Is it legal to withdraw online payments without notifying the consumer?

Just as a data point, this is a very common way that utilities (when you have the meter at your house) are managed. You pay an estimated amount per month, which is adjusted (either historically or more commonly going forward) based on regular readings. I'll echo what others have said about checking your original withdrawl agreement. Since you had it as "set it and forget it," I can't imagine they would do it any other way. For this like gas, electic, water, etc., the amount changes every single month (as you noted). I'd write this up to a lesson learned.

Are you disputing the actual meter reading and the bill or just the method of collection? If you really owe them the money, I would ask them for any bank fees incurred because of an overdraft, but otherwise, demanding your money back and then giving it right back to them (or stiffing them) seems like a colossal waste of time.

The answer to this question is no, unless you told them it was OK. You likely told them it was OK to withdraw money from our account without telling you when you signed up with them, I'd double check that before moving forward.

You can certainly appeal the meter reading. Call your gas company's customer service line. But I don't see what other recourse you would have; you approved automatic bill payment via authorized withdrawals from your bank account, and they withdrew money to pay your bill. The bill was way higher than usual, and you haven't established that it's correct (and perhaps you think it's incorrect), but you authorized them to pay your bill each month, not to pay your bill for some particular amount. (I also live in Massachusetts; my gas [and electric] provider is NSTAR, and they have been mistaken on our meter readings, but were quick to re-check and issue us a refund once they confirmed the error.)

The company has no doubt included on the forms you signed, and on its web site, notice to customers that billings are sometimes sent based on estimated rather than actual usage. My supplier has an "E" notation to tell me when the figures it used are estimates. The big hit has no doubt disrupted your household budget, but the fact is that you used the gas and you have to pay for it. That means there is no legal basis for challenging the charge.

When making e-payments on recurring bills, unless you see the magic words "one-time authorization" you should pretty much assume that the company's going to use what information they have on file for you to try to get money out of you whenever they think you owe it, and plan accordingly.

That means there is no legal basis for challenging the charge. You can always ask for a review and reassessment of a meter reading in Massachusetts. It may well be that the reading was accurate, but if it was off from the estimated by that much--in a winter when our gas bill has been less than half of its usual--something might be awry.

There are several things I pay with regular on-line payments and don't receive notification for...so, to answer that part of your question: yes, if you have agreed to automatic withdrawals from your account it is legal to make them without any further kind of notification (which is also why I don't have my utilities set up this way, although I do pay them on-line as one-time payments). However, it is certainly annoying in this case if you normally do receive the notification, and especially since it is a much larger than normal withdrawal. Annoying, but I doubt you have legal recourse.

Yes, as freejinn says, I have a number of automatic payments that go through every month, and they just go through, without notification. They do also email the bills to me, but just for my records, not as a warning that a payment is about to be processed.