Mesa, AZ · Member since 2015 · 74 posts · 47 votes
I used one of these online companies that run background checks and collect rent from tenants. I won't reveal which one - but suffice it to say there are many posts about this company on these forums.
No matter how 'hard' it may be to collect a physical check from a tenant, I'll never use one of these online services again for one simple reason ACH transactions are VERY simple for a tenant to have their bank reverse - leaving you holding the bag. I realize its not the 3rd party's 'fault' but the function of the ACH transfer makes it too easy to get burned.
Just my Two Cents for anyone out there thinking about using one.
Flipper/Rehabber · San Francisco · Member since 2014 · 124 posts · 49 votes
9y
Every one of my tenants and SF buyers transfer me money via ACH. Did you end up with a lot of fees? How long after the transfer was it "revoked"? Seems pretty secure to me unless a tenant decides he doesn't want to pay his rent this month, which only saves his a few days. A check could bounce in the same way.
Flipper/Rehabber · San Francisco · Member since 2014 · 124 posts · 49 votes
9y
Every one of my tenants and SF buyers transfer me money via ACH. Did you end up with a lot of fees? How long after the transfer was it "revoked"? Seems pretty secure to me unless a tenant decides he doesn't want to pay his rent this month, which only saves his a few days. A check could bounce in the same way.
Mesa, AZ · Member since 2015 · 74 posts · 47 votes
9y
The ACH deposit was pulled back 19 days after it hit my account (which was the 24th of the month). I confronted the tenant about why she had her bank pull back the transfer and during our heated conversation she claimed her bank gave her the option to pull back ALL of her transactions which would have been the deposit and 3 months rents! Luckily she didn't opt to do that. She ended up living in my home rent-free for one month (also didn't pay her utility bills) before moving out as I gently told her she needed to move along. My only saving grace was that I got a full month's rent deposit from her which she'll obviously never see.
Johnson City, TN · Member since 2014 · 586 posts · 705 votes
9y
The moral to this story is that with ANY account that you have money drafted from, or receive payments into, always keep a very small amount of money in that account. Ideally transfer the money into a different financial institution from that account. This negates their ability to double debit you or claw back the funds.
Real Estate Agent · Princeton, NJ · Member since 2016 · 1k+ posts · 1k+ votes
9y
Hunter Fitch I use PayPal or venmo immediately deposited into my rental bank account as a secondary method to the tenant directly depositing into a local branch bank account (like Wells Fargo). The tenant selects a friend to friend setting for a fee free ach. It's possible these could also be subject to the same claw backs... I'm not sure. It's never happened to me.
Maybe we all need to add paynearme to our toolbox too.
Thank you for the heads up. I'm really concerned that these 'helping' services can be overturned / clawed back so easily, especially 19-24 days later...
If more people have had this experience, please post it.