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  e-Check Over the Internet

Shopping and paying bills over the internet is our new national hobby. Until now, most purchases over the Internet and most online bill paying have been paid by credit card. Now, at web sites that offer this option, you can authorize a payment to be charged to your checking account to make a purchase or to pay bills. This type of payment is often referred to as web-based or Internet-initiated "electronic checks" or "e-checks."

You can authorize a single payment, or you can authorize recurring payments.

A single payment takes place when you pay for a purchase or pay a bill with one (and only one) charge to your checking account.

Recurring payments are often used to make ongoing, repetitive payments such as mortgage, loan or utility payments. At a company website, you provide your account information and authorize the company to charge your account automatically on the regular due date. The company then receives your authorization electronically.

Before you provide your account information, the company should verify who you are. For example, if you have established a relationship, they can use information they have on file to identify you - a PIN, password or previous purchase history, for example. If this is the first time you have purchased from this company, they will have to use other methods such as checking a consumer database.

Also, be sure to read and understand the security and privacy policies for that company. It is not recommended that you provide your account information to an internet company you have not heard of before.

Q. Who offers web-based electronic check services?

A. All kinds of sellers and billers offer goods and services for purchase on web sites. Many banks and utility companies allow their customers to make bill payments over the Internet.

Q. If I use a web-based "electronic check", when will my account be charged?

A. Generally for a payment or single transaction, your account will be charged one to two business days after you authorize the web site to charge your account. For a recurring payment you will charged on the due date.

Q. Who can charge my account using an electronic check?

A. Only companies that you gave permission to over the Internet can process the payment electronically.

Q. How do I provide account information for the payment? Do I get a copy of what I provide? Do I have to sign anything?

A. You provide information by reading and keying in the numbers on the bottom of the check. Usually, the website where you are making a payment will provide instructions. (You can also find instructions on this website at http://www.electronic-check.org/reading.htm). You can't write your signature over a website, but you can provide identifying information that will serve to okay the payment (like a signature authorizes your check). Yes, you should be able to print a copy of what you okayed.

Q. What happens if I need proof of payment?

A. The IRS established in the 1970s that the listing on your account statement serves as proof of payment.

Q. Will the company I give my account information to be able to take additional payments from my account?

A. No. When you authorize a company to take a payment from your account, it is for one payment only. If you want to make another payment you should provide the company with a new authorization.

Q. What if I want to cancel a recurring payment?

A. Call the company to cancel. They will explain their procedures to do so.

Q. Can I place a stop payment on the payment?

A. Yes; however you must contact your financial institution in time for them to act on your request before the payment is deducted from your account.

Q. If my electronic check bounces, can the company add a return check fee to the amount of the payment and charge my account for more than the amount of my check?

A. No. The electronic check entry must match the amount of the check. If the company wants to collect a return check fee, you have to provide express separate authorization.

Q. How will an electronic check appear on my account statement? That is, how will I know that the payment has been charged to my account?

A. If your statement lists checks in one section and electronic transactions - such as debit card and ATM transactions - in another section, then the electronic check will probably be listed with the electronic transactions. You'll see the company name, the dollar amount and an identifying word such as "PURCHASE" or "PAYMENT" or even "ACH DEBIT."

Q. Since I don't use the check to make the payment, how will I keep track of the payment in my checkbook register?

A. If you are making just one payment, print the authorization page from the website and record the date and amount in your checkbook register. This is the typical thing to do when you are making a purchase over the Internet.

If you are authorizing a series of payments - called recurring payments - print the authorization page and keep track of the date and amount of the payment as you would for other electronic payments. Depending on your company's practice, they may send you a monthly billing statement. For example, you might authorize over the Internet that your monthly mortgage payments will be electronically debited to your account.

Q. How do I get a refund if I return what I bought?

A. The company you sent the check to establishes its refund policies in accordance with state and federal laws and regulations and lets you know what the policies are. Contact the company directly for questions on refunds.

Q. What do I do if there's an error on my account statement? For example, what if I am charged the wrong amount, or if a payment appears on my statement that I did not authorize?

A. As always, contact your financial institution as soon as you discover an error on your account statement. Federal regulations that protect you from "unauthorized" payments. Remember, always review your checking account statement as soon as you get it.

Also, if the error concerned a recurring payment, contact the company that is sending the charge to your account to change the amount to the correct amount.
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