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Naming Beneficiaries On POD Accounts -- SS Not Required!

me1004
  |     |   949 posts since 2010

A comment about the small minority of banks and credit unions that require you to provide the Social Security number of beneficiaries on a POD account:

Over the years, on rare occasion, I have gone to open an account at a bank or credit union, and when it gets to beneficiaries -- I choose to list two -- they require, not merely request, that I provide the Social Security numbers of the beneficiaries. They will insist it is required -- and nowadays will blame it on the Patriot Act. But that is just misinformation as it is simply an in-house policy, the Patriot Act does not require you to provide the SS number of your beneficiaries. Geez, your beneficiaries don't  even have to have a Social Security number (imagine naming a 2-year-old as your beneficiary - they don't even have an SS number).

I have gone around with some of them, even gone up to the CEO, and sometimes they will waive the "Patriot Act" requirement. But normally, they just don't know what they're talking about and won't budge.

In the end, over the years, I have had to NOT open an account I otherwise wanted to because I don't have the SS number of my beneficiaries to provide -- and I will not open an account without beneficiaries on it. Of course, since that will have been my first-choice account, I end up with a lesser option to fall back on -- but that lesser option does open with beneficiaries without a SS number. The first bank loses my business, and I'm unhappy about having to settle for a lower rate at another bank -- everyone loses because of this stupid requirement.

Ken, I think it might be worth an article sometime on this issue, pointing out banks are not legally required to demand an account holder to provide the SS number of their beneficiaries. I think some of the people making these decisions just think everyone leaves their money to the kids, and that the parents set up the kids' Social Security numbers, so of course an account holder has the SS number of the beneficiaries. NOT SO.

Mind you, a beneficiary does not even have to be a relative. But even if they were, that does not mean the account holder can even dare ask for the Social Security number, much less might they want to. In my case, I want to name my niece and nephew as my beneficiaries. But I don't have and cannot have their Social Security numbers. I can't even ask for such a thing. Besides not being able to ask even if I wanted to, I don't want to -- I don't want them to know they are my beneficiaries and have that influence their decisions in life and finance. But I can give their full names, date of birth, address -- and even list them as niece and nephew. Yes, of course if they were to collect after my death, they would have to provide a Social Security number at that time, but that has nothing to do with naming them as beneficiaries. I have also considered naming people who are not my relatives as my beneficiary, although so far I have not done so, but I should be able to do so, not blocked over a bank policy requiring a Social Security number I can't have.

An account holder can't just ask someone to hand over a Social Security number -- that is highly private information that no one can just hand over to another, for security reasons. Consider, I could name Ken as my beneficiary, he's a good and deserving guy -- Ken, are you going to give me your Social Security number? Well, neither is anyone else -- not even a relative. 

This latest issue came up with Quorum Federal Credit Union. So, they lose my account for their 25-month CD at 1.5 APY. They lose, and now I will have to find some lesser option for my account. And I was offended when they told me they have no choice, it is required by the Patriot Act -- they do not know what they are talking about!

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Ally6770
  |     |   2,898 posts since 2010
2 things to consider.  
1. A two year old has a SS number. A parent cannot claim a child as a dependent without a SS number. The first year this was required 6 million dependents disappeared.
 2. After a death a bank or credit union will not try to contact a beneficiary.  If you don't let the beneficiary know that they are beneficiaries or let someone else know that who the beneficiaries are they could likely never receive the money.  If you are not able to collect on the CD after so many years it will be escheated and go to the state where you live. 
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paoli2
  |     |   2,603 posts since 2011
me1004:  Thanks for bringing this problem to light.  I use the same beneficiary on all our CDs and they always want to know the SSN.  I thought it had to do with identifying them as the same person on the CDs when time came for them to request the account or accounts.  However, they could identify them by a driver's license which also has their photo.  I think the need for the SSN is just out of habit with the banks and cus but they insist upon it.  I would love to see some organization find a way to do something about this. 
I have called all my banks and credit unions which my relative would have to contact if I became deceased and asked them what their requirements are so the person would know what they are.  Other than a Certified Death Certificate, they all just wanted a copy of the driver's license.  Sooooo why do we have to give the SSN when we are buying the CDs and asking them to put a beneficiary on it.  The most intellectual reply I usual get is "it's just something we have to have".  They really don't know why.

