Guest Post by Laurie Lewis
The envelope from the bank was too thin to be my monthly statement or my credit card bill. I assumed it was an announcement of a new bank offering. Was I wrong! The one-pager stated that the bank was closing my account within twenty days of the date on the letter, which had taken more than a week to reach me.
The letter gave no reason for the closure except that the action was “in accordance with the Rules for Deposit Accounts.” It offered four options to transfer the funds to another division of the same international bank. None of the options included speaking with a live person; they all involved some sort of electronic transaction.
The bank had never provided me the telephone access code that most of the transfer options required. Even if I did have the code, I wouldn’t transfer my funds within the bank that was closing my account without explanation.
My tenure with this bank went back more than twenty years, through three mergers resulting in three name changes. In recent years, I had kept the balance relatively low because this account was linked to PayPal, which has a history of being hacked. This account was also where my book royalties were automatically deposited. A royalty payment was due around the time of the unexplained account closing.
In an attempt to learn the reason for the closing and to try to delay it for a month while I arranged for new PayPal and royalty links, I visited a local branch. Without access to the institution’s compliance department records, the banker couldn’t explain why the account was being closed. What he did say shocked me: “We close accounts all the time without explanation.” He backed up the bank’s right to do this by showing me its Rules for Deposit Accounts, which state that it “has the right to close your account at any time by sending you a notice and/or check for the balance.”
After the unsuccessful attempt to resolve my dilemma in person, I chose the option in the closing letter that read “If you do not have Personal Internet Banking or a Telephone Access Code, call our Customer Relationship Center.” Clearly, the writer of the letter had never tried calling the number listed, because the automated message asked for a telephone access code. After hanging up several times in frustration, I finally stayed on the line listening to repeated instructions to enter the code that I did not have, until given the option of speaking to a representative.
The customer service representative read me exactly what was in the letter and said she had no information beyond that. I asked if the bank could keep the account open for another month while I made other arrangements for automatic deposits and electronic links. She said that was impossible and repeated, in a robot voice, that she was sorry for any inconvenience.
At this point I requested an address for the person who had signed the letter so I could protest the bank’s action in writing. When told that was impossible, I blew up. “In that case I will have to put this story on the Internet, and it may very well go viral. Your bank’s name will be mud,” I threatened.
The same day I received the letter, by the way, news broke of a multinational scandal involving the very bank that was causing me so much trouble. The customer service rep was smart enough to know that a story about a little guy being burned by the megabank could only fuel the flames of negative publicity. She asked if she could put me on hold for a few minutes.
When she returned, she explained that the reason my account was being closed might be that the bank needed more information about me. She ran through a series of questions: address, phone number, mother’s maiden name, occupation. The questions were familiar, because a month earlier I had been through the same list with a branch banker. That visit had been prompted by a letter asking me to stop by so that the bank could update my file. None of the information I provided was different from what the bank should have had on file for years.
I suspect I know the reason for the account closing. Either the banker I had spoken to a month earlier had failed to hit “Save” after updating my file, or the bank’s internal computers had not communicated with each other. I was never told that failure to update my file would lead to a closed account. But that’s the only explanation I can see. Unless, of course, the bank was closing my account simply because it could.
At the end of our conversation, the customer service rep said she hoped that providing this routine information would prevent the closing. But she made no promises, and I knew better than to trust that all would be well.
I opened an account at another bank and linked it to PayPal, my royalty providers, and the few other organizations with which I do automatic electronic transactions. Several weeks passed. The next statement from the problem bank arrived and showed the account was still open, past the designated closing date.
Now the time had come to put an end to my relationship with the bank. I went to a branch to close my account. Too late! The bank had just done it, three weeks after the date when it had planned to close the account, a few days after the last statement date. Good thing I hadn’t believed the customer service rep when she said she thought the account would remain open!
A check for the balance in the account arrived the next week. A few days later I received a statement indicating that the account was closed. The bank never informed me that it was actually closing the account; it simply did it and sent the money.
As I now reach for scissors to cut up my credit card from this bank, severing the last ties, I think about the potential ramifications of the bank’s action. Fewer than six weeks elapsed between the day I received the closure letter and the day the close-out check arrived. Suppose I had been traveling, hospitalized, or too busy to read the mail and did not know about the planned closing. What if the only letter informing me of it had been lost, not just delayed, in the mail? If I had been unable to set up a new direct deposit account in time, what would have happened with the royalty income I was expecting? What if I relied on electronic banking to pay my bills and they went unpaid for several months: wouldn’t this be a blemish on my credit rating?
Direct deposit of salary and Social Security payments is becoming the norm these days. Many people also receive variable payments such as royalties by direct deposit, pay recurring bills online, and engage in electronic transactions through services like PayPal. A single letter that a bank mails twenty days, even six weeks, in advance of an unanticipated account closing is not adequate warning for a customer to set up and confirm new automated arrangements. The consequences can be serious: delayed receipt of income, unpaid bills, and damaged credit. No bank should be permitted to close accounts without adequate warning simply because it can.
Laurie Lewis is a freelance medical writer and editor based in New York City. She is the author of the award-winning book What to Charge: Pricing Strategies for Freelancers and Consultants, now in its second edition. Her next book on freelancing, in which she shares lessons from a successful career of more than twenty-five years, will be published in 2013. Learn more about her at www.laurielewis.naiwe.com.