Bank of America is putting its so-called zombie accounts out of their misery. The lending company will no longer revive closed accounts when it receives electronic debits or credits relating to them; a practice that often generates unwarranted charges.
No more zombie accounts around
All accounts that have been previously closed and are still sending electronic transactions for one reason or another at Bank of America 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 customers do not have the option to switch accounts when these kinds of things take place.
There are a ton of unexpected fines and maintenance charges that show up and can add to hundreds of dollars when a deceased 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.
The changing of banks
The problem happens 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."
About 20 percent of American consumers decided they wanted to switch banks in the last year, but 63 percent of them said they were too concerned about switching electronic payments to do anything about it, according to Consumer Reports. This was what happened after Bank of America publicized its fees for having a debit card.
Just the tip of the iceberg
Suzanne Martindale, staff attorney for Consumers Union, applauded the move by Bank of America, but said it is the tip of the iceberg:
"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 ton of different things the CFPB can do to be able to make things easier on customers when switching banks. This could include 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 can be adopted to make things easier on customers.
No more zombie accounts around
All accounts that have been previously closed and are still sending electronic transactions for one reason or another at Bank of America 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 customers do not have the option to switch accounts when these kinds of things take place.
There are a ton of unexpected fines and maintenance charges that show up and can add to hundreds of dollars when a deceased 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.
The changing of banks
The problem happens 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."
About 20 percent of American consumers decided they wanted to switch banks in the last year, but 63 percent of them said they were too concerned about switching electronic payments to do anything about it, according to Consumer Reports. This was what happened after Bank of America publicized its fees for having a debit card.
Just the tip of the iceberg
Suzanne Martindale, staff attorney for Consumers Union, applauded the move by Bank of America, but said it is the tip of the iceberg:
"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 ton of different things the CFPB can do to be able to make things easier on customers when switching banks. This could include 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 can be adopted to make things easier on customers.
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