If you find a way to get around this, I would appreciate your posting it on DA so we could learn what to do in our own situations.
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Ally6770
  |     |   2,898 posts since 2010
Answers about Identification 
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paoli2
  |     |   2,603 posts since 2011
Well I guess that settles the matter.  We have to give them the SSN if we want to use a beneficiary.  Thanks.
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ChasR
  |     |   288 posts since 2013
I have one POD beneficiary who I don't have the SSN of--or want to ask for, even.  I was able to make her a POD beneficiary on accounts at Ally, Alliant CU and Synchrony Bank without the number.
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me1004
  |     |   949 posts since 2010
Answers about Identification 
Ally, that says the banks are ALLOWED to ask the beneficiary for the SS number if  the beneficiary is seeking to transact (as in claim the money upon death). Yes, I have no issue with them asking for the beneficiary to provide a SS number when they want to collect  -- that's even a point I make when I have to argue with the bank. It further says only that the bank must ask for the SS number of me, of the accountholder -- of course, and I provide my SS number. There is nothing there that says I must provide the SS number of the beneficiary -- it says the beneficiary can be required to provide that, but that is merely something the bank is allowed to require, the bank is not necessarily required to demand it.

My comment was not actually trying to figure out my specific situation. But Ally, I am set up so my beneficiaries would learn of it at time of my death. I know the banks do not notify.

Paoli, I know most banks ask for the SS number. Few REQUIRE it, if you ask. I  have been with lots of banks over the years, including since the Patriot Act, and like I said, I never go with one that requires the SS number of the beneficiaries. Almost all of them ask, but few of them require it. In fact, I'm now looking at Third Federal which says I can open a POD account without knowing the SS numbers of my beneficiaries.

It is unreasonable for someone to have to provide SOMEONE ELSE's SS number. Everyone is supposed to keep their SS number private, not hand it over to anyone who promises them money! Can you spell I-D-T-H-E-F-T?
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paoli2
  |     |   2,603 posts since 2011
me1004:  I must have misread what was written.  I think in the future, I will try to stand my ground with the bank or cu about the SSN.  It makes sense that "we" should not have to know it just to make them a beneficiary.  I just looked at the form I sent in to Navy FCU recently making my relative beneficiary on "all" our CDs, present and future, and it does have a block where I had to put the SS in.  At the time, I thought it was required but in the future I will see what happens if I refuse.
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me1004
  |     |   949 posts since 2010
Paoli, yes, I can't think of anytime I have not been asked (there might have been once or twice in years gone by, not sure), but I will then tell them I don't have it, is that a issue, and nearly always they say it doesn't matter, just proceed without filling that in. And other times I will have to go around with them, but they then say to just proceed without it.

I had this issue very rarely prior to the Patriot Act, now I have it still rarely, but it seems not quite as rare. Regardless, I think some banks are just being ridiculous, and others are honestly not understanding the law, probably really do mistakenly think they are legally required to collect that from me. I get the impression that some are demanding it on the basis that they must have an SS number of anyone who can transact on an account -- but the beneficiary cannot transact on the account until after I die and after they then must prove their identify to collect, and after that, only then will the paperwork be done that changes the account to their name and so then they must provide a SS number -- they do not come in under the rule that requires an SS number for someone who can transact, not until they no longer are beneficiaries but are the account holder.

After I could not get past square one with the customer service people at Quorum, and they would not let me speak directly with a higher up, I did this weekend send an e-mail to the CEO about it. If I get a response, I will let you know.

