We support reforms to the financial marketplace to curb bad practices by banks and lenders.
By: Christina Tetreault
After closing his checking account at Fifth Third, a consumer in New York was dismayed to find not only had the bank re-opened his account when a post-closure transaction hit, but Taylor McKinley’s ex-bank hit him with a string of fees totaling $438.35, according to the Huffington Post.
The most shocking thing about this? Banks can – and obviously do - re-open closed accounts. These involuntarily re-opened accounts are sometimes called zombie accounts by their consumer victims. For some banks, creating zombie accounts is their policy. For example, Bank of America reserves the right to re-open closed accounts, apparently indefinitely.
In Taylor’s case, it wasn’t bank policy, just a mistake. But that doesn’t mean it wasn’t a hassle. Taylor had to take time off work to resolve the dispute.
Has this happened to you? Consumers Union is tracking abusive banking practices and fees. Look for our monthly Bank Alert! And please tell us if you have had a bad experience with moving your money by emailing money@consumersunion.
Another excellent reason to NEVER do business with Bank of America.
Went to BoA with my mom finally. The rep said the account has been sent off to another department that handles collection/write-off of accounts that’s been closed due to negative balance. She said she will send a note to that department to indicate that the amount supposedly owed (maintenance fee) should be whipped out. She then printed out another sheet indicating (again) that the account is closed and the trumped up maintenance fee should be erased.
She said the reason the account reopened was that the rep who closed the account in the first place did not close it totally. There was some interest left over that created a positive balance ($2.47). So the account came back alive. Then the maintenance fee started adding up and after 3 months the positive $2.47 became negative ~$12.55 and going.
Which brings me to my point…Why didn’t they just send my mom a check for the interest that was owed to her in the first place? Instead they decide to re-open the account, wipe-out the $2.47 that’s owed to my mom by charging her $5 maintenance fee every month on that zombie account. Then force her to come back to the bank to deal with it. Then while we were in the bank they keep trying to convince her and I to come back! (well played). If the customer don’t or couldn’t comeback then they sell these trumped up charges to the collection agency (like they did to my brother). A win win for good old BoA Execs!! So again if they can wipe out these left over interests (owed to customers) by doing this for say 500,000 accounts that’s $1,235,000 to as much as maybe 10 million dollars (depending on how many accounts and how much left over interests were left over.) Millions more for their bonuses. Bad business practice. Shame on them.