In today’s digital economy, most families pay their monthly bills by automatic transfers from their checking account.  Your water bill, gym membership, and the monthly fee for your home security system can be set on autopilot, made automatically by preauthorized transfers from your checking account.  But what happens when you want to cancel that gym membership or stop using that home security system?

The answer is governed by the Electronic Fund Transfer Act.  That law states that consumers may stop payment of  preauthorized electronic fund transfers from their checking account simply by providing oral or written notice, at any time.  That’s it.  Federal law requires your gym or your home security company to honor that request.  And failure to honor that request also violates the Kentucky Consumer Protection Act.

But this week, our law firm filed a new class action alleging that a home security company operating in Kentucky does not honor these requests.  Specifically, Craig Henry’s clients allege that they called and wrote their home security company on multiple occasions, after their security contract expired, asking the company to stop making transfers from their checking account.  Not only did the home security company refuse to honor their request, but it appears that company has no procedures in place to stop deducting customer accounts once those payments have begun.

This type of consumer abuse is prohibited by federal law.  If you have experienced similar conduct from your home security vendor, your gym, or any other company, please call us to see if we can help you.

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