Posts
B of A is putting its so-called zombie accounts out of their misery. The lending giant will no longer revive closed accounts when it gets electronic debits or credits associated with them; a practice that often generates unnecessary charges.
Saying goodbye to zombie accounts
Bank of America announced last week that it will no longer be reviving accounts that have been formerly closed and, by some error or oversight, continue to receive electronic transactions.
Consumers Union did a report in May where it said that banks should not do the practice, since it makes it much harder for customers to switch banks. This was when the term "zombie account" was termed.
There are a lot of unpredicted fines and maintenance fees that show up and can add to hundreds of dollars when a dead account is opened up. Bank of America will not be doing it anymore, but it and Chase were the only two large banks that still did it, according to Customers Union.
Consumers should be diligent
The issue happens when customers are not switching banks properly, according to B of A spokeswoman Betty Riess:
"As always, we remind customers to allow time for outstanding items to clear the account, and make changes to automatic payments and credits before closing the account."
A lot of customers wanted to switch banks when they found out Bank of America was going to be charging debit card charges, but a lot of them didn't. in fact, 20 percent of Americans wanted to switch banks in the last year, according to Consumer Reports. The problem is that 63 percent of them had to deal with the issue of transferring electronic payments, and that was too hard for many people to deal with.
Just the tip of the iceberg
According to Consumers Union staff lawyer Suzanne Martindale, the step is good, but there is more out there:
"While this is a welcomed change in policy, consumers at Bank of America and other banks continue to face a myriad of obstacles that can make switching to a new financial institution a time-consuming mess. That's why we need Congress and the Consumer Financial Protection Bureau to enact reforms that make it easier for consumers to move their money."
To be able to make it easier for customers to switch banks, the CFPB is considering brand new policies for banks. This might contain adoption of portable account numbers that can transfer between banks, prohibiting unfair penalties and reducing check hold times.
Saying goodbye to zombie accounts
Bank of America announced last week that it will no longer be reviving accounts that have been formerly closed and, by some error or oversight, continue to receive electronic transactions.
Consumers Union did a report in May where it said that banks should not do the practice, since it makes it much harder for customers to switch banks. This was when the term "zombie account" was termed.
There are a lot of unpredicted fines and maintenance fees that show up and can add to hundreds of dollars when a dead account is opened up. Bank of America will not be doing it anymore, but it and Chase were the only two large banks that still did it, according to Customers Union.
Consumers should be diligent
The issue happens when customers are not switching banks properly, according to B of A spokeswoman Betty Riess:
"As always, we remind customers to allow time for outstanding items to clear the account, and make changes to automatic payments and credits before closing the account."
A lot of customers wanted to switch banks when they found out Bank of America was going to be charging debit card charges, but a lot of them didn't. in fact, 20 percent of Americans wanted to switch banks in the last year, according to Consumer Reports. The problem is that 63 percent of them had to deal with the issue of transferring electronic payments, and that was too hard for many people to deal with.
Just the tip of the iceberg
According to Consumers Union staff lawyer Suzanne Martindale, the step is good, but there is more out there:
"While this is a welcomed change in policy, consumers at Bank of America and other banks continue to face a myriad of obstacles that can make switching to a new financial institution a time-consuming mess. That's why we need Congress and the Consumer Financial Protection Bureau to enact reforms that make it easier for consumers to move their money."
To be able to make it easier for customers to switch banks, the CFPB is considering brand new policies for banks. This might contain adoption of portable account numbers that can transfer between banks, prohibiting unfair penalties and reducing check hold times.
No comments:
Post a Comment