From the WSJ. The main problems seem to be from competitors not CKFR.
AE
Missed Payments and Glitches
Drive Online Bill-Payers Batty
By MICHELLE HIGGINS
Staff Reporter of THE WALL STREET JOURNAL
When he signed up for service three years ago, Greg Judd thought paying his bills online would mean no more late payments.
Then last week, a representative from the local water company knocked on Mr. Judd's door holding a receipt book of missed payments and a work order to shut off his water. Turns out the company wasn't getting its money even though Mr. Judd pays the bill online automatically. "I quickly wrote a check," says the Fairfield, Conn., benefits consultant.
The Internet was supposed to make paying bills as easy as a click of the mouse. But more than a decade after the ability to pay bills online was introduced, consumers still are running into maddening glitches, from erroneous account numbers to payments that get lost in cyberspace. In some cases, businesses don't realize which customer a check is coming from when it arrives and as a result don't credit your account.
Such problems are one reason that online bill-paying hasn't caught on as fast as banks would like. Banks have been pushing this service, in part because of research showing that customers who pay online are much less likely to switch banks. Nearly 17 million households will pay bills online this year, up 41% from 2001, according to Forrester Research.
But that represents only a tenth of U.S. households. Even as more people sign up to pay online, a lot are dropping out. Gartner, a research firm, early this year surveyed 30 large banks and found 17% of their online customers had dropped online bill payment in 2001. Of those customers, a quarter cited payment problems as a reason.
Many companies simply aren't equipped to receive electronic payments. In fact, according to research firm Celent Communications, 32% of all online payments aren't electronic at all, but rather an electronic order to the bank to cut and mail a check on your behalf. As a result, even if you think you're paying a bill in plenty of time, sometimes it arrives late and you can wind up paying a late fee.
PLAYING IT SAFE
Here are some ways to minimize glitches when you pay bills online.
• Pay bills only at the site of the biller instead of through a bank or bill-pay service.
• Use a bank that takes responsibility for late or lost payments that aren't your fault.
• Make sure addresses and account numbers are kept current so that electronic payments aren't misdirected.
Most banks and online bill-pay services say if they make a mistake they will fix it, adding that consumer complaints are rare. CheckFree, the biggest online bill-pay provider, says out of all the transactions it handles, consumers have problems with fewer than 1%. Some of those may be the consumer's fault -- from typos in the account number to hitting the payment button twice. Even so, when problems occur, getting them resolved can be a nightmare.
When Will Geiger of Mendham, N.J., missed a decimal point and paid $27,556 to his gas company instead of $275.56 earlier this year, it took several calls to mutual-fund giant Fidelity, which handles his online bill-pay account, and to his gas company to resolve the discrepancy. It took over two weeks before he was reimbursed. "I ended up going around in circles," says the 54-year-old retired chemical engineer, who eventually got a letter from Fidelity that explained the blunder to the gas company.
There are other potential glitches as well. Electronically cut checks can look like junk mail to some businesses, which in rare cases have even been known to throw them out. Another problem: People who pay online have to pay close attention to any changes in a payee's address, or the bill could go to the wrong place. When you pay by check, address changes are usually pre-printed on the return envelope.
Some consumers try to avoid such mishaps by signing up for automatic withdrawals from their credit-card accounts. That way, the biller automatically deducts the due amount from your account. But this method has its own drawbacks. Customers forfeit some control over making the payments. In addition, it can be more difficult to dispute a charge if the company already has your money.
Some banks and bill-pay services say they work hard to help customers sort things out. CheckFree says it tries to prevent missed payments by verifying the correct billing account and address information with the biller. The company also will bear the responsibility for any late-payment charges up to $50 as long as you schedule the payment on time. Commerce Bank of New Jersey says its representatives will get on the phone with the customer and biller to help resolve disputes.
Contrast that to Sash Erkskine's experience when she found out her cable company had changed billing addresses and wasn't getting the payment from her bank, FleetBoston. She immediately sent a new check to the correct address and stopped payment on the old check. At the same time, the cable company found the old check, which then bounced.
"Fleet was of no help," says the technical consultant from Plymouth, Mass. "It essentially fell on my shoulders to convince the cable company that I didn't owe them, that they had the money and to get the returned-check fee reversed." A Fleet spokesman called the problem an "anomaly" and that Fleet would reverse any fees.
Last week, Glenn Runyan was charged a $28 overdraft fee for insufficient funds on his mortgage payment even though the loan was paid off when he refinanced 10 days before. The bank, Hibernia, said the authorization he signed five years ago required a two- to three-week notice to stop any automatic payments. The mortgage company said initially it wouldn't reimburse the $28 overdraft fee.
After a lot of time spent on the phone, Mr. Runyan eventually was reimbursed. "The thing that bothered me the most is their attitude," says the health-insurance administrator from Baton Rouge, La. "Nobody says, 'I'm sorry. I made a mistake.'"
Paul Peters, president of Hibernia's mortgage-banking division, says the bank corrects these types of problems and refunds any fees incurred.
One way to avoid problems is to pay your bill directly on the biller's site, if available, bypassing third-party providers completely. The problem with this approach is you have to switch from site to site as you pay each bill.
Online bill payment should get easier in the future. Part of the reason there are foul-ups now is that customers typically receive their bills through the mail and then attempt to pay them online. Eventually, banks will be able to show you the bill online. That way, the electronic payment will get attached right to the bill, just like in the paper world.
For now, consumers often just have to cross their fingers. Mr. Judd, the benefits consultant, nearly had his water cut off because Paytrust, which both receives and pays his bills remotely, moved and wasn't getting the bill from the water company. Even though the bills went unpaid for months, neither the bill-pay service nor the water company contacted Mr. Judd.
Paytrust, of Lawrenceville, N.J., called Mr. Judd's experience unusual.
Write to Michelle Higgins at michelle.higgins@wsj.com
Updated October 17, 2002 |
