Automatic payment withdrawal systems are an excellent idea in principal as they allow the bill payer to pay for services conveniently and without fuss.

Once the initial automated payment has been set up no more action need be taken and the payments will generally go out at the same time every month, enabling the user to budget their income efficiently and monitor their outgoings with a degree of convenience compared to other systems of payment.

However, as with any system where trust is placed in a third party, I do think those using automated payment systems need to be on guard against mistakes, as although infrequent, no system is infallible and simply relying on the bank to ensure no problems occur is not wise.

Simply checking statements every couple of months to ensure all payments have been made and cross checking with utilities companies or service providers regularly that the payments received are accurate and at the correct level is an easy way to ensure that this time saving way of bill payment does not cause any problems.

If problems do occur, the procedure for having any overpayment's returned to you is usually simple and fast. The UK direct debit service - the equivalent system - guarantees this, which means although the onus is on the customer to spot any mistakes, they will be quickly rectified once the bank is notified.

Often regular payments made through automated systems will actually result in a small discount to the customer over the course of the year, as from the payee's perspective automated payments are far less labor intensive and involve fewer man hours.
Most people will have been charged a late payment fee at some time or another and the automated nature of this system means that the payer does not have to concern themselves with due dates or surcharges applied for missing these dates.

I would recommend automatic payment withdrawal systems, but used with a degree of caution. I do not think the potential drawbacks - a very occasional and easily rectified mistake - outweigh the numerous advantages and the benefits to household budgeting that they allow for. Plus, no more queuing to pay those bills!

Learn more about this author, Hannah Beaven.
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