PLEASE, advice needed. How would you handle this banking blunder?

[Anna]

We have a credit card account at our bank that we are working on paying off. The balance is around $2,000. Our agreement with the bank is to pay them a minimum of $50 on the 30th of each month, which we do. Each month I, myself, go in and hand deliver a check to the bank just to make sure they get the payment on time. I speak to a bank rep at least twice a month on the phone because they regularly call here to remind me of the account... as if I'm going to forget. Each time we speak, including the last time which was late last week, the bank rep tells me that everything on the account looks good, meaning, we are holding up our end of the agreement. He's happy, I'm happy.

 

Anyway, I got a phone call from a collection agency a couple days ago and they tell me that the bank's corporate office sent our account to them to be paid in full. I was livid!!! I told him everything I shared above and said we'd be in touch with our bank to straighten it all out. He said "good luck" and hung up. Monday, I got a letter in the mail from the collection agency.

 

Yesterday my dh called the bank's corporate office to straighten out the mess and he was transferred about four times. Finally the last person he spoke to said, "Yes, it looks like it has been sent to collections but we can't get it back now."

 

Can you see the smoke coming out my ears and nostrils right now?:cursing::banghead:

 

Today, after I drop my dd off at community college I have to drive across town, pick up my dh from his office so we can head to the bank and discuss this in person with them.

 

If I had $2,000 I would have pd this in full long before this. So it's not a thing of just giving them the $2,000 and being done with it. But we have been paying exactly like the bank requested. They had no right to do this to us, as far as I can see.

 

Questions---

If you were me, what would you tell them when you go in to the bank? I imagine they will call corporate office so if corporate tries to give them the same song and dance of "it's in collections already, too bad"... what can we do?

 

We have been doing business with this local bank for 4 years so all the employees there know us... we hope that will help our case. All together, my family has 3 savings accounts with this bank and 3 checking accounts. We are faithful customers.

 

I'm hoping we can clear it up today but if we don't, where do we go from here?

[PariSarah]

We have a credit card account at our bank that we are working on paying off. The balance is around $2,000. Our agreement with the bank is to pay them a minimum of $50 on the 30th of each month, which we do.

 

That would go a long way toward whatever argument you hope to make.

 

If not, I would go into the bank in person, and not leave until you get a satisfactory resolution.

[Anna]

That would go a long way toward whatever argument you hope to make.

 

If not, I would go into the bank in person, and not leave until you get a satisfactory resolution.

 

We ARE going in to our local branch today to discuss this with them face to face.

[Tammy]

then you probably can't do a thing. I hope everything works out for you....

 

Tammy

[Heather in the Kootenays]

I'd do exactly what you're planning on doing - going in to talk to the bank. Your local bank will see you as people - not just a number on ledge - so you have a much better chance of getting this resolved.

 

The collection agency has no motivation - they get paid when accounts get transferred. The corporate office doesn't really care either. It's your local bank that can help you if anyone can.

 

I know that you know this but please stay calm and polite. Speak to the highest level person you can. I'm amazed at how many of my clients (I'm an advocate) think that yelling at a clerk is going to help their case. It doesn't.

 

If staying calm is a problem for you, you could always write a letter expressing your concerns and take it with you.

[Nestof3]

I would think that there's some record of these conversations since most companies update the account with such items. I cannot tell you how to get them to find it, but I agree -- be persistent.

 

You do mention that you have a savings account there. I'm not sure if this credit card has interest being charged to it, and I understand funds being tight, but let me share this picture with you.

 

Let's say you owe $2,000 at 9.9% APR. If you paid the $2,000 without any interest, it would take you 40 months to pay (assuming you pay $50 a month).

 

With interest, you are actually going to have to pay for 49 months, adding an additional $450 to the original $2,000.

 

Just adding an extra $10 a month ($60), it will take you 39 months to pay it off adding $340 to the original $2,000.

 

Here's the calculator I use all the time:

http://www.bankrate.com/brm/calc/creditcardpay.asp

[Anna]

I know that you know this but please stay calm and polite. Speak to the highest level person you can. I'm amazed at how many of my clients (I'm an advocate) think that yelling at a clerk is going to help their case. It doesn't.

 

Staying calm while talking with them at the bank is not a problem for us. I'm curious-- Do businesses make a habit of arranging payment plans and then send the account to a collection agency when everything is being done correctly and on time? This just stinks in my book.... that they would do this.

[JFSinIL]

Do you have receipts showing that the bank has accepted your $50 each month? Anything in writing from the bank about your arrangement to pay $50 a month?

[Anna]

I would think that there's some record of these conversations since most companies update the account with such items.

 

Yes, there have been many phone conservations with a bank rep so they should all be on file.

