Originally posted by: dullard
I don't know the laws, but from what I've seen, an account never really closes since there may always be outstanding checks and or automatic payments that you are still liable for. The bank can "reopen" it as they please (it isn't really reopening since you were the one who had written the prior check or authorized the prior automatic payment). Posts like this come up a couple of times a year.
This is true, and it's the reason I do everything I can to avoid ACH transactions now.
A year ago I had a dispute with Gold's Gym on my contract. I called my bank (also Wachovia, but I feel any other bank would have behaved the same) and told them not process any more ACH transactions with the merchant. I was stunned when the CSR told me that they could not block the transactions, and offered their dispute resolution instead.
I did not want Wachovia in the middle of my dispute with Gold's. I told the CSR that I intended to close the account to prevent anymore ACH transactions (this is the odd part, the CSR should have told me at this point that closing my account wouldn't stop the transactions, but she didn't).
The next day I walked into the nearest branch, and closed the account (I didn't have any outstanding checks). Sure enough, the next statement came showing a massive overdraft with lots of fees. I called the CSR and learned just how incredibly helpless you are in these situations. Wachovia agreed to forgive half the fees since they had not done a good job of communicating the potential for this kind of event, but they never followed through.
I chalked it up as an expensive lesson. I immediately cancelled the recurring ACH I had set up on my mortgage and utilities. I still have ACH on a couple other items, but they are for much smaller amounts and I haven't figured out how to get rid of them yet (I still use the services).
Recurring ACH is marketed as a convenient way to pay bills with no disclosure about the loss of control you suffer over your money. My suggestion to everyone is to not use ACH until the policies have a little sanity.
