Legal Question in Credit and Debt Law in New York

Bank Account Debit Drafts

I recently severed my relationship with a debt consolidation company. The contract had been set up for an electronic debit of $250.00 per month out of my bank account to be used to pay settlements from my creditors. I was disatified with the service and put a stop payment on my account for the $250.00 and faxed them written notice of my cancellation. It appears that the debt consolidation company could not get $250.00 out of my account so they re-submitted for $200.00 which was available at the time. Is it illegal for a company to change the debit amount without my approval and if so what recourse do I have? By the way this un-approved debit caused my account to be overdrawn and many bounced checks.


Asked on 12/10/03, 12:09 pm

2 Answers from Attorneys
Andrew Nitzberg Andrew Nitzberg & Associates

Re: Bank Account Debit Drafts

This one is interesting!

The contract you signed with them will answer many of your questions. You may have had to give them 30 days notice.

However, if they have not performed properly, they can get into real trouble. You may also sue them for 'punitive damages (big dollars not related to your actual monetary loss) under federal law.

Remember, they are just debt collectors working the other side of the street. This is not a fun business and few people get involved in it except by default - they cannot do anything else!

You are welcome to a consultation for no fee at my offices at 42 west 44th street, NY,NY. Please call for an appointment first (646) 591-5786.

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Answered on 12/12/03, 12:14 pm
Guy Lewit Guy Mitchell Lewit, Esq.

Re: Bank Account Debit Drafts

You can sue them for your actual damages. They cannot take money once you've severed your relationship (but the contract may have terms that you may not be aware of) so read that carefully.

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Answered on 12/10/03, 2:07 pm


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