B of A is putting its so-called zombie accounts out of their misery. The lending giant will no longer restore closed accounts when it receives electronic debits or credits relating to them; a practice that often generates unnecessary fees.
Zombie accounts remain deceased at BofA
Bank of America publicized last week that it will no longer be reviving accounts that have been formerly closed and, by some error or oversight, continue to get electronic transactions.
In May, a Consumers Union post pointed out the "zombie account" practice and said it should stop. It said that customers do not have the choice to switch accounts when these kinds of things happen.
There are a lot of unpredicted penalties and maintenance charges that show up and can add to hundreds of dollars when a deceased account is opened up. B of A will not be doing it anymore, but it and Chase were the only two large banks that still did it, according to Customers Union.
Issue due to consumers
The issue occurs when customers are not switching banks properly, according to Bank of America 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."
Last year, when Bank of America announced it would be charging fees for debit transactions, many American consumers had had enough, prompting them to switch banks. According to a recent release from Consumer Reports, 20 percent of American consumers believed about switch banks in the last year. However, 63 percent of them say they were daunted by issues such as how to deal with the transfer of electronic payments.
More to do
According to Customers Union staff lawyer Suzanne Martindale, the step is good, but there's 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."
Consumers Union has pressured Congress and the Consumer Financial Protection Bureau to consider certain policy changes to make switching banks an easier matter for customers. Among those are the adoption of portable account numbers that can transfer between financial institutions, reducing check hold times, and prohibiting unfair penalty fees.
Zombie accounts remain deceased at BofA
Bank of America publicized last week that it will no longer be reviving accounts that have been formerly closed and, by some error or oversight, continue to get electronic transactions.
In May, a Consumers Union post pointed out the "zombie account" practice and said it should stop. It said that customers do not have the choice to switch accounts when these kinds of things happen.
There are a lot of unpredicted penalties and maintenance charges that show up and can add to hundreds of dollars when a deceased account is opened up. B of A will not be doing it anymore, but it and Chase were the only two large banks that still did it, according to Customers Union.
Issue due to consumers
The issue occurs when customers are not switching banks properly, according to Bank of America 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."
Last year, when Bank of America announced it would be charging fees for debit transactions, many American consumers had had enough, prompting them to switch banks. According to a recent release from Consumer Reports, 20 percent of American consumers believed about switch banks in the last year. However, 63 percent of them say they were daunted by issues such as how to deal with the transfer of electronic payments.
More to do
According to Customers Union staff lawyer Suzanne Martindale, the step is good, but there's 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."
Consumers Union has pressured Congress and the Consumer Financial Protection Bureau to consider certain policy changes to make switching banks an easier matter for customers. Among those are the adoption of portable account numbers that can transfer between financial institutions, reducing check hold times, and prohibiting unfair penalty fees.
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