Bank of America's Negligence Pays Off Yet Again!
Bank of America, I discovered through personal experience and subsequent investigation, is exceptionally lax in verifying the identity of people going to teller windows to get money out. For those who haven't been around here for long, Bank of America, on SEVEN separate occasions, gave a total of $12,000 of my money to thieves with ONLY a fake driver's license in my name and the wrong expiration date.
No bankcard was demanded, no PIN was required, no signature was checked? Why not? Probably because, as I learned in my investigation, many of these banks they bought and merged with are not connected by one computer system. It seems they don't check...because, most appallingly, they can't check. As for why this is their practice, I spoke to yet another IT guy last night who told me what the other IT guys have: That it's exceptionally expensive to connect bank computer systems, and cheaper to just cross one's fingers that the thieves don't know that it's impossible to actually verify customer identity.
Perhaps B of A's computer's been connected since my investigation -- in Summer and Fall of 2009 -- an extremely expensive proposition, but one I believe they owe their customers, considering how they brag about their "multiple layers of security." Hah.
Ken Lewis, the head of B of A, and his enablers, customer "service" VP Nereida Claudius and spokepiece Betty Reiss, know very well about what I went through at the bank, and the substantial danger B of A customers seem to be in for identity theft thanks to what appears to be the bank's spectacular laxness in doing their fiduciary duty to guard their customers' money and identity. Yet, their response: to fire me as a customer for complaining a little too bitterly that they advertise substantial security but do not provide it, allowing thieves with one of the most counterfeitable items, a driver's license, to walk out with thousands of my dollars, in cash, totally off-pattern for me (I almost never take out more than a few hundred dollars, and almost always from the same ATMs within miles of my house, not in places in Texas or the middle of California that I've never been.)
Meanwhile, more of the the banks disgusting sloppiness -- this time, in investing in Merrill Lynch -- is now on center stage. And true to pattern, you and I are again paying the price.
I have a complaint in at the Comptroller of the Currency. A complaint they've been really tardy in addressing. I wanted to see the bank fined (of course, that would now be us being fined) and I want them to either change their business practices or advertise honestly the actual level of their "security" and let their customers decide for themselves whether they want to bank at an establishment that shows so little care in verifying customer identity.
Meanwhile, here from CNN is the latest on how we're all paying for B of A's laxness, in a story by David Goldman, Tami Luhby and Grace Wong:
NEW YORK (CNNMoney.com) -- Bank of America has received another $20 billion from the federal government's bailout fund, along with guarantees on $118 billion of assets at the bank, to absorb its recent purchase of the ailing Merrill Lynch....The bailout deal also provides a $118 billion backstop from the Fed in case of "unusually large losses" on assets backed by real-estate loans, most of which are being absorbed by Bank of America in its buyout of brokerage house Merrill Lynch. Bank of America will pay 3.7% of those assets as a fee for the backstop, and is responsible for the first $10 billion of losses and 10% of the remaining losses.
According to Ken Lewis, Bank of America's chief executive, Bank of America realized soon after its merger deal with Merrill Lynch in mid-September that Merrill's losses were accelerating beyond expectations. In December, the bank discovered Merrill's asset deterioration was "much, much higher" than anyone had forecast.
But when the bank considered renegotiating the deal, the Treasury Department intervened.
"As we saw the anticipated loss accelerating, we reevaluated our rights under the deal," Lewis said on a conference call with investors. "The government was under the view that walking away would cause significant concerns and serious systemic harm to the financial markets."
Lewis said the government's response led to considerable uncertainty about its next steps, but in the end, he concluded that sticking with the deal would best benefit the national economy.
"We did think we were doing the right thing for the country," Lewis said.
Oh, did you? Like you were doing "the right thing" for customers like me by cheaping out on security? Like you're doing "the right thing" by taxpayers like those commenting on this blog by sucking us dry for your bad business decisions? I live very frugally, and I'm hurting (papers have gone out of business right and left) because of the actions of speculating scumbags like you and your high-living cronies, Ken Lewis. You're a rich man. How about apologizing for the bad business decisions at Bank of America by putting your money where your mouth is?
Is there one financial "whiz" out there who has responded to his business failings by taking any sort of personal responsibility for them? I see only the French guy, who felt so terrible that he killed himself. I don't like to see that happen, but at least he seemed to have a sense of honor.
