> FWIW If you are worried this is just the honour system, which it is, be even more afraid of credit cards. Payment card settlement is entirely on the honour system and has fewer safeguards. Any merchant can present settlement paperwork saying card #123456789 agreed to pay me $8000 and your bank will by default take $8000 from the account #123456789 corresponds to.
They won't take money out of your bank account. They'll add $8000 to your credit card bill, and if you don't pay that bill they can report you to a credit bureau, cancel the card, take you to court, but you'll still have access to your money while it's all being sorted out. That's the argument for credit cards being safer.
I have a similar issue with my utility provider in London were the previous tenant didn't pay the bill and the wouldn't allow me to open a new contract on the same address until previous contract on that meter was paid.
They even went so far to send the same bills to 'occupiers of address X' trying to let me pay the £1800 electricity bill.
A utility company screwed my billing up at the last address I rented. I'd check my own meters, call up, "This bill is wrong, fix it" they'd send an engineer, the engineer says this happens a lot with a building converted from one dwelling with one meter to many dwellings with retro-fitted meters and then gutted and replaced outright with a purpose built block. They call base "You have the wrong meter for this address. Assign this meter number to the customer account instead". Next month, new bill, same mistake, same calls, rinse & repeat.
So I said "I will not pay you until you bill me for what I actually used". I called my bank, "Undo all direct debits for that utility" and they took all the money back from the utility company and gave it to me.
The utility company sent a letter threatened to sue me, I called the lawyers. They explained that the letters threatening to sue are automatic and that they understood if they show up with knowingly bogus bills they're going to lose and it'll make the judge really unhappy and they might get sanctioned as well as eating my court costs.
Eventually I'd guess maybe six months after I first noticed the error, I got a phone call from the utility company. They'd given up trying to "fix" my account, whatever stupid IT problem they had was too much. They'd opened a fresh account with my name, my address, the correct meter and a zero balance, was that OK? So I never paid them for six months of usage basically.
FWIW If you are worried this is just the honour system, which it is, be even more afraid of credit cards. Payment card settlement is entirely on the honour system and has fewer safeguards. Any merchant can present settlement paperwork saying card #123456789 agreed to pay me $8000 and your bank will by default take $8000 from the account #123456789 corresponds to.
Another HN discussion today is about EMV ("Chip and PIN") but EMV isn't part of Settlement, it's Authorisation. A merchant doesn't need any Authorisation, they can present a settlement demand with no authorisation whatsoever and by default it will get paid.
This really happens. Big merchants are 100% trusted, if the major high street supermarket chain Tesco in the UK says that every single one of its Visa card customers decided to pay twice today, no alarms go off until finally, hours or days later one of those customers wonders where all their money went and is horrified to discover Tesco took twice as much as expected. Oops! We pressed "up" too many times on the keyboard and ran the settlement process twice. No safeguards, because it's the honour system. Check your card statements, if you miss something nobody else will lift a finger.