Update 2/21/2012: The WSJ has reported on this issue. According to the article "Ally is in the process of crediting the proper interest payments to customer accounts and is "communicating with" customers".
If you have Ally Bank CDs, you might want to double check the interest that Ally credited to your account for 2011. A reader informed me that Ally had not paid interest in 2011 to one of his 5-year CDs. After several calls and over a month, Ally finally fixed the problem with his CD and credited the proper interest. Below is an excerpt of his first email to me about this issue:
They have not paid interest in 2011 to one of my 5-year CD accounts. I contacted them more than 3 weeks ago regarding the issue, and it has not yet been resolved. They could not give me an exact answer about the reason for this, and I don't see any results after contacting them several times.
I had tried to help by emailing my Ally contact to spur action, but it's not clear if that had helped. The reader just notified me that Ally finally fixed the issue:
Finally Ally credited my CD with last year's interest, which posted yesterday, and apparently it will be counted towards 2011 interest payments in the amended 1099-INT form that they will send me by the end of February.
I talked to someone in the executive resolution center. I was told that a lot of customers are having this issue due to "some" system error. Surprisingly, instead of finding the source of the error and solving it for all the accounts involved, they are dealing with this on a case by case basis, correcting the interest on the accounts for which they receive customer complaints. This is very worrisome, as I don't know what would have happened if I didn't catch the error. They "hope" that the error will be solved during the year so that this does not happen again, but of course, they could not assure this. They did offer to close the CD and open a new one replicating the terms hoping that the issue will not arise in the new CD.
To be honest, I am very disappointed with Ally. Who knows what other system issues they might have. I will take a closer look at all my accounts regularly from now on.
Ally customers who are not careful to review their accounts may miss this error, and it appears Ally may not fix the error unless there's a complaint. I doubled checked the interest credited on my Ally CDs, and all of the CDs were properly credited. This is probably a good practice for any of your bank accounts. It doesn't hurt to double check how the bank or credit union credits the interest. I'm surprised a bank could make such a mistake, but I suppose with any software, there's always the possibility of a bug.
Hat tip to the reader for sharing his experiences and getting the word out on this issue. If you had a good or bad experience at your bank or credit union, please consider sharing your experience using our bank review service.