Hello. Me again. I can agree with the B of A IT guys that it IS extremely expensive to convert new acquisitions to a central system. But geez. Come on. I work for a company that has bought many banks in different states (although we're nowhere near BofA's asset size) and we ALWAYS convert them to our system. We also have a fraud department that monitors customer accounts for exactly the type of information that you described above...dollar amounts/locations are not consistent with each individual customers habits. If a customer kicks out, they will monitor the situation and investigate if necessary. I know you are a world-traveler, but I would seriously consider moving your daily account to a community bank and keeping a small B of A (or other huge bank) account open for when you will be traveling. Just transfer enough money for your trip and don't worry about it. Many of the small community banks have the amenities that most customers are looking for - personal customer service, knowing the customer by name, online banking, billpay, wires, etc. I am a little biased, but being more than a number is still important to me.
bankgirl at January 16, 2009 1:37 PM
Thanks so much, bankgirl, for your comment. So...this is as outrageous as it seems to me to be, right? How do they get away with this? Why do you think the Comptroller feels they can just sit on this. I made it clear numerous times that this isn't some issue I have; that I got my money back; that it's everyone else I'm worried about (vis a vis what I discovered in my investigation).
I also reported them to the House Finance committee, Senate Banking committee, the FBI, and Cal. Atty. General Jerry Brown. Nothing from any of them.
And Propublica, who I pitched the story to (met with Steven Engelberg, their managing ed) was doing a story on what I found out and mucked it up. (I wanted them to do the story, not me -- I was just showing them my info.) The Propublica reporter did sit-on-your-ass-across-the-country reporting, when it's a California story, and he needed to come here and talk to California tellers. Nobody is going to tell you privileged info over the phone. Duh.
Amy Alkon at January 16, 2009 1:52 PM
I found this blog by doing a search for "getting Bank of America to refund fees" and I am astounded that no one has sued them yet. If anyone starts a class action please contact me.
I started noticing huge amounts of NSF fees a couple of months ago. Accidents happen and I've had a NSF here and there, but hundreds of dollars?
It seems that BoA changed their policies on pending debits and deposits. Charges and checks are reordered from biggest to smallest to maximize their charges.The balance will appear to be positive, but because of the way they sort pending transactions and hold deposits it won't be. They make your deposit available, but it's still pending. So then, as a "courtesy", they will allow a debit to go through on what you think is a positive balance, and then nail the account for a $35 NSF that shows up days later. Which in turn puts your balance off and racks up more fees. It's impossible to balance your account carefully, which is clearly their goal.
I recently signed up for Mint.com and today I saw that between December 1st and today I have been charged $1311.00 in fees. Yes, over one thousand dollars in thirty days.
I used the online chat support and asked for a refund of at least 1/2 of those fees. The initial CS person I spoke with was Nathaniel. He told me there was nothing he could do and transferred me to his manager. I can't spell her name but she was rude. She told me that every fee was my fault and even when pointed out discrepancies she refused to listen. In one case I had $572 as a balnce. A check was cashed at a BoA location for $500, but later BoA said that I didn't have those funds available and charged a fee. Since when does a bank cash a check if the check is no good?
I asked to speak to the manager's supervisor SEVEN times. She refused every single time and got more and more rude.
I ended the chat, started my Google search, and called Executive Customer Relations general line: 704-386-5687 and finally got some help. Even that was grudgingly but the lady I spoke with (Amanda I believe) did refund $500 in fees which are supposed to be showing on my account by close of business today. She even questioned why the $500 check was cashed if those funds weren't in the account, but then turned around a few minutes later and told me that every NSF fee was my fault.
I watch my onlinebanking like a hawk. I have alerts set up, I check every morning and again at night. I have seen my register there show transactions in one order, showing me with a positive balance and then within a couple of hours be changed so that any debits are paid or denied prior to deposits and then fees for each debit are charged. Also, they allow personal acconts to have $500 per day in NSF fees. That is insane. I asked for a cap and was refused that altogether.
I'm still out about $400 in fees that weren't my fault, but it's better than nothing at this point. I will be bank shopping though and in the meantime I won't touch any deposit amount until I see that it has been 100% applied to my account. Pending deopists but that are available for use? No more. That's just a complete scam for BoA to charge more fees. Don't make my money available if it really isn't.
They are outright thieves.
Shannon at January 16, 2009 2:09 PM
This is how B of A recently messed up massively in my life: I lost a job and missed two payments. They did research, using a mistranscribed social security number, determined that I was 50 years older than I am, lived on the opposite coast, and had been dead for a decade (I had opened the account about 5 years ago). They then gave my account to an estate collection agency, who called my family and friends telling them I was dead. However, when my family asked for more info, the phone operators gave the info about this other older woman who’d been dead since the 90’s. When I finally figured everything out (getting calls from concerned relatives), I realized that back when I very first started my account that they had gotten my social security number wrong (and yes this was in California, where your problems have all happened). Despite the fact that I was paying an extra fee for some sort of identity theft protection, they didn’t pick up on the fact that every part of my filled out application and the social security number that they had didn’t match up, or the fact the person’s whose number I was using was already dead. Wow.
Here’s the sad thing, through the estate agency, since they thought it was for a dead person, I would only have to pay 75% of the debt, and it doesn’t accrue interest. I doubt I’m going to get that deal with B of A.
