Problems you may experience with authorizing an automatic deduction.

Automatic deductions (debits) from bank accounts can be a convenient way to pay some regular bills, saving you time, checks, and postage. Nowadays people pre-authorize monthly debits for everything from mortgages, student loans, and utilities to car payments, life insurance premiums, and health club memberships. But you can get into trouble if your automatic payment goes awry.

And what if payments aren't made at all? One man whose life insurance premium was deducted monthly from his checking account had no idea that the bank, due to a systems error, had stopped making payments. The policy lapsed, but the family didn't find out until the man died. They had to fight hard to collect their benefits.

Fraudulent telemarketers have caught on to automatic debiting, too. After finding out your checking account number, a scammer can submit a "demand draft" to your bank, which doesn't require a signature. To reduce this type of fraud, a federal law requires a telemarketer to obtain a customer's authorization, in writing or on tape, before debiting an account. Never give out your bank account number over the phone.

Under federal law, you must call or write your financial institution requesting a "stop" at least three business days before the scheduled debit. If you make an oral request, the bank may require you to confirm it in writing within 14 days of your call.