Here is my new finding about pre-authorized payments.
Couple words about what it is you can find here:
http://en.wikipedia.org/wiki/Direct_debit
http://www.canadabanks.net/default.aspx?article=Pre-Authorized+Debit
Many of you have probably membership with sports clubs, which require sign membership forms and sign pre-authorized form from your bank.
Telecommunication companies do it as well, such as Rogers, Bell ... etc.
The most dangerous companies are small companies without permanent business address.
Pre-authorized form, signed by you, gives them permission to take money directly from your account (as much as they want).
Here is short description of my case:
It was not membership in a gym, but another company was keep charging me with different amounts every month.
I made a mistake - signed pre-authorized form from my TD Canada Trust bank.
I thought that it should be easy to stop such payments but I was wrong. I went to TD bank,
which is located downtown Toronto. I asked teller to make such operation with my account, but what he told me was shocked me:
1) If you pre-authorize another company or financial institution take money from your account - you lose control. Simple case is automatic money withdrawal, based on bill for mobile services.
If you decide do not continue use their services, they still can get money from your bank (as much as they want), especially, if you have contract with them.
2) To stop payments you can call to company, which you gave permission to take money from bank account and "gently" ask them to stop doing that.
In some cases you have to fill special forms and bla bla bla...If it is small company you can be in a trouble.
2) Technically, you can stop such payments if you know exact amount to be taken and name of financial institution and in perfect scenario - date when next payment will be taken.
You can call to your bank and verbally say that you want to do it or use bank internet services,
such as "Easy web" for TD Canada Trust.
By other words - it is doable if you know exact amount.
But .... If you have being charged periodically with different amount - no WAY!!!!!!!!!!!
This method will not work !!!!!
My recommendations:
1) Use cheques to pay for your services or pay bills rather than use pre-authorized form of payment - think before you sign pre-authorized form.
2) In case if you are in such kind of trouble, try to find answers by following link:
http://www.helpwithmybank.gov/faqs/banking_autowithdrawals.html
and ... if nothing works - close account and open another one.
P.S.
My solution was to close bank account.
Please, let me know if you know other options, which work in Canada.
Glad to see someone posting about this and it actually showing up in google search results. I was in a similar situation a couple of years ago where my landlord had insisted on a Preauthorized payment. Well, when I called my bank asking them to cancel it they told me I can't cancel it, I have to ask the landlord to cancel it. Is there not something inherently sick about that? This is my bank account with MY money in it, and yet some third party has complete access to it and has the freedom to close or keep open this preauthorized payment scheme. NEVER sign these. I had to go the route you did, closing my account, what a hassle. That won't even work all the time though, if you close it and the company tries to withdraw money from your bank within 10 days or so of you closing your account, itll cancel the closing of your bank account and reopen it.
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