I recently noticed a reader's review of ING DIRECT in which he described how his account was closed with no apparent reason. ING DIRECT used to have a reputation for dropping some of its customers. In 2005 I wrote about a news article which quoted ING DIRECT's CEO:
Kuhlmann says the company "weeds out" up to five percent of its customers each month, for violations like asking for statements via mail, contacting the call-center too often or demanding a better deal because they have a large sum of money to deposit.
I haven't heard about this policy in recent years, but it's apparent that customers are still having their accounts closed for unknown reasons. So I decided to check on this with my ING DIRECT contact.
My ING DIRECT contact didn't say they still "weed out" customers, but she did say ING DIRECT still closes accounts when fraud is suspected or if the account becomes a dormant account due to lack of activity. As you might expect, they're careful not to disclose their policies that guard against fraud. However, I did receive information about avoiding account closure due to inactivity. In this case, you may not only have your account closed, but it can also cost you an inactivity fee of $25.
Unlike many banks, you shouldn't be surprised by an inactivity fee at ING DIRECT if you regularly check your email. My ING DIRECT contact sent me a template of the email that is sent to customers when their accounts are close to inactive. Here's an excerpt of that email:
It's been over two years since you've signed in to [your account]. We assess a $25 charge to all accounts dormant for more than 2 years. We don't want this to happen to you, so help us out.
All you need to do is sign in at ingdirect.com or call us at 1-888-464-0727 within 30 days from the date of this notice and your account won't be charged. Unfortunately, if you don't contact us, we'll charge $25 to your account. If the balance in your account is less than $25, the remaining funds will be applied to the charge and your account will be closed.
Remember, you should always sign in to your account at least once a year to verify your info and make sure no security issues have come up. It's your money - don't you want to know what's going on with it?
One thing nice about ING DIRECT is that they count signing into your account as an activity. That is typically not the case for other banks and credit unions. For those cases you may need a deposit or withdrawal. Some banks may not even count an ACH deposit as an activity. Also, the 2-year period is longer than average. A 1-year period is more common, and I've seen cases in which the inactivity period is as little as 3 months.
An important takeaway is that a bank doesn't need to have a reason to close your account. They are free to close the account whenever they want to. For that reason, it's a good idea not to be too dependent on any one bank.