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PayHOA and security

Is it wise to give them a bank password

     
3:19 pm on Dec 9, 2018 (gmt 0)

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Hope this question is appropriate for this forum.

My community association is forcing community members to pay their monthly dues through a website called PayHOA, a cloud-based homeowner association management software for communicating with members, collecting dues, and tracking expenses..

PayHOA requires your bank password to start taking monthly deductions from a bank account. Should homeowners be concerned about giving PayHOA our bank account passwords?

Thank you.



[edited by: not2easy at 5:44 pm (utc) on Dec 9, 2018]
[edit reason] general ToS [/edit]

6:03 pm on Dec 9, 2018 (gmt 0)

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Should homeowners be concerned about giving PayHOA our bank account passwords?


although i've never heard of the company you mention, i'd be extremely concerned about giving anyone my bank password!

i'm in the uk and there are two ways you do this ... either by standing order, where you instruct your bank to make regular payments to someone/company ... or a direct debit mandate ... where you give permission for a company to deduct money from your bank account (this usually in the case where the billing amount varies) (personally i never give direct debit permissions to anyone.
i can't imagine it is any different in the usa.

alternativelythey can keep your debit card details on file and debit you when required.
7:00 pm on Dec 9, 2018 (gmt 0)

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I would hope they offer the alternative to let you schedule payments through your bank. When even the big accounts are known to be hit by loss of customer data, the bank information could be far more critical to lose than logins and card numbers.
7:15 pm on Dec 9, 2018 (gmt 0)

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That is a very bad idea. The right way to do this is some sort of authorisation procedure (possibly online) to authorise them to collect the money. This is how things like direct debits and recurring credit card payments are set up. Doing it any other way suggests they are either incompetent or cannot set up the authorisation procedure for some other reason.

I think you should ask your bank whether you should. I am pretty sure they will say no.

The problem is that if you have to pay the fees you may want to look at the legal position.
7:19 pm on Dec 9, 2018 (gmt 0)

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I've been paying the dues monthly automatically for a decade, never late, using my banks bill pay systerm. But the homeowner's recently took over the association and they don't want all the book work for collecting and keeping track of dues. Alternatively, they say I can use my charge card but I would have to do it every month.

I'm calling my bank tomorrow.

btw, we were at an association meeting yesterday and after it I asked the association attorney if the association could legally force me to pay using PayHOA . He refused to answer saying he represented the association and I need to get my own attorney to get the answer. Excuse me. He knows the answer and he should be able to tell association members when asked.
10:03 pm on Dec 9, 2018 (gmt 0)

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he represented the association and I need to get my own attorney to get the answer
What a fascinating admission. It implies that the HOA operates on the premise that they and you--i.e. the association and its members--are in an adversarial relationship with no interests in common.

Incidentally, what the heck is a bank account password? Iíve got a password that I use to access online banking, and a PIN to use my debit card, but thereís definitely no master password giving access to the whole account.
10:21 pm on Dec 9, 2018 (gmt 0)

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Incidentally, what the heck is a bank account password?


yes, i wasn't sure what was meant either, i assumed it was some kind of online login password (although my bank has a much more sophisticated system than a login password)

but the whole point is (all) passwords should ALWAYS be private, if you deliberately share them in any way, then i imagine you are totally liable for any losses that may be incurred through mis-use.
10:25 pm on Dec 9, 2018 (gmt 0)

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But the homeowner's recently took over the association and they don't want all the book work for collecting and keeping track of dues


quite honestly, i'd ask for a vote of no confidence in the management of the home owners association ... i've never heard anything so ridiculous!
10:55 pm on Dec 9, 2018 (gmt 0)

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The bank password, yes, is what I use to login to my bank account. Evidently others are doing so but I don't think they can force me. I'll calling my bank tomorrow and will let you know what they say.

I could be very wrong, but my guess is that the attorney didn't answer me because it is not legal for force people to use such a system. They've already had some glitches but, when asked, I was told it didn't effect many people and it was resolved.

For example, in April, the Board wrote (in an email!) "Our PayHOA platform has experienced an unfortunate error that we are working to resolve at this time." There were multiple charges deducted from some people's bank accounts."

This month they wrote: "It has been brought to our attention that some are experiencing issues in the PayHOA system. We have reached out to PayHOA is resolve the issue. As this is an online system and not one that we have control over, we appreciate your patience as these issues are worked through."

Doesn't engender much confidence, does it?!
11:21 pm on Dec 9, 2018 (gmt 0)

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As for the attorney situation, pretty straight forward, they represent the association and are unable to give you legal advice. HOAs are interesting beasts and it sounds like yours is having some serious issues.

