ACH Debit Authorization

Has anyone else encountered a payee, a landlord in this case, that effectively charges them a surcharge ($20) if they refuse to authorize an ACH direct debit to their bank account? Of course it is not called a surcharge, but a discount for reducing processing costs. At the same time, they refuse to allow the discount for a fully electronic payment initiated by the renter.

Share this

I've seen that with my

I've seen that with my student loan repayments. I didn't quite understand it at first, but I now think that it's a matter of control: The payee is willing to pay a small to ensure that they get timely payments, without having to send reminder notifications, etc.

This is the first time I've

This is the first time I've heard of a landlord doing something like this, but I haven't dealt with a lot of landlords in my life; I'm on my third and best landlord, and all of them so far have accepted checks. If you think about it, this is not much different from requiring a credit card or something like that. Personally, I prefer controlling the exact timing using my (free) bill pay service, and I'm not all that fond of having the potential for a typo to clean out my account and then being stuck trying to recover the money. Also, this could cause problems if there are any disputes when you move out - they could just take the money they think they're owed and you're stuck going after them for the rest, rather than only having your deposit.

If it's really a surcharge above and beyond the advertised rate and not a discount for allowing ACH, I would personally rent elsewhere. If it's a discount it'd depend on how much the total rent is. At my $2200/mo level $20 is nothing so I'd just eat it. In the $600 range, I'd probably consider it, because the level of risk would be less. You could perhaps see if you could negotiate down the deposit due to the added risk you're taking by allowing ACH.

Does it matter which rate is

Does it matter which rate is advertised? Seems to me that the only relevant point is the $20 difference.

There is no advertising

There is no advertising involved, as this is a lease renewal. All new renter leases over the last two years have been ACH involved and a total of 600 leases are ACH, according to the Controller when I talked to him. My guess is that is likely about half of the current total. The discount/surcharge may well be new. I can understand the desire to cut costs, and the right to implement the policy, although a company that pays too much attention to its rights and not enough to satisfying its customers may drift off line. You would think that for a marginal cost of $20 for processing a check, they could probably get Alan Greenspan, who may be available.

Regards, Don

The relevance of the

The relevance of the advertised rate has to do, I would presume, with whether one is willing to do business with someone who advertises a price that is only honored subject to additional (possibly risky) terms which are not customarily part of similar arrangements.

It's not relevant to the price, per se, but it might serve as a indication of how one could expect to be treated in future disputes or renegotiations.

(never mind; I see no

(never mind; I see no advertising is involved)

I've never heard of it

I've never heard of it before, but its not surprising. Laws vary from state to state, but, assuming that this is clearly set forth in the lease, as opposed to being an attempt by the Landlord to verbally modify the lease, then I don't see anything wrong with it.