Bank of America is putting its so-called zombie accounts out of their misery. The lending company will no longer restore closed accounts when it gets electronic debits or credits relating to them; a practice that often creates unwarranted charges.
No more zombie accounts around
Bank of America publicized last week that it will no longer be reviving accounts that have been previously closed and, by some error or oversight, continue to obtain electronic transactions.
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 occur.
There are a ton of unpredicted penalties and maintenance fees that show up and can add to hundreds of dollars when a dead 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 Consumers Union.
Problem because of consumers
The problem takes place 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 customers decided they wanted to switch banks during the last year, but 63 percent of them said they were too concerned about switching electronic payments to do anything over it, according to Consumer Reports. This was what happened after Bank of America announced its charges for having a debit card.
A good start, claims Customers Union
B of A was given applause from Consumers 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 ton of different things the Consumer Financial Protection Bureau can do in order to make things easier on consumers when switching banks. This could contain reducing check hold times, prohibiting unfair penalty charges 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 consumers.
No more zombie accounts around
Bank of America publicized last week that it will no longer be reviving accounts that have been previously closed and, by some error or oversight, continue to obtain electronic transactions.
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 occur.
There are a ton of unpredicted penalties and maintenance fees that show up and can add to hundreds of dollars when a dead 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 Consumers Union.
Problem because of consumers
The problem takes place 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 customers decided they wanted to switch banks during the last year, but 63 percent of them said they were too concerned about switching electronic payments to do anything over it, according to Consumer Reports. This was what happened after Bank of America announced its charges for having a debit card.
A good start, claims Customers Union
B of A was given applause from Consumers 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 ton of different things the Consumer Financial Protection Bureau can do in order to make things easier on consumers when switching banks. This could contain reducing check hold times, prohibiting unfair penalty charges 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 consumers.
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