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Premature Electronic Funds Transfer

Question: Can a mortgage lender draft an overdue payment on a date other than the date you authorized and refuse to refund it? I received a phone call from my mortgage company in an attempt to collect a past due payment. I authorized the payment for January 31 but they drafted it on the day of the conversation, January 20 instead. Because I have overdraft protection, this zeroed out my savings and dropped my checking account into the negative $200’s and dropping.

Answer: No. What you describe is an Electronic Funds Transfer Act violation. The amount of the payment may not be damages, but any harm caused by the premature debit, such as overdraft fees, is recoverable. There are also statutory damages.

You should request your own bank to reverse the debit as unauthorized immediately. Follow up any oral request in writing. Also submit a “qualified written request” (so labelled) to the correspondence address of your mortgage company immediately, asking it to reverse the debit and pay any fees that result.

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