Zip App With Assistance from Plaid uses Unscrupulous Methods to Obtain Payments

Zip and Plaid can be beneficial

Please be advised that Plaid, which integrates banking information, can be dangerous if you ever find that you don't have enough money to pay your debts. I recently discovered this through the Zip app.

I have used Zip three or four times over the past Spring and Summer. I found it a convenient method to purchase now and pay later, but it comes at a cost. This article is a warning to those who currently utilize the app and those who are considering it.

Apps like Zip, Dave, and Albert use Plaid, which connects all of your bank accounts. You don't have to give them the details; they access with your name and phone number, which is a bit invasive. If you have checking and savings accounts or more than one of each, once you accept their terms, they have access to all of them.

In the Spring of this past year, I helped out a family member who had been a blessing to me in the past. I allowed them to make a one-time payment on their Zip account with my debit card, which I now realize was a bad move.

No good deed goes unpunished

My relative notified me that he tried several times to remove my debit card from his account after the payment but was unable to. I called my bank and cancelled tht card and received a new one.

At the end of October, I was stunned when six Zip payments went through my primary checking account for $58.00 to $61.00 each. I had paid Zip the $15.00, I owed them for my pruchases which left me with a 0 balance, so I had no idea why this happened.

To make matters worse, because I did not have $240.00 in that account, the "system" automatically took the funds that were set aside for bills from my second checking account.

I contacted Zip and sent them copies of the transactions. They replied that I owed them nothing and gave no explanation. I filed a fraud complaint with my bank, which removed the charges while the case was pending.

The next day, I shared my saga with two people I know who use Zip. One of them was the relative whom I had allowed to use my old debit card. He told me that he had gotten behind on his Zip payments when his income decreased, but when he recently checked, he had a 0 balance.

When he heard my story, he realized that Zip had used my old debit card to get the money he owed. He called Zip and asked, but they refused to refund the money because he owed it. Ironically, he was able to finally remove my debit card, after six months but the damage was done.

Plaid and Zip can backfire

I acknowledge that I allowed my debit card to be used one time to help out a family member. I have had others do the same for me to pay bills after my husband died. There was never any problem with one-time payments, but Plaid had changed things. Still, I am not responsible for my relative's debt, and my bank's fraud investigation should prove that.

Some would say I never should have used my debit card. Those who have been in financial binds understand that you do what you have to do. At the time, this relative's account was overdrawn, and if I had put the money in his account, it would have been taken, and Zip would not have been paid.

However, neither I nor my relative gave consent or permitted the card to be used again and it was cancelled. I have a new one with a different number. Still, Zip was able to get into my checking accounts and take my money.

The bank said this was possible if I had given them my checking routing and account number but I had not. Today, two additional charges for $16.00 and $39.00 came through, so I have to file a fraud report to dispute them.

Be advised that when you use loan apps that Plaid gives them access to all of your accounts. If they can't get their money from one, they will try another. Any card attached, even someone else's, or one that has been cancelled can be zapped, so beware.

The system is set up like a predator that detects when a deposit has been made, and then they pounce on you. Technology is advancing every day and like most everything else in this world preys on the least of these.