Electronic Banking and Online Bill Pay: A Basic, and Urgent, Reminder

I recently heard that the January snowfall total in our area of Michigan had surpassed the previous record. While I haven’t heard a similar report for the cold temperatures we’ve had, I’ve got to believe that this will turn out to be among the coldest, if not the coldest, winter on record. It was against this back drop that I received an email at home one recent evening alerting me to a situation that would require our immediate attention. The email concerned a family that was facing eviction from their home, first thing the next morning. Not eviction proceedings or a court appearance mind you, but actual “court-officer-at-the-door-to-put-your-belongings-at-the-curb” eviction. The thought of anyone facing that possibility, especially in this kind of weather, demanded our immediate attention.

Accessing the on-line records of the register of deeds office for the county where the home is located, we learned that the mortgage for the home had been foreclosed by the mortgage lender nine months ago. Calling the court, we learned that the lender had received a judgment for the possession of the home almost a month ago, and had recently received an order to evict our clients (a husband and wife, with young children). While the easy (and perhaps obvious) target of ire might be the mortgage lender, as our inquiry continued, a more tragic story emerged.

Turns out that about a year ago, our clients — experienced (and almost exclusive) users of electronic banking and online bill pay — decided that they would shift their monthly mortgage payment to online bill pay. The necessary arrangements were made online and our clients dutifully went online every month to make the payment. Or so they thought.

For a house to go into foreclosure while the payments are current made no sense, so we asked the clients to obtain confirmation from their bank that the monthly payments had been properly transacted, electronically. We received a call back a short time later with the news that according to the records of our clients’ bank, none of the payments made in almost a year had gone through. It then became apparent that errors had been made when the online accounts were set up and/or the electronic payments were attempted. Our clients, in the belief that everything was fine, never bothered to obtain confirmation of payments as they were made, or follow up with their lender or their bank. And, like some (many?), they rarely accessed or reviewed their online bank statements.

When it comes to online banking and online bill pay, the issues we most often hear about deal with security. I would submit that it gets even more basic than that. While electronic banking and online bill pay offer incredible convenience, they require a heightened degree of follow-up and confirmation. In the absence of a paper statement received by mail as a record and monthly reminder, the burden shifts totally to the customer to affirmatively, intentionally, and periodically check the online records of their bank and creditors to make sure that electronic payments have been properly transacted, received timely, and confirmed. Our clients didn’t do this, for almost a year, and now may lose their home. Absurd? Ridiculous? Could never happen to you? … How often do you confirm your online transactions?

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