Monday, April 14, 2014

If Something Changes, Be Very Careful.

Technology has given us amazing tools to manage the complexity of modern life. I am speaking, of course, of automatic bill-pay---no more stamps, envelopes, and cramping of a right hand that's no longer accustomed to writing checks, or handwriting anything, for that matter. The downside of technology is that there are new screw-ups to watch for.

I have a simple business which has its own bank account. The business has five automatic transactions per month--one cash receipt and four cash disbursements, all fixed amounts--that produce a surplus of $200. After the surplus is transferred out, the bank account keeps a few hundred dollars. The business was on auto-pilot.

One of the regular payments was for a loan. When Bank of America sold the loan to Nationstar, I changed the information on the bill-pay system. Unfortunately, the Nationstar payment was, I suppose, entered under both "recurring" and "one-time," so a double payment was made, resulting in an overdraft. (I am happy to say that this error never occurred when a payment could only be made by check.)

I voiced a minor complaint to Bank of America, which never responded. Yes, I probably bear some responsibility for not filling out the bill-pay instructions correctly. But it was the sale of their loan that did trigger the error, after all, and they made a tidy sum while inconveniencing me. Oh, well, I'll just keep this incident in mind when I'm looking for a bank to handle my next business opportunity.

But the important lesson is that auto-pilots are great when everything's normal. If something changes, be very careful.

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