Friday, July 20, 2012

It's My Money And I'll Cry If I Want To

One of the many disreputable, hypocritical things that Bank of America does - is to make customers wait for their own money.

About three weeks ago, we refinanced our house to get a lower interest rate.  Our last few refinances have followed the same pattern:  BofA acquires our loan early in the term from our little bank; rates go down and I call to see if they will lower the rate; they refuse; we refinance with our little bank again; BofA buys our loan, taking on our new lower rate and presumably paying a few thousand dollars for what would have been theirs for free if they had listened to me in the first place.

The mortgage was paid off to BofA on July 11th.  As of today (July 20th), they had not sent our refund check for the excess balance.  We were supposed to get both the escrow overage and the refund of excess interest paid by us at around $50 per day - they collect it at the close "just in case the payoff comes late".

This whole "just in case" thing is a bit of a rip-off.  First of all, in today's world of automatic funds transfers, money moves instantly.  In 1965, sure, a postal mail delay might have meant that the bank would be waiting three or four days for the check to arrive (though I suspect that even then, couriers solved this problem).  So what the extra money (from the customer, of course) does, is simply to supply more income to the bank, while letting them take their time marking the account closed and paying off any overages.  Of course, the bank continues to earn more interest on the money all the while.  And by the way, if the payoff did get recorded late, it wouldn't be my fault in the first place, so again - why do I have to pay the extra?  Because BofA holds all the cards in this, and every, transaction in which they participate.

The way the whole thing works is that any penny BofA owns, is working for them; that's the business of any bank.  But it's not enough for any banking behemoth to use money they actually own - they've arranged the whole system so they can also leverage money they're just holding, even if they owe it to someone else.  In a sense, that's also the way banking works for everyone.  You put your money in a savings account, and the bank invests it and gives you some of the profits, as interest.

But BofA steps over the morality line by stealing a few extra days, or weeks, holding money that it owes to someone else, after that money has been requested as due.  It would be like going into your branch bank and trying to make a withdrawal, but the bank makes you wait a few hours so they can squeeze out one last little bit of interest - which they will not be sharing with you.

In our case, there was an overage of about $1300 including the escrow balance, not a trivial amount.  I remember from last time we did this, that you can write them ahead of time to ask them for the escrow money at closing, but they charge you for the privilege, so we did not do so.

I called the bank and enjoyed a tedious chat with a computer who warned me, "it looks like you want to speak with a representative, but sometimes there are long waits.  Perhaps you would like to hear our list of logo colors we considered and dismissed, instead".  I read somewhere that the voice-activated computer can tell when you get really fed up, so I've started saying "operator" as loudly and angrily as I can muster whenever I get one of these automated voices.  So far, so good.  Wait time for a human after embarrassing myself by yelling at a machine:  thirty seconds.

I then spoke with a representative, who cheerfully told me that it's their "policy" to wait at least ten to fourteen business days to release funds and issue checks.  I asked how BofA would feel if a customer had a "policy" to do that with the bank's money, but I don't think she understood the question.  I calmed down and asked for the department that could help with my problem of getting my overage money back.

I was transferred to the "payout" department, and spoke to someone named Katie.  She repeated their corporate policy of keeping people's money as long as they can, until one minute before they would be beaten by a mob of crazy customers with pitchforks.

Me:  I realize it's not you personally, but do you see how it is unfair that if I had the bank's money, they would be charging me $50 per day in interest, but they just hold onto my money and set whatever policy they want, while using my money to make even more money?

Katie:  I totally get your side of the situation.  If you do a refinance, and you know you're getting money back, you're like, "let's party!" and maybe you need that money back for something and you just can't wait.

Me [smoldering]:  Actually, that's not what I said at all.  It doesn't matter whether I need or want the money; it is my money.  How would you feel if I went to a lawyer and charged the bank interest for every day that I haven't received it?

Katie:  Well, we comply with all of the requirements and we have up to thirty days to return the money, so that wouldn't be successful...ok, let me ask for authorization to send the money to you right away.  We will overnight it, and you should get it by the middle of next week. the middle of next week.  Maybe they can use the time-travel delivery system in Clearwater to get my stuff to me faster.

So let me get this straight - BofA collects hefty fees just in case the money that is enclosed with the paperwork, wirelessly, is not counted quickly enough - but then sits on my money for "up to thirty days" with no interest whatsoever to me.

This spring, I was asked to sit on a Consumer Market Research Panel about BofA and its potential relationship with teachers.  They asked all kinds of questions about what products we would like, and which credit cards we might be interested in getting.  Every teacher in the room said a version of:  We are open to new offers, but Bank of America has a really terrible reputation which would dissuade us, so no thank you.

On the way out of the room, I must have convinced at least four of my fellow teachers to give DiscoverCard a try instead.  The market research people might not invite me back.

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