About Ken Tumin

Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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Woman Has Success in Closing Zombie Bank Account Thanks to CFPB


This is the first time I've heard of the term zombie bank account. It's defined as an account that you thought was closed but the bank never closed it. So it keeps on living and can come back to haunt you. This Consumerist article reported on a woman trying to kill off a zombie bank account. She had opened the account at Mellon Bank, and she thought the account had been closed in 1999. In 2010 she discovered after checking her credit reports that the account was not closed. Instead, the account was transferred to Citizens Bank after its 2001 acquisition of Mellon.

In April 2012 she filed a complaint through the Consumer Financial Protection Bureau (CFPB). As I reported in March, the CFPB has begun taking consumer complaints on deposit accounts. According to her letter posted at the Consumerist article:

One week later, a gentleman from Citizens' 'Executive Service Senior Advocate' called me and vowed to resolve the issue (after I sent one more letter, as they did need my signature).

Today, I got a notification from the CFPB that the account, which should have been closed 13 years ago, was finally closed and that the credit reporting bureaus would be notified of the correction.

Usefulness of the CFPB?

I've seen some worries that the CFPB may just be another bureaucratic regulator that will weigh down community banks. However, some see the CFPB as good news for consumers. The consumer advocate Clark Howard gave his opinion in his show notes:

The opportunity to fix problems and have the feds look for patterns [of problems] is great. After all, we taxpayers spent $7.4 trillion to save the banks. Wouldn't it be nice if they followed the laws of the land? That's the goal of the CFPB, to bring them to accountability.

This case reported by the Consumerist is one example that the CFPB can be helpful to consumers. Those having issues with their bank or credit union can also report complaints with the appropriate regulator. I described how this can be done in this post. I had success with one complaint that I had filed with the OCC.

Problems with Zombie Bank Accounts?

Have you had problems closing a bank account? This Huffington Post article warns about zombie bank accounts and how they can be costly if the accounts get hit with inactivity fees and overdraft fees:

Bank accounts that never close, or "zombie accounts," can end up costing a lot of money. Stu Straus of West Orange, N.J., was charged $1,555.61 in overdraft fees after Wells Fargo brought a zombie bank account back to life, according to the New Jersey Star-Ledger.

This is also another reason to regularly check your credit report. You can get a free copy of each of your three credit reports once each year at the federally-sanctioned site, AnnualCreditReport.com. Instead of waiting a year between checks, it's a good idea to check one of the three credit files every four months.

  |     |   Comment #1
What if they had charged her banking fees for having insufficient funds.  Could get pretty nasty over that length of time if one does not adhere to the banking rules.   Which reminds me, I need to call and close my ING account and also the Sharebuilder.  I am sure it is just a matter of time before they start requiring minimums to avoid fees. I wonder if it would bewise to do this writing or just call them. 
  |     |   Comment #2
CitiBank never really closes your account, they just mark it as dormant, balance zero.
I still receive statements with balance $0 after 4 years.
Calling and complaining leads to nowhere, visiting a branch just gets you a confirmation that the account is closed and that’s it, no follow up and nothing in writing is given to you, just verbal confirmation.
  |     |   Comment #3
I have had dormant acconts. If they were hit with fees so that the balance goes negative, they were all closed down automatically. Isn't that how it is supposed to work?
  |     |   Comment #4
The zombie checking accounts gone bad probably do not impact one's credit reports, but rather one's ChexSystems. Which can be checked annually for free.
  |     |   Comment #5
About CFPB:

I had a credit card issue, CFPB was quick to response and sent inquiry to the said bank.  However, it served only as messengers from that point on.  CFPB was of no help in my case.
  |     |   Comment #7
There was no checking account information in her credit report. Her checking account was apparently closed but not the LOC (line of credit) associated with the checking account. Lines of credit are reported on credit reports.
  |     |   Comment #11
Most of you are wrong. If an account is in the negative, most banks will charge off that account and sell it to a collections agency. This is why they can hurt your credit score. I have worked for Bank of America, Suntrust and even a small regional bank and this has been the case at every institution.

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