I ran into some word games for the first time with Third Federal. They were saying I can't name beneficiaries without providing the SS number for them (great, a rarety twice in a row!). But after going around with them, they popped up with something I've never heard before: they said I can name an RUD (recieve upon death) on a POD account. What?! An RUD?! I've never heard that term before. They said beneficiaries cannot be named on a POD, only RUDs can be named. They said something about if it were an IRA, then the beneficiaries' SS numbers must be provided (that makes NO sense! But I don't have to deal with that, this is not a IRA.) Nonetheless, they are opening a POD account for me with my RUDs named to receive the funds if I should die. I think, again, they don't know what they're talking about. Its not called an RUD, its called a "beneficiary." Word games. 
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paoli2
  |     |   2,603 posts since 2011
me1004:  "RUD"???   Are they purposely trying to make us miserable?  I don't use Third Federal at this time but thank you for warning me about the new "RUD" term.  I think they are just playing stupid word games for sure.  So glad to hear you are a "Stand UP" person and do not let them get away with their actions.  If more of us contacted their CEOs, maybe this run around would end and we can do our business in a professional, peaceful manner. 
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me1004
  |     |   949 posts since 2010
I was talking with Midwest One Bank today. They told me they don't even have a place on the POD application asking for the beneficiaries' SS numbers. 
So yes, most ask, but some don't even ask. Of those who ask, most don't require it.
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me1004
  |     |   949 posts since 2010
I thought I would mention, it is now four days (three business days) since I e-mailed Quorum FCU CEO Bruno Sementilli asking that he change the policy that requires account holders to provide the SS number of their beneficiaries. I have received no response.
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paoli2
  |     |   2,603 posts since 2011
If you are asking him to change a policy, he may have to bring it up at a Board Meeting.  Maybe the fact that you have not gotten a reply yet is an indication he is in the process of taking your request seriously.  He, could at least, have his secretary drop you a note stating he is working on your request.  At least you gave it a try and that is more than most would do.  Thanks for the effort no matter how it turns out.
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me1004
  |     |   949 posts since 2010
OK, midday now, and I just got an e-mail back. He is leaving the policy in place, but is granting me a waiver. 

This allows me to do a POD there. But too late now though, as I had to put my check in the mail yesterday to my second choice, Third Federal, so they would have the check in time to open the account promptly! If he had responded earlier, he could have had my account, as I need only go to a shared branch for the CU, not wait on mail. 

This raises the issue about the customer service people not letting me talk directly with a higher up, as I noted earlier in this thread. Had they done so, perhaps this could have been waived as early as last week, and they could have had my account. 

While I am happy they would waive the requirement for me, I still think the policy should be changed. If it is safe to do so for me, who they know nothing about, it is safe to do so for all. Neither I nor anyone else should have to go to the trouble to find and contact the CEO (I actually had to make up his e-mail address out of my head, it was not available anywhere) to ask for a special exception. (Actually, I asked him to change the policy, not for a special waiver for me.) 

Here is the response:

"Our CEO, Bruno Sementilli, has asked me to send this message on his behalf.  We would be happy to make an exception for you and waive any requirement to provide social security numbers for the POD beneficiaries you would wish to name on your accounts.  While we endeavor to provide a high level of security for our member accounts, we would not wish this policy to prevent you from adding these beneficiaries to your accounts as you see fit."
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paoli2
  |     |   2,603 posts since 2011
me1004:  Sorry it didn't turn out the way you wanted but you were successful and proved that one person can make a change by the fact that they were willing to give you a waiver.  I would keep that response and if you ever want to use them in the future, send them a copy of it and use it as the reason you are not providing SS numbers for POD accounts.  I have been amazed at the poor customer service we are allowed to put up with with certain institutions.  I spent hours literally on the phone yesterday with a Supervisor at one of the nation's biggest credit unions trying to get "her" to understand her own Disclosure rules.  The incompetence we have to put up with workers who are handling our money can be appalling.    Thanks anyway for sticking to your guns and being able to contact that CEO.
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