There was an interesting, yet very unbalanced article in the NY Times this Sunday that discussed some of the perils of setting up your bills on automatic payment (a.k.a. auto-debit). In general, an automatic payment is a way of allowing consumers to authorize a biller to charge their checking account or credit card each month for services ranging from cell phone to mortgages.
Historically, automatic payments have been far more popular for recurring charge types of services where the amount of the charge doesn't change from month to month. For example, I'm far more willing to have my mortgage company auto-debit my checking account the same amount on the 5th of every month as opposed to having American Express auto-debit some unknown amount each month.
The article points out a number of problems that can arise from automatic payments. In my opinion, the article does a really poor job of comparing and contrasting these problems with the overwhelming benefits that consumers derive from auto-debits (like drastic reduction in late fees because they don't forget to pay, increased convenience since they don't have to write out a check, etc.). Electronic payments have sky rocketed over the last 10 years so of course there are going to be some problems. However, to discuss these problems without contrasting them with the problems that can occur with offline payments (i.e. checks), which occur far more frequently, seems unbalanced.
From a biller perspective, you should be very cautious when rolling out your ebilling strategy. Like any other technology solution roll out, there are right ways and wrong ways to do it. For instance, one of the stories in the article is about a person who almost got their Verizon cell phone service terminated because their bill was on automatic payment and their credit card expired. This one really ticked me off because I would guess 99% of the automatic payment systems out there have a process for expiring credit cards. Verizon has really bad ebilling systems as reported here and here. A balanced report might have discussed this instead of spreading FUD about automatic payments in general.
The discussion about identity theft is also fairly comical. To not say that your chances of identity theft from your mailbox are orders of magnitude higher than from an electronic payment service is a joke.
The NY Times should be able to do better.
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