Bank of America claims it will put a figurative bullet in the head of its so-called "zombie accounts," to keep them deceased permanently. It will no longer accept electronic credits or debits to accounts that have recently been closed, generating fees and other difficulties for unaware customers.
Eliminating zombie accounts
All accounts that have been formerly closed and are still sending electronic transactions for one reason or another at Bank of America will no longer be revived.
The term "zombie account" was coined in a May report in Consumers Union. The post, Trapped at the bank, denounced the practice, saying it is one of the issues that make switching banks difficult for some customers.
There are a lot of unpredicted penalties and maintenance charges that show up and can add to hundreds of dollars when a dead account is opened up. Bank of America will not be doing it anymore, but it and Chase were the only two large banks that still did it, according to Customers Union.
Consumers the real problem
Betty Riess, a spokesperson for Bank of America, pointed out the problem can occur when customers are not sufficiently diligent when switching banks:
"As always, we remind customers to allow time for outstanding items to clear the account, and make changes to automatic payments and credits before closing the account."
Last year, when B of A publicized it would be charging fees for debit transactions, many American consumers had had enough, prompting them to switch banks. According to a recent release from Consumer Reports, 20 percent of American consumers thought about switch banks during the last year. However, 63 percent of them say they were daunted by issues such as how to deal with the transfer of electronic payments.
More to do
B of A was given applause from Customers Union attorney Suzanne Martindale, but she pointed out that there is more to do:
"While this is a welcomed change in policy, consumers at Bank of America and other banks continue to face a myriad of obstacles that can make switching to a new financial institution a time-consuming mess. That's why we need Congress and the Consumer Financial Protection Bureau to enact reforms that make it easier for consumers to move their money."
In order to make it easier for customers to switch banks, the CFPB is considering new policies for banks. This could contain adoption of portable account numbers that can transfer between banks, prohibiting unfair fines and reducing check hold times.
Eliminating zombie accounts
All accounts that have been formerly closed and are still sending electronic transactions for one reason or another at Bank of America will no longer be revived.
The term "zombie account" was coined in a May report in Consumers Union. The post, Trapped at the bank, denounced the practice, saying it is one of the issues that make switching banks difficult for some customers.
There are a lot of unpredicted penalties and maintenance charges that show up and can add to hundreds of dollars when a dead account is opened up. Bank of America will not be doing it anymore, but it and Chase were the only two large banks that still did it, according to Customers Union.
Consumers the real problem
Betty Riess, a spokesperson for Bank of America, pointed out the problem can occur when customers are not sufficiently diligent when switching banks:
"As always, we remind customers to allow time for outstanding items to clear the account, and make changes to automatic payments and credits before closing the account."
Last year, when B of A publicized it would be charging fees for debit transactions, many American consumers had had enough, prompting them to switch banks. According to a recent release from Consumer Reports, 20 percent of American consumers thought about switch banks during the last year. However, 63 percent of them say they were daunted by issues such as how to deal with the transfer of electronic payments.
More to do
B of A was given applause from Customers Union attorney Suzanne Martindale, but she pointed out that there is more to do:
"While this is a welcomed change in policy, consumers at Bank of America and other banks continue to face a myriad of obstacles that can make switching to a new financial institution a time-consuming mess. That's why we need Congress and the Consumer Financial Protection Bureau to enact reforms that make it easier for consumers to move their money."
In order to make it easier for customers to switch banks, the CFPB is considering new policies for banks. This could contain adoption of portable account numbers that can transfer between banks, prohibiting unfair fines and reducing check hold times.
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