 

You do mention that you have a savings account there. I'm not sure if this credit card has interest being charged to it, and I understand funds being tight, but let me share this picture with you.

 

Yes, I totally understand what you're saying here. We are currently in debt due to a cross country move and a house sale that was not profitable during that move. We're working on getting out of debt ala Dave Ramsey method. Soon, we were hoping to get to this particular bill and pay it off quickly but we were not quite there yet.

 

So... meantime we have been paying them exactly as they asked.

[chiguirre]

Hi Anne,

 

Before you even bring this to your local branch's attention, try to get as much money out of your accounts in this bank as possible. They may be trying to get a judgement against you (even though you negotiated a payment plan) and will be able to seize your accounts if they succeed.

 

Here's a link to get you started investigating if this might be what's going on:

 

http://bankruptcy.lawyers.com/consumer-bankruptcy/Bank-Account-Seizures.html

 

Good luck!

[Anna]

Do you have receipts showing that the bank has accepted your $50 each month? Anything in writing from the bank about your arrangement to pay $50 a month?

 

Yes, receipts but it's also in the files at our bank. All the payments are shown in the file. It's been a while so I'm not sure if the arrangement was made in person and on the phone or just on the phone. Our bank has never told us that we were negligent on this account. Each time they call, they are happy that we're paying the requested amount and that we're paying it on time each month. We've not had one complaint. That's what so weird about this whole thing.

 

I could see if we had skipped payments or were paying late, after the due date but no, everything's fine according to the bank reps.

[Anna]

Before you even bring this to your local branch's attention, try to get as much money out of your accounts in this bank as possible. They may be trying to get a judgement against you (even though you negotiated a payment plan) and will be able to seize your accounts if they succeed.

 

Here's a link to get you started investigating if this might be what's going on:

 

http://bankruptcy.lawyers.com/consumer-bankruptcy/Bank-Account-Seizures.html

 

 

Thanks for the link but we are not trying to declare bankruptcy. We're just in debt and working on getting out of debt. We really have to go talk with them today. I've been a wreck since we got the phone call and the letter from collection agency.

 

Our savings account is practically depleted... maybe $4-500. in it for emergency use. My kids have their own savings account to pay their tuition and books. If push comes to shove and they insist on leaving it at collection agency, we will likely have to go borrow the money to pay this in full. If they force us to do that, I will close all our accounts and move on to another bank because this is just not right.

[G5052]

We perpetually have medical bills that we're paying on, and recently the local hospital turned one over to collection after they had told me over the phone that paying $50/month was fine. Thankfully I was down to less than $100 on it, and I was able to pay it off because I just got paid last week myself.

 

Before that though I called and spoke to a supervisor, and she confessed that the hospital has suffered some financial setbacks with the downturn in the economy (BTW -- this is a good hospital), and that now they are sending any bill that is more than 90 day overdue to collection even if the person has been paying on it. Now they do have a formal payment plan though, but you have to sign up for it with a formal agreement before the 90 day period and they do charge interest, although it's lower than a credit card. She apologized for the sudden change in policy. Basically they went from an informal, verbal agreement to not send any bill to collection that was actively being paid on to a formal agreement designed to get more bills paid. Not good, but I see their end.

 

I suspect that the bank is struggling and decided to do something similar by "calling" debts at a certain level on paper. Hopefully you can get some leeway locally, although from my understanding it's true that once a bill is turned over to collection, it's between you and the collection agency unless there's a mistake. :ohmy:

[jmgconner]

Do you have the agreement with the bank in writing? Unfortunately, they have every right to demand payment in full because you owe the debt. If you don't get anywhere with the bank (and I'm sorry, but I don't think you will), you'll just have to start at square one with the collection agency. Since you're on the Dave Ramsey plan, you probably already know that he has the specifics on to deal with them. Just chalk it up as a lesson in debt and another incentive to get you gazelle intense. :grouphug:

[KatieJ]

We had this happen to us one time. We had signed up for 90 days same as cash for new carpeting. The carpet company was unscrupulous and sold us flawed carpet and not enough to cover our floors without huge seams and lots of stretching and then it got worse..and ultimately ended up in a law suit, which was settled out of court. We got the loan company (They offered, we didn't ask) to sign an agreement to wait for their payment until we settled with the carpet company. In the mean time the loan company changed branch managers several times and each time we would get phone calls and letters that we were overdue. We could pull out our letter and tell them what was going on. Eventually they even sent our bill to collections, but our letter was enough to keep us from having to pay until the whole thing was settled.

