Automatic Clearing House System Fees – What Are They, How Banks Use Them For Their Own Gain, And Simple Steps On How To Avoid Paying For Them
With the growing interconnectedness of the world that we live in, everybody is somewhat connected with each other one way or another.
One of the best examples of how entangled we are to each other is the financial transactions that we do every day.
From doing a quick fund transfer to a friend in need or just paying your bills online, everything happens under the guise of a system that supervises and facilitates every transaction taking place.
However, have you ever wondered what makes financial transactions and services fast and efficient? You have got to thank the Automatic Clearing House system for making it possible.
What is the Automatic Clearing House system?
The Automatic (or Automated) Clearing House (ACH) is a computer-based electronic system (e-system) used for the processing of financial transactions in the United States that usually fall under the category of interinstitutional domestic low-value payments.
Experts and financial analysts agree that it plays an important role as the backbone for the electronic movement of money and financial data in the country.
The ACH system may support both direct debits and credits financial transfers.
It is run by the National Automated Clearing House Association (NACHA), the institution responsible for managing the development, administration, and governance of the ACH Network. Founded in 1974, the NACHA governs various member banks and other financial institutions in the country.
Transfers facilitated under the Automatic Clearing House or ACH system are charged for inexpensive (sometimes even free) transaction fees, and it usually depends on how much banks would charge each transaction.
Nevertheless, issues and allegations have plagued several banking institutions for allegedly misleading and tricking the clients of their ACH system transactions.
The ACH is a very complicated system, and trying to explain it here fully would warrant its own dedicated full feature.
Some Banks Are Being Shady When It Comes To The ACH System
It is no secret that some banks are not entirely truthful of how it uses the ACH system to process all of their financial transactions.
It is highly likely that you have been charged by your bank whenever you make an amount transfer to another bank.
Almost everybody has experienced this. Some might find it a small inconvenience, but they think it is the price to pay for a smooth and seamless transaction.
Yet, did you know that there is a way that you can avoid paying these fees?
But you may not have known it until now because of the sheer complexity and gargantuan size of the ACH system – and banks are taking full advantage of customer obliviousness.
One of the latest news surrounding this involves Bank of America for allegedly failing to inform its banking clients that they can avoid getting charged for doing a transaction under the ACH system.
According to reports, complainants argued that Bank of America could have told them that they could avoid paying for ACH system charges if they pulled out their funds from the bank instead of pushing them into another account registered in a different bank.
Simple Steps To Avoid Paying Up ACH Fees
The best way to combat paying ACH fees is by informing yourself.
Ask a representative from your bank to know their policies regarding interbank transfers that fall under the ACH system. If you want to give money to someone, you can ask them to pull the funds from your account.
Another step that you can take is setting up a recurring payments scheme for your bills.
There are no fees usually involved in this process but keep in mind that sometimes you might have to pay a fee for making a one-time expedited payment.
You can also consider using different financial services and products available to you that do not charge a fee for transfers.
Though most transactions they offer are free-of-charge, different terms and conditions apply ergo customer discretion is advised.
We here at Consider The Consumer believe that every banking client has a right to know their rights.
If you believe that you have fallen victim to your bank’s deceptive ACH system transaction policies, do not hesitate to reach out to us via our official communication channel below.
Editor’s Note on Automatic Clearing House Scam:
This article aims to give you almost every bit of essential information you should know about the Automatic Clearing House System to keep informed of your basic rights as a banking client and everyday consumer.
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