A customer of ours is claiming 22 ACH debit attempts to her account were unauthorized. Each ACH debit attempt was returned and resulted in only an overdraft fee. The account is currently overdrawn about $550 because of this. These debits attempted to come from about 5 different online payday loan merchants. Her account history clearly shows ACH credits from the online payday loan merchants first. (Probably when she obtained and got proceeds for her online payday loan.) Each ACH transaction did come in under her name.

It is my understanding that the numerous online payday loan vendors don't offer a customer service number and the only method of repayment they'll accept is repayment from the same checking account that they deposit the loan proceeds into.

On the customer's WSUPP, she claims that she did authorize the original ACH debit, but then revoked that authorization on 9/15. The funny thing is many of the initial loan deposits from those payday lenders were made themselves after 9/15. I left her a message and haven't gotten a call back.

My reasoning is that at this point all signs point to the ACH debits being authorized. All payday loans needing repayment now were originally credited in her account. The ACH file matches her name. Her date of revoking authorization does not make sense and most of these companies probably can't even be contacted to revoke authorization. It appears to me that the woman now has no intention of repaying her numerous online payday loans and wants her bank to refund her about $550 in fees also. Can we deny this claim unless she can show us proof that she revoked the authorization? Any help will be great.

What sort of proof would you accept? I don't know that any will be readily available for this sort of dispute. Otherwise, your reasoning appears sound and I wouldn't pay the claim until she satisfies your questions.

If you do end up refunding the fees, at least you haven't lost any actual money; and you can tell her to take her business elsewhere.

Not part of the original question, but would you file a SAR on this customer?

We have had serious issues with payday ACH withdrawals and our customers were able to prove that the authorizations were only good for the amount of the loan but the payday withdrawals keep coming- it appears to be an issue with these payday loan companies not terminating the auto withdrawals once the payday loan is paid off. And you cannot get a real person when you call these companies. We return as unathorized and close the account- they get the message then to stop. We also advise our customers to file complaints with the division of banks. If they get enough complaints they might do something- one can only hope. Just another painful consumer trap that our customers just can't stay away from.

I would not file a SAR over $550 in unpaid OD fees. I'd focus my efforts on ridding myself of this sorry customer.

Thanks for the replies. The customer said she has Western Union quick collect receipts to prove she paid she debts using a method different than her checking account. I said once she provides those receipts, we can see about refunding fees.