Can a company increase the amount of an automatic monthly withdrawal without your permission or any notice?

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Can a company increase the amount of an automatic monthly withdrawal without your permission or any notice?

I bought health insurance and sent a check for $157 for my premium, but they took a direct deposit of $159 instead. Then I get a letter telling me that my premium jumped 50% higher because of prior chiropractic appointments and the use of ammoxcocillan for clearing acne. Today I see in my bank account they took out $121.90. That’s not half of my previous premium. Can they legally take money from my account without me knowing exactly what it was. I could understand if it was the same amount, but its clearly not. And if I write them a check, shouldn’t they accept the amount, and not take extra?

Asked on October 6, 2010 under Business Law, California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

You need to look at your contract with the health insurer.  Yes, you signed a contract and the terms of the contract are spelled out in the document.  What I am guessing is that they have the ability to take more should their costs go up in insuring you.  There is probably some language in the contract about this.  Or maybe not.  If you contracted for set premiums that do not fluctuate then you need to clear this up as well.  Read the documents carefully then call the broker with whom you placed the policy for clarification.  If you are not satisfied then I would contact the state Department of Insurance and speak with someone about filing a complaint.  Complaints are taken seriously and you will indeed get some inquiry in to the matter. Good luck. 


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