I haven’t called B of A yet, I’m saving my energy for that massive amount of bullshit I’m sure I’m going to have to deal with to get everything sorted out. I mean yes, missing payments isn’t good, but they really couldn’t have been any stupider with this.
Stacy at January 16, 2009 4:36 PM
B&A, 5/3, and US bank are notorious for doing this type of crap w/ the fees. I can't tell you how many times I've had it happen to me. After a year of fighting w/ them, I did *Finally* manage to get my money back.
I had a very similar situation to Amy's happen to me @ National City. Some *unt friend of my dorm roommate stole my checkbook and walked into my bank, where they knew my name, and forged the checks- in front of the teller and she cashed them. Not just once, but three separate times. The *unt was able to do this even AFTER my checks had been reported stolen and National City had the police report on file.
I use a credit union now and I've not had one single problem and the interest rates I'm paid are BETTER than any bank.
Truth at January 16, 2009 4:56 PM
Try using a Canadian bank (like President's Choice online). Apparently they adhere to certain antique standards which involve collateral, etc. I'm not sure if you can if you live in the US.
Chrissy at January 16, 2009 6:00 PM
I used to answer the OCC complaints that customers filed against the bank I worked for. We only had a certain amount of time to answer, I think it was 30 days. The bank was allowed to ask for an extension if they needed more time. I don't know what the consequences for the bank were if I didn't answer in a timely manner. I always answered on time because I valued my job. I would try calling the OCC Customer Assistance Group directly. You might also file a complaint with the Federal Reserve. They always seemed more attentive about complaints than the OCC or the state banking departments.
As for the fee structuring, all of the large banks do it. It is allowed because it is in the deposit agreement that you got when you opened your account. However, that does not make it right, and the only way it will be changed is either legislatively (which is not very likely) or judicially through a lawsuit.
Amy K. at January 16, 2009 7:02 PM
Jeeze frigging louise - can these banks not learn. John's Rule of Business #1 - Do not piss off the customer.
I like other people if in Canada, US or Australia - get a bank that is on the smaller side. Because in the end BIG BANKS do not make money with the regular joe blow - lower or middle class customer. Maybe that is why B of A is doing the shennigans with NSF charges. Maximize profits. Yet in doing so they break Johns first rule of business.
John Paulson at January 16, 2009 7:11 PM
Amy Alkon
http://www.advicegoddess.com/archives/2009/01/16/bank_of_america_6.html#comment-1621280">comment from Amy K.Thanks so much, Amy. I just filed a complaint with the Federal Reserve -- about both the Comptroller and BofA.
My complaint with the Comptroller I mailed on September 22, 2008. The case apparently went to the bank October 2, 2008. It's now January 16, 2008.
I got some bullshit letter from the OCC -- dated December 1 and 2 (they sent me three of the same form letter). It says within, "We would like to thank you for bringing this matter to our attention. Your comments and concerns will be forwarded to our examiners as they go about their regularly scheduled examinations of the bank. This information is critically important to the OCC as we strive for a safe and sound national banking system."
I was just on Mark Germain's show on talkradioone.com (he was formerly Mr. KABC), and I talked about what I found out about B of A. People need to know about this so they can decide whether they're willing to risk identity theft from a bank which does not provide the minimum security I would think most people expect from a bank. The fact that they advertise themselves to be secure is appalling, given the reality I experienced. SEVEN TIMES. This suggests it is not a teller with a hangover, but procedure, connected to the banks not being connected by a computer system, per what the B of A employee told me is true at least at California banks (being on a separate computer system than the rest of the country), and what my investigation suggests was or is true of many B of A branches across the country. Basically, it seems many tellers just have to...HOPE it's you taking out your money. All that signature card stuff and bankcard/PIN rigamarole that makes you feel so safe...if what happened to me, and Chris Hooley (another victim) and others is true...well, a lot of that is just for show. Security theater, as Bruce Schneier would say.
At the very least, customers of Bank of America have a right to know.
Amy Alkon at January 16, 2009 10:27 PM
This was on my BoA account statement today:
Important Information for Your Account
Effective 2/9/09, we are changing the Overdraft Item Fee and the NSF: Returned Item Fee. The fee is $35 for each overdraft or returned item. However, you will be charged for no more than 10 items per day. Bank of America offers services to help you minimize or prevent fees. Sign up for Overdraft Protection service to transfer available funds from your Bank of America credit card or savings account to help cover checking overdrafts. To learn more, talk with an associate at your local banking center or call the customer service number listed.
They will be charging customers $350 per day for overdrafts. Most of which are wrongly charged. Can you imagine how hard it would be for the average person to recover from that?
Shannon at January 21, 2009 10:33 AM
Amy Alkon
http://www.advicegoddess.com/archives/2009/01/16/bank_of_america_6.html#comment-1622267">comment from ShannonI'm guessing they don't include information in that packet on how you can be victimized through the "security" measures I experienced.
Amy Alkon at January 21, 2009 10:44 AM
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