Monday, May 26, 2008

More on Bank of America

In one of my earlier posts, Making the Rounds of the Banks, I hinted at more to come on Bank of America.

Let me summarize events leading up to a colossal blunder on the part of BOA (Bank of America):

  • On January 16, 2004, I froze Lola's overdrawn checking account at BOA and closed her plundered money market account, drained of all funds by the con artist known as John Mason.

  • On January 28, 2004, I called Bank of America's fraud department and filed a fraud claim on the defunct money market account in the amount of $20,321.35 because that was the amount that "Mason" had withdrawn in the previous sixty days.

  • In the course of the same call, I tried to file a fraud claim on the frozen checking account too, but they wouldn't let me. There was no way to prove that anyone other than Lola had authorized the telephone transfers of large sums from the checking account into the money market account for John Mason to withdraw.

Are you still with me? What happened next could seriously undermine your trust in banks.

On February 5, 2004, I had the shock of my life when I opened Lola's Bank of America monthly statement. I read the statement in the post office parking lot. My hands shook and I nearly passed out. I wrung my hands, went back to work, closed the door to my office, and tried to make sense of the bizarre chain of events that followed my January 28 call to BOA.

  • The FROZEN checking account, originally with a negative balance of about $200, now had a positive balance in the neighborhood of $10,000.

  • On January 29 (the day after my conversation with the fraud department), the bank had credited the $20,321.35 fraudulently withdrawn from the money market account TO THE FROZEN checking account.

  • Two large checks written by Lola on January 9 to two Canadian entities ( in reality, probably a single scam) had cleared the FROZEN account (which now contained lots of money). The first check cleared on January 29, the second on February 2. Each check was written for just under $5000, for a total of $9900. At that time, checks in an amount over $5000 would have attracted bank and regulatory scrutiny. Well, at most banks that is. BOA reactivates frozen accounts with a history of fraudulent transactions and puts money in them.
If you've read my earlier posts, are you starting to see why my failure to obtain the check register for the frozen checking account was so catastrophic? I had no idea that those checks were out there, but more importantly, even if I had known, I had the bank's assurance that the account was FROZEN. And furthermore, since the account already had a $200 negative balance, I reasoned, how could any check possibly clear?

It gets worse.

  • Predictably, Bank of America denied my fraud claim on February 27. After all, Lola had mailed her ATM card to John Mason and included the PIN. Upon denial of the claim, the $20,321.35 in dispute was removed from the checking account. Now the account had a negative balance of about $10,000.

  • When I notified Beverly, the Bank VP in Little Rock, she said I (on behalf of Lola) owed the bank the $10,000. My lawyer told me they didn't have a leg to stand on. It didn't matter. I was sick with fear.

  • I wrote detailed letters attaching copies of checks and statements along with pertinent facts and sent them to three different Bank of America locations -- the fraud department, customer service, and the billing department. I fretted and fumed for weeks. No one ever called me or contacted me. Finally, on April 23, 2004, a kind person in a BOA office somewhere in Florida told me that the case had been assigned to an investigator. He probably violated some privacy law in telling me that.

I never heard from Bank of America again. Not everyone is so lucky.

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