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Watch Out for Online Bill Pay Errors

Written by Nickel - 16 Comments

It’s no secret that I’m a huge fan of paying our bills online. We’ve requested e-bills from every company that we can, and we also use our bank’s online interface to send checks to payees that don’t accept electronic payments. All in all, it’s very convenient and we save a ton on postage.

When we first started doing this, I worried that check payments might end up getting improperly credited. After all, we can’t include the payment stub when we initiate the payment online. Fortunately we’ve never had a problem — until this week…

Our six year old recently had a tonsilectomy and adenoidectomy and, as a result, we’ve been getting bills from everyone under the sun. The doctor, the anesthesiologist, the pathologist, the hospital, etc. Anyway, two nights ago, my wife told me that the hospital had called about an overdue bill. I was a bit surprised by this, because I clearly remembered having scheduled the payment.

Yesterday afternoon I double-checked with the bank and, sure enough, the check has already cleared. I assumed that the hospital’s billing department had simply gotten their wires crossed, and the people making the phone calls were working from an outdated list of overdue accounts. Upon calling, however, I learned otherwise.

After pulling up our account, the billing rep got back on the phone and reported that the bill was indeed unpaid. When I told him that I have a cancelled check showing that it’s been paid (Bank of America scans all of your checks and puts them online), he paused for a moment and then asked if I could fax it to him.

That’s where things stand right now — I’ve faxed an image of the cancelled check and am waiting for them to respond and (hopefully) clear our account. The most frustrating thing is that I’m still not sure what went wrong. All I know is that this clearly isn’t our fault, nor is it our bank’s fault. While we didn’t submit the payment stub, the check had the correct account number clearly printed on it and it went to the right place.

Regardless, I’m glad that they went to the trouble to contact us. If they hadn’t, we’d likely be getting another call from a wayward collection agency.

Published on May 29th, 2008
Modified on July 26th, 2008 - 16 Comments
Filed under: Banking, Online

About the author: is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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16 Responses to “Watch Out for Online Bill Pay Errors”

  1. 1
    Jane Says:

    I’ve experienced something similiar with our son’s surgery for ear tubes.

    Sometimes all the billings at hospitals cause multiple charges or “accounts” even though the account is the same account number or linked to the same SSN/insurance holder.

    It’s extremely frustrating how poorly hospital billings are handled by the hospital.

    When I called to clear up an issue of why an account was sent to collections, it turns out we had FIVE different hospital bills, all under the same account number, but each with its own billing and payment requirements. Why they couldn’t consolidate those billings and apply our payment towards one final amount, I have no idea. No amount of arguing or talking to various supervisors did any good.

  2. 2
    nickel Says:

    Jane: Yes, it’s very frustrating. And on top of multiple bills from individuals entities, the practitioners themselves (doctors, anesthesiologists, etc.) all independently. Since everyone outsources their billing nowadays, it seems like they should be able to centralize it. Like if a procedure was done at a certain hospital, all billing goes through service. You might still get multiple bills because different things get turned in at different times, but at least there would be a single point of contact.

  3. 3
    JB Says:

    If there are numerous payments from unique clients to a single vendor, banks will mail them together in one envelope.

    The vendor then needs to interpert the checks to go to the correct account.

    It is extremely important to include under the comments section the account name as well as the patients name. Always use ’smith,a – 1234′ so they have to chances to find the right account number.

    They might get your check in a pile of 100.

  4. 4
    nickel Says:

    JB: Interesting point — I hadn’t though of that. I guess I always imagined my check getting put into an envelope and being sent on it’s merry way, but it makes sense that they would bulk ship whenever possible (though in this particular case I can’t imagine them having to send more than a few).

    Your point about including the patient’s name in the memo is also a good one. I usually do this, but it’s possible that I forgot in this case. Nonetheless, the check clearly indicated our account number, and it doesn’t seem to have been posted anywhere in our account (even if they applied it to the wrong person, it should still be in our account).

  5. 5
    losh Says:

    I used the online bill pay to send a check for our apartment rent and had the same thing happened to me. The check was cashed but 2 weeks later we received an “start of eviction process” letter from the apartment management. We have been paying our rent on time for about a year at that time, you would think they would have at least called before starting the eviction process.

    We cleared things up by showing them the image of the cashed check, but it took them months to clean up the mess on their end. They could not find were to money ended up.

  6. 6
    Chief Family Officer Says:

    That’s happened to me once as well, with our eye doctor. They received payment, but had to figure out where it ended up since it wasn’t originally credited to our account.

