Bank of America claims it will put a figurative bullet in the head of its so-called "zombie accounts," to keep them dead for good. It will no longer accept electronic credits or debits to accounts that have recently been closed, producing charges and other problems for unaware customers.
No more zombie accounts around
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.
Consumers Union did a report in May where it said that banks should not do the practice, since it makes it much harder for consumers to switch banks. This was when the term "zombie account" was termed.
According to Consumers Union, Bank of America and Chase were the only two large banks who participated in reviving old accounts like this, and B of A has finally decided to quit the practice. Account holders have to pay unpredicted maintenance fees and fines when a deceased account is reopened without any notice.
Consumers the real issue
The issue takes place when consumers are not switching banks properly, according to Bank of America spokeswoman Betty Riess:
"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."
A ton of consumers wanted to switch banks when they found out B of A was going to be charging debit card charges, but a lot of them didn't. in fact, 20 percent of Americans wanted to switch banks in the last year, according to Consumer Reports. The issue is that 63 percent of them had to deal with the issue of transferring electronic payments, and that was too difficult for most people to deal with.
Not the only thing to do
According to Consumers Union staff attorney Suzanne Martindale, the step is good, but there's more out there:
"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."
There are a lot of different things the CFPB can do in order to make things easier on customers when switching banks. This could include reducing check hold times, prohibiting unfair penalty charges and adopting portable account numbers to transfer between financial institutions. These are some of the policies that might be adopted to make things easier on consumers.
No more zombie accounts around
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.
Consumers Union did a report in May where it said that banks should not do the practice, since it makes it much harder for consumers to switch banks. This was when the term "zombie account" was termed.
According to Consumers Union, Bank of America and Chase were the only two large banks who participated in reviving old accounts like this, and B of A has finally decided to quit the practice. Account holders have to pay unpredicted maintenance fees and fines when a deceased account is reopened without any notice.
Consumers the real issue
The issue takes place when consumers are not switching banks properly, according to Bank of America spokeswoman Betty Riess:
"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."
A ton of consumers wanted to switch banks when they found out B of A was going to be charging debit card charges, but a lot of them didn't. in fact, 20 percent of Americans wanted to switch banks in the last year, according to Consumer Reports. The issue is that 63 percent of them had to deal with the issue of transferring electronic payments, and that was too difficult for most people to deal with.
Not the only thing to do
According to Consumers Union staff attorney Suzanne Martindale, the step is good, but there's more out there:
"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."
There are a lot of different things the CFPB can do in order to make things easier on customers when switching banks. This could include reducing check hold times, prohibiting unfair penalty charges and adopting portable account numbers to transfer between financial institutions. These are some of the policies that might be adopted to make things easier on consumers.
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