06 Jan Can we be forced to make monthly payments by autopay?

Q. Our HOA in our 55-plus community is forcing us to join a clearing house so they can directly take our money out of our account. If we do not do it, they will charge us $10 more a month. Further, many of us are not keen on linking our banking accounts to a clearing house. We are afraid our accounts will be hacked.
— Owner

A. First, to make sure we’re all on the same page, a clearing house is a third party company that manages certain financial transactions, in this case, processing automatic debits from a bank account.

Can you be forced to participate?

You’re probably out of luck.

There are regulations that cover fees like the $10 you mentioned for loan repayments, but your HOA fee probably doesn’t qualify.

The provision covering loans, as explained by the Consumer Financial Protection Bureau, says: “A company cannot require you to repay a loan by automatic debit from your checking account as a condition for giving you a loan (unless the loan is an overdraft line of credit).”

For something like your HOA fee, because you’re not required to do it — as you noted, it will be more expensive if you don’t — it’s different because it’s not a condition of a loan.

We do understand your reluctance, though. Lots of people have complained about auto-payments they’ve been unable to stop, for example, when they tried to cancel a gym membership.

But for something like your HOA fee, as long as you make sure you have enough money in your account so you don’t end up with insufficient funds, you’ll probably be fine.

In terms of your worries about your information being hacked, we have seen all kinds of companies suffer data breaches. The best thing you can do is be proactive. Freeze your credit report so no one can open loans in your name. As you should already be doing, monitor your bank and credit accounts closely to make sure there are no unexpected transactions.

And if you’re really concerned about this specific bank account getting hacked, think about opening up a separate one to cover only this HOA fee. (It will be annoying to monitor an extra account, though, and to make sure it always has enough money to cover your monthly HOA fee.)

If you and other owners don’t like it, consider running to be on your HOA board, so then you have some power to change the policy in the future.

Email your questions to .

This story was originally published in January 2025.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.