Any repercussions for stopping bank drafts by closing account instead of stopping payments?

[Dennis S]

I have a few business account drafts that I need to stop before 11/1/12, like credit card merchants, some vendors, and insurance. I am moving banks. I don't have the money to leave a safety cushion in the current bank and start the new account at the same time. If I just close the account instead of paying multiple stop pay fees and phone the companies drafting my account to either close my account or set up drafts at the new bank, is there a chance one of the companies might charge me for NSF for Account Closed or something similar?

I waited too close to the end of the month to feel comfortable doing it any other way that I can think of. Also, things have come up so I won't have time to do much phone calling or letter writing until into next month. The companies I need to maintain a good relationship with can be handled OK. It's the CC Merchant accounts I am closing I am worried about. They are terrible to deal with and I would rather just cut them off without the hassle of dealing with them - if there are no consequences.

[DRR]

FWIW.

I've had a bank account that I had closed, re-opened and put into "suspended" status by the bank, and dinged with a negative balance because of a check that I had written 6 months ago and had forgotten about because it was not deposited for about a year.

So just because the account is closed does not mean you're in the clear. You have to cancel any payments made out of the account or else you risk what happened to me. I only add this because you seem to be under the impression that if the account is closed, the vendors are "cut off" - this is not the case if you have an agreement to do recurring payments for example. You've agreed to a payment structure, they've provided the service, you can't just "cut them off." You have to address it at the source rather than at the bank. There's no other way.

[Robert M]

Dennis,

You could get nailed by both the companies and your bank for the equivalent of bounced checks. That's fees on both ends and if it isn't resolved in a timely manner I'm betting it could impact your credit. You don't want to have to deal with any of it.

It's only the 24th. Seven days should be more than enough time to get the paperwork in for changing the bank drafts. You just have to get the authorizations, complete them and get them over to each account/institution/etc. You might not even have to send paperwork. You may be able to do it via the web in a matter of minutes.

Robert

[Jimmypoo]

I’ve closed bank accounts with auto-payments with no negative consequences, but they were for subscription based services (Vonage, etc.) vs a credit card payment or mortgage.

They are not set up as drafts to a checking account, but rather, to a debit card on the checking account, which gives them far less maneuvering room to add any fees unless you agreed to such.

I would suggest you PRE-pay the accounts a few days early, speak to a human to ensure the account info has changed and that NEXT month will be from the new account, and if you can do it in person, all the better, because the old bank will have to take the fall for fscking up (to the extent it does) if there is a double post, etc.

In addition, depending on the draft — car insurance, etc. again - write a check for the final month on the old account, and already have ERASED your previous info from their brain. DO NOT UPDATE IT until after each current month has been cashed/applied.

They seem to offer great abilities to sign you up and bill you THIS SECOND!!! - but the “it takes us 10-14 days, and your billing/withdrawal MAY NOT be able to be stopped…” when you tell the fscks to STOP.

So use that - process the old way, and as soon as it is done, THEN give them your new account info online - and verify with a phone idiot (with time/date/name/badge # and/or call reference number) so THEY TOO will have to eat their own error if they mistakenly charge your bank after departing.

[Will Collier]

Bad idea. My sister did something like that about 20 years ago. She had a summer job in a resort town when she was in college, and closed out the account when she left to go back to school.

Unfortunately, she didn't bother to balance her checkbook first, and wound up bouncing several still-outstanding checks. Took forever to convince her that it wasn't the bank's fault (let's just say she had been rather... sheltered in financial matters).

[RgrF]

c

[deckeda]

Banks do not take lightly people who write checks against closed accounts. You'll get burned on both ends, as expected.

[Robert M]

Jimmy,

A correction. The old bank will not take the fall for any foulups in this kind of situation. It's the account holder who takes the fall because it is his/her responsibility to contact each account that automatically gets payed to make sure the account info is changed and, if the change doesn't hit in time, to ensure there is funds in the old account for them. The bank has nothing to do with any of this. It's all about the account holder.

Robert

[NewtonMP2100]

.....you will lose your soul.....???

[OWC Jamie]

NSF


sign up for overdraft protection ?
as a temporary safety measure