Financial FUBAR

March 23, 2008 12:25 PM

Financial FUBAR!! I am having a serious problem with my Credit Union. I am trying to quit but due to a screw up on their part, and mine, they will not let me and are dunning me for monies I do not feel that I am liable for.

On November 25, 2007 I send them a fax directing them to close all my accounts with them; checking, savings, debit card and credit card and send me a check for the balance in my accounts. On checking with them the following week I found that nothing had been done. The fault was mine. I had inadvertently transposed two digits in my account number. Despite having all my contact information no one from the credit union contacted me to ascertain my intent. On Sunday, December 2nd I once again faxed them instructions to close my accounts effective on receipt of the fax. They had the fax waiting for them on Monday morning, Dec. 3.

On that Monday they accepted an automatic charge, of which I was unaware, of $143 from Sirius Radio. On Dec.5th they cut me a check, which emptied my checking and savings accounts. By their rules a member must maintain a minimum balance to remain a member. So by their rules I was no longer a member. They are now dunning me to pay the charge, which I feel was made through their error. To add insult to injury they also accepted another automatic charge, this time against my checking account, in the amount of $15.50 plus another $20.00 fee for a courtesy payment since the account was empty.

I do not feel liable for their errors. I am filing a complaint with the California Department of Financial Institutions to ask for advice on how to proceed.

Any input from the hive mind would be appreciated.

posted by paulboc to work & money (6 comments total)

I'm not clear on why "accepting an automatic charge" involved a two-day delay in actually deducting the amount from your account, and why they cut you a check for the non-deducted balance in your account since they (presumably by their own records) knew about the charge on 12/3.

Legally, I doubt that merely having a low balance will cancel your membership. Beyond that, people have to pay back bank mistakes all the time. You might be able to sue them in small claims for the fees and they might take them off just for their own convenience.
posted by rhizome at 12:34 PM on March 23, 2008

I feel that there are parts missing from your story.

- I assume your bank has a stated policy concerning how you have to go about closing your account and what the time limits are for this sort of thing happening. Given their written policies, should they have closed the account before clearing any outstanding charges?
- The transposing numbers accident seems like yours and yours alone, while it would have been nice for them to follow-up with you, they didn't and that's more of a customer service issue than a banking issue.
- what is the automatic charge from Sirius? Were you anticipating it? Is it a debt you owe? If that charge is fradulent, that's a separate issue from your issue with the bank. The answer to the question "what is the deal with the Sirius charge?" should really help figure out your next move.
- When was the other automatic charge accepted? What is the bank's policy concerning outstanding debts/charges? I know for my credit union, for example, I can't close my account until all the checks I've written on the account have cleared, though they will take my word for it if I say that they have.

If your bank officially closed your account, it does make sense that they not accept more charges against it. However it would also make sense for the bank to pay charges at some level (consider an alternate situation where someone is frustrated that their bank didn't pay an electric/internet/cable bill and their service was shut off)

So, while I sympathize with your frustration, the way you are explaining this sequence of events make it seem like you are closing your account for the purpose of evading these charges and your accidental number transposition got in the way of this and made everything a little too close to the wire. Your first steps in how to proceed should be to get an accounting for what happened, from the bank's perspective, so that at least you know you are working form the same timeline. Unless you feel that you have already exhausted your options with the bank, there's really no reason to being the CDFI into it at this point.

I assume you have done this because this all happened over three months ago. What has happened with your communications with the bank since then? Do they still consider you a member because of this outstanding charge? What is their response to your fax directing them to close your account prior to the $15.50 charge?
posted by jessamyn at 12:45 PM on March 23, 2008

FWIW, I spaced our Sirius automatic renewal until it showed up on our anniversary date; nonetheless, your agreement with Sirius and the CU probably puts the responsibility on you for stopping or changing an automatic charge, and in each case it's probably in writing somewhere how many days in advance you were to notify both parties. If possible, take a deep breath and consider a call back to the credit union, assuming responsibility for the Sirius charge but asking, very nicely, if they would consider waiving the penalties involved.
posted by Sweetie Darling at 1:56 PM on March 23, 2008

I'm having a hard time blaming them for charges on automatic payments you did not cancel prior to cancelling the account. Sounds like you were trying to duck payment. Chandler and Ross did this to get out of a gym contract on Friends, but in real life ... you're still kinda responsible for those charges unless you specifically tell the bank to stop payment in the correct way.
posted by dhartung at 2:45 PM on March 23, 2008

Their failing to follow up on transposed account digits is a real problem on their part. I mean, they had your name and all your info and they couldn't put 2 and 2 together?

That said, when I close accounts, I do it in person so I can make sure it gets taken care of. There are some transactions, and some companies, where there's a high chance something will go fubar without broadband communication - face to face.
posted by zippy at 3:08 PM on March 23, 2008

I am sure that had I walked into the credit union to close my account it would have happened in a matter of minutes. The problem is I now live some 1800 miles east of the office. I had no intention of ducking any legitmate charges but I was unaware of Sirius' renewal policy. My bad.
posted by paulboc at 5:39 AM on March 24, 2008