Legal Questions

I agree with my colleagues. The insurance company cannot take money out of your account without your permission. The issue is your damages. You did owe the money for the premiums. In Illinois, you should file a complaint with the IL Department of Insurance, who has the authority to fine the insurance company for this improper conduct.

No company, including your insurance company, can automatically deduct payments from your bank account without your express permission. If you are unable to terminate this automatic deduction, you should contact your bank to inform them that this is not authorized. You might also wish to consider changing bank accounts if not also changing banks. Additionally, you can report this to the state licensing board for insurance (the exact name escapes me at the moment) as well as to contact the attorney general and the home office of the insurance card carrier.

The short answer is "no." Neither an insurance company nor any other vendor can unilaterally remove funds from your personal account without your permission. If this happens again, contact your state insurance commissioner's office and report that activity. Generally, that will get their attention.

This is likely a violation of the federal Electronic Funds Transfer Act. You have the right to sue for damages and attorney's fees under that statute if it was in fact violated. See a consumer law attorney for advice -- most will take good EFTA cases on a contingency basis.