Legal Question in Credit and Debt Law in Connecticut

Re: automatic payment withdrawals from checking accounts

When you opened your checking account you were given a pamphlet of rules to which you were agreeing. When you first authorized EFT drafts on your account (which is what the automatic payment arrangement is) you were given another set of rules.

These two sets of rules constitute your contract with the bank. Somewhere in them (and the bank will gladly give you new copies of the current rules booklets) you will find provisions that cover what happens if the bank makes a mistake and removes the wrong amount. I can almost guarantee that the rules insulate the bank from having to reimburse you for bounce charges imposed by the payees of your bounced checks. However, if the mistake was the bank's it will almost certainly refund its own charges.

You have assumed the mistake was the bank's. Please consider the possibility that the mistake was the insurance company's. If the insurance company sent in a draft for the wrong amount, the bank had NO CHOICE but to honor it, because you told the bank to honor EFT drafts by that company. This is a risk everyone runs in setting up automatic payments.

You should immediately contact your insurance company and find out how much THEIR records show they drafted in the month in question, and compare that with the amount actually removed. If they are the same, you need to find out why your premium payment increased. If they are different, further investigation is needed.

If it turns out the insurance company made a mistake, it should be willing to reimburse you for ALL the charges you incurred. And, if you request it, it should be willing to give you a letter owning up to the error, for you to show the recipients of the checks that bounced.