    I really like the tip about including the patient’s name – I haven’t done that before, but I’ll definitely be doing it from now on.

  7. 7
    cemccon Says:

    You may want to ask your medical provider(s) to use peryourhealth.com; a centralized, on-line billing system that eliminates the need for including the paper ’stub’ that so many have grown accustomed to.

    While I perfer on-line bill payment also; I still remit paper checks via snail-mail to any and all billers who send a paper statement with no built-in way to pay on-line.

    With some larger providers, you may be able to call in a credit-card payment … try this instead of on-line payment thru your bank.

  8. 8
    jay Says:

    This is really scarey! We also deal with medical billing ALOT! So far, so good. Since we use a third party bill pay service, and we can put notes on individual checks, so we do. The only other strategy might be to mail similar bills to same address on sequential days/weeks so you know when things should show up. Still, pretty fallable.
    Luckily your bank (as ours) has scanned images you can fax!
    Calling in a CC payment is also a REALLY good idea!

    I think medical billing is one of the biggest PITA you can face, Not only the kind of mixup you detail, but how they bill insurance (imagine having two different insurance policies), companies that don’t pay attention to discounts they agreed to with your insurance, so on. Takes way to much time to deal with this stuff.
    Now we’re also dealing with an FSA that wants to cherry pick what they’ll cover. In this case IT’S OUR MONEY!
    *rant over* ;-)

    Advice to everyone: meticulous record keeping, paper trail of disputes (e.g., record of when/what you faxed), and don’t be bullied!

  9. 9
    Aryn Says:

    That happened to us with our auto insurance, and the bank solved the whole thing for us. It was the most amazing thing. The insurance co. wasn’t helpful, so I called the bank. While I was on the line, they called the insurance, spoke to a customer service rep, explained that I had paid, faxed over the proof, and had them remove the late fee and reinstate our insurance. Once the rep was talking to the bank and not to me, she was much more helpful.

  10. 10
    Eric Says:

    What complicated our bank’s billpay was two things — first, on two occasions they had to reinstate my transactions due to a “loss of data incident” through their backup system. But it missed a transaction on each occasion, which prompted me to start recording the comfirmation numbers for each of my transactions (and almost caused me to change banks!) Second, and this is very sneaky — the bank takes the money out of my account on the day the check is mailed, not when it is cleared, so there is no way to know if/when the check actually clears unless you call the bank and speak with the internet banking dept. I believe this gives the bank a 2-7 day loan on my money, which I made clear I was vey unhappy about. Apparantly many others were too, since my bank has gone to another, much better, online billpay program.

  11. 11
    jay Says:

    There were many reasons we went with a third party BIll Pay service, and Eric, yours is one of them! All our bank sees are either EFTs or paper checks (for which we then have the scanned images). I can’t imagine my bank doing what Aryn’s did!
    I’m thinking CC payments are really the way to go, especially if you use ING or similar, where you can see payments posted within minutes. I don’t know, though, what success people have had with ING dealing with credit card fraud, etc.

  12. 12
    Van girl Says:

    I don’t currently use online banking and have no experience so this may seem a stupid point, but wouldn’t it be possible to get a receipt that you can save or print out each time you make a payment online? Or aren’t such features currently available. I purchase quite a lot of items on line through websites and each time I make a payment I get get the option of printing a record of my payment.

  13. 13
    nickel Says:

    You could take a screenshot or something, I guess. However, the only thing that a vendor will pay any attention to in terms of proof of payment will be a cancelled check.

  14. 14
    Jim Says:

    The title of this post says Bill Pay error – sorry but this is not a bill pay error. This could have happened if you’d sat down, written out a check, licked a stamp and mailed it in… I have paid my bills electronically for over 15 years without an issue.

  15. 15
    nickel Says:

    Jim: Hmmmm… I used online bill pay and there was an error. While it’s always possible that there could’ve been a problem mailing a check in myself, it would’ve been accompanied by the payment stub making such an error far less likely

    Was this the bank’s fault? No, and I said as much. But it’s still an error that happened in conjunction with paying a bill online. Just because you’ve never had a problem doesn’t mean that they can’t happen.

  16. 16
    joann davis Says:

    when i go on my bank of america bill pay accounts i can’t make a payment because the accounts keep jumping to the top of the page. I am using safari. please help. it starts as soon as i put in a payment amount. the computer jumps to the top of the page and will not let me scroll

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