so.

[Lefty48197]

28. This happened to a guy I worked with too

They deposited his last paycheck, and then somehow, they withdrew the money, saying he had tools or something, and held the money until he straightened everything out. It's scary as hell to think that they can withdraw money from our accounts.