yes, it's legal. Yes, it's a scam to pilfer people's cash without there permission. No, it isn't right.

However, it IS legal, much like the credit card company who sends a notice that your interest will increase unless you "opt out". However, as soon as you use the card, that's considered permission to institute the new rate increase. They don't close the account, just hoping someone slips up and uses that card.

Here in the county our prior administrator, who was a crook anyway, I'm sure, although we could never prove it, was always doing something like that. The last time was one of those "we'll take a vote and if the majority wants to do it, the money comes out of everyone's check" deals. Fortunately, one of the people who DIDN'T want it was one of my lawyers on staff, who kindly pointed out to Admin that it was illegal to take money out of our checks without permission. Admin disagreed, got an independent legal opinion. Yup, it was illegal. Pah.

So now they just sneak it in on you, apparently using the theory that's it's easier to apologize than it is to get permission...

Annie

I think I'll start looking closer at my bank statement. Not that I don't already, but you've alerted us to just one more way for banks to make money. How else are they going to pay us back all that money that we loaned them with the bail out?

Sally

Our bank tried something like that. They were pushing to collect $9.99 a month from me to protect our identity. The next time I went to the bank I had a talk with the manager. I pointed out to her it was already there job to protect our identity and our information and ash if they would do a better job if I paid extra for it. She didnÂt answer so I told her it reminded me of the old days when shop owners paid the mob for protection. Plain and simple extortion and if I had to pay extra for protection maybe I should look for a more secure bank. Poor thing was left speechless and assured me that our identity was protected just as well as people who signed up for the plan. I also had them stop sending anything to my house except the monthly statements and said if I wanted anything else I would call them.

Claudia

Wow, isn't this timely! I'm not sure if my parents have fallen victim or not, but today they got a certificate of insurance for buyer's protection plan from their bank for $12.99 a month for 12 months! Mom tried calling them to see who authorized it and got nowhere. I've faxed this thing to her banker for further clarification, but we're certainly not having it!

Interestingly enough, DH and I also bank there and have not seen or had a solicitation from them about it.

I just got one of those last month, and it was for $14, but it was for six months of identity protection. I was going to contest it, but I had my identity stolen, and someone was making charges to a shoe outlet in Bradford, England on my account. Since the bank didn't hold me liable, I thought it might be good to pay for the protection, since I have free checking. I'll have my sister look into it - she's a banking lawyer and this is her specialty. She goes to Washington every year to advise legislators on new banking laws, and she's very aware of the corruption in the banking industry.

As it turns out, there are a lot of cheap shoe stores in Bradford, England, but I don't buy cheap English shoes.

Lars

The reason these companies use "opt out" instead of "opt in" is that few people will "opt in" if given the chance. On the other hand, few people take action when given the opportunity to "opt out" too. So it is much more successful (from a business point to view) to take action and give people the opportunity to withdraw.

Actually, having to opt-out of participating in a 403(b) is a good thing. Most people do not save enough for retirement, or don't save anything at all. Often an employer will match your contribution up to a certain percentage, so by not participating you are leaving money on the table that could be yours.

However, you should be told clearly and in plain language that you have the option to opt-out. My employer makes it very easy to do so. However, if the new younger employees put even $25 a month into a retirement fund, it will have grown exponentially by the time they retire -- well, presuming the economy improves a bit! They will be grateful that they didn't opt-out.

As for the others,-- a pox on them! What a rotten thing to do and I will look more closely at my statements. I think this is a downside of paying on line. You are more apt to just pay and not look at the statement.

I do understand that by making people "opt out" rather than "sign up" they will have a higher pareticipation rate, albeit a shady way to get it, in my opinion.

I firmly believe that I should have to give my permission for anyone to withdraw my money from my account or my paycheck. No one should just be able to help themselves because they claim they sent you something and you didn't respond!

Linda

I'm very surprised at the insurance thing.

Not at all surprised at the 401(k) thing. Very common. Yes it's supposedly in the employee's interest, but it's also in the employer's interest. You set up a "salary reduction" agreement so from a corporate tax standpoint your contributions are considered employer contributions.

And if you don't like that, you'll hate this: At my wife's company once you reach a certain level a significant percentage (forget what) of your salary goes to some sort of a retirement savings plan. Mandatory, no opt out. If you need the money you can set up automatic withdrawals from the plan. They gross up the contribution 18% to offset the premature distribution penalties you'll incur should you take distributions, but still, it's a heck of a way to have to collect a paycheck, huh? On the flipside though if you can afford to leave the money in the plan then you've given yourself an automatic raise because of the gross up.

It just sucks that someone else feels they can make your decisions for you. Good or bad, right or wrong, I have the right to be in control of what little money I have!

Linda

It seems to be getting more common in all areas. The company DH works for was acquired by another company. We noticed that there was suddenly a fee every week of $2.50 for "employee services". We asked what those services are, and it turns out that it is to process payroll! He's paying the company a fee to get his wages.

Well that just ain't right! I think some employers are taking advantage of their employees knowing how bad the job market is.

Sally

A fee to get his wages? ÂÂÂ

I havenÂt worked for about 25 years but when I did I was HR and payroll director and unless the labor laws have changed it would be illegal to charge an employee to get his pay check. The law is pretty clear about compensation and how it must be paid. Call the state and federal labor board or look up the labor code in your state about wages and compensation. That really sounds fishy!

Claudia

Hi Claudia. Yeah, I did call the state labor board. They sent me to the federal board since DH's job crosses state boundaries. The feds say it is completely legal. And they can't even claim that it's for printing and mailing out checks because they are required to use direct deposit.