Online banking password, not a chance I would ever do this. With that said, it could have been set up (in the by-laws) that the association has the right to inspect your finances to make sure you meet a requirement of residency. I've never personally anything like that is the wild but... HOAs are interesting beasts.
12:04 am on Dec 10, 2018 (gmt 0)

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Shepherd, after I contact my bank, I will ask the association if they have a legal right to force us to use PayHOA. I doubt it's in the association by-laws but that doesn't mean they can't put it in at a later date. I do understand their desire to cut down on paperwork, etc. but no way am I giving my password!

I've emailed PayHOA to find out if they require my bank password (login). It will be interesting what they say.
12:37 am on Dec 10, 2018 (gmt 0)

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What the association has a "legal right" to do is listed in the by-laws. You should have a copy of those by-laws and they should also be public record, recorded with your local recorder.

It is not uncommon for an association to use a third party company to collect/process payments. It is uncommon for that third party to require access to online banking to process payments.
8:47 am on Dec 10, 2018 (gmt 0)

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you should get a copy of all of your governing documents, including the articles of incorporation, the bylaws, the CC&Rs, and any other rules or policies that were decided upon after the originating documents were written.
normally you would have signed an acknowledgement that these documents were provided to you during the closing when you purchased.
find the relevant sections and study them.
typically any changes or additions to rules or policies would requires a period of public notice/comment.

there should also be some state laws that apply to HOAs or "planned unit developments" and the governing thereof.
in some cases these laws may supersede your governing documents.
included or separately there should also be laws governing public meetings and disclosure requirements that may apply in your jurisdiction.
10:05 am on Dec 10, 2018 (gmt 0)

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If they want your bank account password, they are really, really foolish and the legal advice they're getting is either entirely wrong, or they are avoiding the attorney's advice.
Imagine for one moment that your account is hacked - think about it - they might be the source of the hack, and you probably will get no support from the bank because you shared the password.

they don't want all the book work for collecting and keeping track of dues.

Amateurs!
10:06 am on Dec 10, 2018 (gmt 0)

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There is something badly wrong here. PayHOA's website says that you can set up recurring card payments and does not mention entering online banking passwords.
10:50 am on Dec 10, 2018 (gmt 0)

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There is something badly wrong here.

Phishing?
2:29 pm on Dec 10, 2018 (gmt 0)

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graeme_p - There is nothing wrong. Many community members are paying with their bank account!

Here's what someone posted this morning on our community bulletin board:

"Check your charges for this month. My PayHOA autopay has deleted four charges of $85 from my account so far. I disabled mine. But I am still dealing with the company to try to get it rectified. Itís the same debit every three days."
2:43 pm on Dec 10, 2018 (gmt 0)

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I don't give my bank account access details to anyone.
4:03 pm on Dec 10, 2018 (gmt 0)

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Online payments made from a bank require two elements: the account and routing numbers. It my 19 years of dealing with ecommerce, I have never heard of anyone asking for a password. And, in general, the reason bank drafts are preferred is that there are no processing fees deducted. However...

Unlike using a credit card, you have little recourse in getting your money back when you authorize a third party to automatically withdraw money. I refer to
Check your charges for this month. My PayHOA autopay has deleted four charges of $85 from my account so far. I disabled mine. But I am still dealing with the company to try to get it rectified. Itís the same debit every three days
In this example, you would probably have to provide your bank with your association's T&C for making withdrawals including frequency and amounts. In other words, you are giving up control of your account to the association. Remember, your bank is not subject to the T&C of your association and I do not believe can be forced to comply with it.

The only safe method when dealing with bank drafts is auto-pay through your bank where you dictate the frequency and amount. Without knowing your association's T&C, I personally do not understand how they can refuse this type of payment especially when it is made for the correct amount in a timely fashion.

And citing the example you provided, if your association causes your account to be overdrawn, you will be liable for bank service charges, not them.
5:04 pm on Dec 10, 2018 (gmt 0)

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Thank you everyone for your input. The association is going to have to work with me for another payment plan. I'm not going to sign up for PayHOA under any circumstances!
6:08 pm on Dec 10, 2018 (gmt 0)

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I hadn't heard of the company before, but checked out their web site. There are thousands of (legit) startups/new companies out there, so don't assume it's a scam just because it doesn't have a huge brand name. (But still do your due diligence.)

PayHOA requires your bank password
I can see the need for the routing number & account number of your checking account so they can do ACH transfers for payment. Or the option to pay via CC. (PayHOA lets the HOA decide whether to pass on the 2.9% processing charge to the residents or pay it themselves.)

More and more organizations are going to go to companies like this to automate their offline processes. In the future, you may still have the option to pay by check, but most likely will charge a handling fee.
11:22 am on Dec 11, 2018 (gmt 0)

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I can see the need for the routing number & account number of your checking account so they can do ACH transfers for payment.


But not the password!
 

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