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
An announcement from Bank of America said that there are some accounts that have been closed but still get electronic transactions sometimes. These accounts will no longer be revived.
In May, a Consumers Union post pointed out the "zombie account" practice and said it should stop. It said that consumers do not have the option to switch accounts when these kinds of things take place.
When a bank reopens a dead account without telling the account holder, it can leads to unpredicted fines and maintenance charges, occasionally amounting to hundreds of dollars. According to Customers Union, the publisher of Consumer Reports, B of A and Chase are the only two large banks practicing the "resurrection" of old accounts. And now BofA is off the grid.
Customers should be diligent
The problem happens when consumers 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."
Last year, when Bank of America publicized it would be charging charges 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 customers imagined about switch banks during the last year. However, 63 percent of them say they were daunted by problems such as how to deal with the transfer of electronic payments.
Just the tip of the iceberg
Bank of America was given applause from Customers Union attorney Suzanne Martindale, but she pointed out that there is more to do:
"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."
There are a lot of different things the Consumer Financial Protection Bureau can do in order to make things easier on customers when switching banks. This could consist of reducing check hold times, prohibiting unfair penalty fees and adopting portable account numbers to transfer between financial institutions. These are some of the policies that may be adopted to make things easier on customers.
Saying goodbye to zombie accounts
An announcement from Bank of America said that there are some accounts that have been closed but still get electronic transactions sometimes. These accounts will no longer be revived.
In May, a Consumers Union post pointed out the "zombie account" practice and said it should stop. It said that consumers do not have the option to switch accounts when these kinds of things take place.
When a bank reopens a dead account without telling the account holder, it can leads to unpredicted fines and maintenance charges, occasionally amounting to hundreds of dollars. According to Customers Union, the publisher of Consumer Reports, B of A and Chase are the only two large banks practicing the "resurrection" of old accounts. And now BofA is off the grid.
Customers should be diligent
The problem happens when consumers 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."
Last year, when Bank of America publicized it would be charging charges 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 customers imagined about switch banks during the last year. However, 63 percent of them say they were daunted by problems such as how to deal with the transfer of electronic payments.
Just the tip of the iceberg
Bank of America was given applause from Customers Union attorney Suzanne Martindale, but she pointed out that there is more to do:
"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."
There are a lot of different things the Consumer Financial Protection Bureau can do in order to make things easier on customers when switching banks. This could consist of reducing check hold times, prohibiting unfair penalty fees and adopting portable account numbers to transfer between financial institutions. These are some of the policies that may be adopted to make things easier on customers.
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