Zombie Accounts - Trying to Close a Bank of America Checking Account
With Halloween approaching, I thought the topic of zombies would be appropriate. The zombies in this case aren’t the walking dead, but they’re bank accounts that you thought had been closed, but they have been brought back to life by the banks.
It has long been known that it’s not easy to close a Bank of America checking account. As described in this 2008 Consumerist article, “any electronic credit or debit will automatically reopen the account.” Often it’s an automatic direct deposit or ACH debit that the customer has forgotten. In my case it was a credit directly from Bank of America.
Background on My Bank of America Accounts
A long time ago I had a checking account and a safe deposit box at Nations Bank. I had a special deal that kept the safe deposit box free if I maintained a checking relationship. One of the ways to meet the relationship was a small CD. Back in the 90’s Bank of America acquired Nations Bank, but my free safe deposit box arrangement was grandfathered in. The only thing that changed was that they kept increasing the minimum balance of the CD. In the past I was able to get an adequate CD rate, but last August, the CD rates were so low, the free safe deposit box just wasn’t worth it. So I decided to close the CD, the checking account and the safe deposit box which would completely end my relationship with Bank of America.
The first thing I did was to close my Bank of America CD when it matured. I was able to do that over the phone and they were able to transfer the CD funds into my Bank of America checking account. I then planned to go into the branch to close the checking account and the safe deposit box. Before I had a chance to go into the branch, I was hit with a checking account fee since I no longer had the CD. Fortunately, when I went to the bank to close the account, the banker agreed to credit the fee back to my account before closure. He then closed my checking account and my safe deposit box. I then made one last withdrawal to zero out my balance. I thought that would be it.
Bank of America Reopens My Checking Account
After about two months, I was surprised to receive in the mail a statement for that checking account. It was converted to the MyAccess Checking, and I had a $1 balance. That $1 was a credit from the safe deposit box key refund. One would think that the bank would have sent me a check in the mail instead of reopening the account. I didn’t immediately go to the branch to re-close the account, but when I received the next statement with a negative $11 balance, I knew I couldn’t wait any longer. I was hit with a $12 monthly service fee.
I went back to the same branch and after a lengthy wait, I was finally able to meet with another banker. When I first closed the account, I did receive an account closing summary which provided proof that I did infact close the account. I presented this account closing summary with the statement showing the safe deposit box refund credit. Fortunately, the banker agreed to provide a $12 credit to reimburse me for the fee. The banker also closed the account again and withdrew the $1 refund credit. The checking account should now be closed for good, but I’ll be following up this time to ensure it stays closed.
Protecting Yourself from Zombie Accounts
The problem of zombie accounts isn’t just an issue at Bank of America. Zombie accounts have been a problem at many other banks. In one case that made the news, Wells Fargo charged a man $1,555.61 in overdraft fees after it brought a zombie bank account back to life.
A zombie bank account not only can cost you money, but if you don’t take action to resolve a negative balance, a bank could report you to ChexSystem. That can make it impossible for you to open accounts at any bank or credit union.
That’s one reason you may want to review your ChexSystem report every year. As described by Jonathan at MyMoneyBlog, “you have the right to a free ChexSystems report once a year, just like the annual credit reports.”
Often, the banker will 'do you a favor' by secretly opening a new, unauthorized BOA credit card at the time you close their checking account. If you later complain, they will apologize, saying that you told the teller verbally that you wanted to open the credit card!
Obviously, their employees are under tremendous presure/incentives to do this!