Have a line of credit at a credit union and for some time they have been deducting money from my checking account to pay on my line of credit without my authorization. I've checked my original loan document and it mentions nothing about their rights or intent to do so.

To the point, is their unautohorized movement of my funds to make a line of credit payment a violation of the FDCPA? Could an argument tyhen be made that this is theft?
The line of credit is closed, thus I am no longer able to access the funds to withdrawl what they have taken. This has happened many times and from what I gather if I can prove the unauthorized transactions, each one carries a violation fine of $1000 correct?:confused:

Have a line of credit at a credit union and for some time they have been deducting money from my checking account to pay on my line of credit without my authorization. I've checked my original loan document and it mentions nothing about their rights or intent to do so.

To the point, is their unautohorized movement of my funds to make a line of credit payment a violation of the FDCPA? Could an argument tyhen be made that this is theft?
The line of credit is closed, thus I am no longer able to access the funds to withdrawl what they have taken. This has happened many times and from what I gather if I can prove the unauthorized transactions, each one carries a violation fine of $1000 correct?:confused:



So the line of credit was paid twice, once directly by you and once by direct withdrawal?

If there is nothing in your paperwork covering this on either account I would say they are in violation without a Judgment against you.

I've never seen a line of credit that didn't authorize direct withdrawal if the payments are X days late or not paid at all but perhaps they slipped up in your case.

Have a line of credit at a credit union and for some time they have been deducting money from my checking account to pay on my line of credit without my authorization. I've checked my original loan document and it mentions nothing about their rights or intent to do so.

Have you checked the paperwork concerning their rights as to the checking account? It's possible that the paperwork you signed when you opened the account gave them the right to deduct from that account if you had any other accounts with them, including lines of credit, where payment was due.

And don't forget to check any amendments to their rights concerning your checking account which may be been put in place after you opened the account.

So the line of credit was paid twice, once directly by you and once by direct withdrawal?

If there is nothing in your paperwork covering this on either account I would say they are in violation without a Judgment against you.

I've never seen a line of credit that didn't authorize direct withdrawal if the payments are X days late or not paid at all but perhaps they slipped up in your case.

Have had account for many years... made payments regularly. When money crunch hit me I didn't make my payment and they took the money out when the account went delinquint. I would have thought their recourse was clooection agency, credt reporting etc but not taking my money without authorization... thoughts?

Have had account for many years... made payments regularly. When money crunch hit me I didn't make my payment and they took the money out when the account went delinquint. I would have thought their recourse was clooection agency, credt reporting etc but not taking my money without authorization... thoughts?


I'd go with previous advice - review all the paperwork on both accounts and determine if there was ever a provisons which allows them to withdraw the money if you are in default.

I know credit card companies and so forth send a slew of paperwork every year (which I admit I almost never read) and my feeling is that it's contained in there - somewhere.

I've heard financial advisors tell people to never open a line of credit or charge account or loan at the same bank where you have an account because, even in error, this can happen - of course, in this economy, I doubt "stranger" banks will lend money to people.

Here's something interesting I just found... this is language from the Terms and Conditions of an application for a loan from the North Jersey Federal Credit Union:

"If Credit Union has a federal charter: Statutory Lien - If you are in default on a financial obligation to us, federal law give us the right to apply the balance of shares and dividends in all individual and joint accounts you have with us to satisfy that obligation. After you are in default, we may exercise this right without further notice to you. (We have a federal charter if our name includes the term "Federal Credit Union.") If Credit Union has a state charter, except in Ohio and Rhode Island: We have a statutory lien on the shares and dividends and, if any, the deposits and interest in all individual and joint accounts you have with us and may exercise our rights under the lien to the extent permitted by state law. (We have a state charter if our name does not include the term "Federal Credit Union.") For all borrowers: You pledge as security for this loan all shares and dividends and, if any, all deposits and interest in all joint and individual accounts you have with the credit union now and in the future. The statutory lien and/or your pledge will allow us to apply the funds in your account(s) to what you owe when you are in default. The statutory lien and your pledge do not apply to any Individual Retirement Account or any other account that would lose special tax treatment under state or federal law if given as security."

https://www.njfcu.org/secure/frm_loanapp.aspx

This language means that both federal law and state law give credit unions a lien on the assets of all accounts you have with them, and they are permitted by law to attach those assets to repay any loans you have with them which are in default.

So both federal law and state law give them the authorization to take funds from your checking account to pay the line of credit.

I haven't found the specific federal law that permits this but I have no doubt that it exists.