[Amy in NH]

Twice now, dh has gone to the local hospital for a medical treatment. Both times, the insurance deductible has resulted in our having ~$500 bill. We don't have an extra $500 lying around, so I send in check for $25 with a letter stating that we will be able to make payment of $25/month until the debt is paid off. Apparently it is too much work for them to collect the check in the mail each month and apply it to our account, because they send the account directly to a collection agency (same thing happened to a friend, same hospital). The collection agency sends us a letter that they will be expecting the $25 each month. They send us a monthly bill with a remittance form, and apply our payments to the account. Because we are making a "good faith effort" at paying off our debt, neither the hospital nor the collection agency can sue us. They don't call and bother us, ever. We just pay our "bill" each month, and we're good. The first bill was finally paid off just before we incurred the second debt, and we were able to call the collection agency to get an itemized statement of our payments and a letter stating that the debt had been paid in full. These documents were valuable to us when we were applying for a home mortgage last summer, because DH had no other credit (literally no credit score), and we were able to use them to prove his "credit history".

 

It stinks that the bank did this to you, but I think you'll be able to just keep doing the same thing with the collection agency and it will be okay.

[Kay in Cal]

Banks are the worst... we're in the midst of arguing with ours about fees that we were "told" wouldn't be added, but were. I don't think we'll have much luck, so we are going to switch to another bank.

 

FWIW, I don't know if your bank is really a "local" one or a branch of a major national bank, but my sister in law (the banker) advised us to make sure all our money was in larger national banks. Only a few smaller banks have gone bankrupt thus far, but more will be going under as the year goes on.

[chiguirre]

Thanks for the link but we are not trying to declare bankruptcy. We're just in debt and working on getting out of debt. ....

 

Our savings account is practically depleted... maybe $4-500. in it for emergency use.

 

It doesn't matter that you're not trying to declare bankruptcy, they see money in your account and they'd like to seize it and apply it to your outstanding balance. Actually, bankruptcy is what protects you from that sort of seizure. They do need to get a judgement first, but the collections agency may be trying to expedite that precisely because they see you have a positive balance in an account in the bank that you owe money to. American law affords you some protection, in other countries your bank accounts would have already been used to offset your outstanding debt. Generally speaking, try to avoid keeping money in a bank you're past due with, whether or not you have an agreement (unless it stipulates you must maintain a certain balance).

[Nestof3]

We don't have an extra $500 lying around, so I send in check for $25 with a letter stating that we will be able to make payment of $25/month until the debt is paid off. Apparently it is too much work for them to collect the check in the mail each month and apply it to our account, because they send the account directly to a collection agency (same thing happened to a friend, same hospital).

 

That's because you actually sign a paper at the hospital agreeing to their terms of payment.

 

We owed over $4,000 after a procedure I had this year, so I called the hospital and asked if they had a payment plan. They said they like to see it paid off in a year. So, we are paying $363 a month for a year.

[Mamagistra]

I have no advice, but it's great to 'see' you, Board Fairy! :D :grouphug:

[Anna]

Thanks to all of you who posted suggestions and ideas. It seems that this is a case of the bank's left hand not knowing what the right hand was doing. We were working with a bank rep by phone who was telling us to pay the minimum of $50 a month. The people at corporate office had no clue that we were working with this guy or that the guy had put us on a "hardship" program. So corporate just up and decided one day to pull our account and throw us to the dogs (the collection agency). I'm still so ticked off I could chew nails!!!!!!!

 

This is dumb of me, I know, but I don't have the name of the guy who has been calling us by phone every 1-2 weeks. I talk to him so often and he asks me the same questions each time he calls. I never bothered to get his name. We never had a problem before now and we've been paying on this account per his instructions for the last seven months without a hitch. He said to pay $50 a month so that is what I've been doing. Each month I go to the bank with a payment of $50 and they put it on the account.

 

Today I ignorantly assumed that the bank would be able to find out where the calls were coming from so we could get his name and phone number. NOT!!!! We ran by two different bank branches trying to gather information to find out what happened. At the first branch they didn't even know the "hardship" program existed. When we got to the second branch a guy there knew all about it. We are now waiting for the bank rep to call me again so I can get his name so we can retrieve the records of our phone discussions. How pathetic is that???

 

Oh, and the guy at the second branch tells us--- "You can still make your payments here at the bank." I shot him a look and tell him (still trying to be polite), "But it's not our fault that our account is in collections. We don't want to be in collections. What is the bank going to do about this?" Apparently it all hinges on me being able to come up with the name of this guy who's been calling me.

 

I never realized businesses were run this poorly. I must be living in a dream world.:eek::ack2::angry::mad::cursing::banghead:

[elegantlion]

Sorry you are having to deal with this. That is why BANK is a four-letter word. :glare:

[Nestof3]

Anna,

 

It does actually sound like things are on their way to getting cleared up. I am sure they will get to the bottom of it. :)

[Anna]

You guys aren't going to believe what happened to me today.

 

I shared all the details about my dh and me stopping at the two bank branches yesterday. Well, today I had to run by the bank for my girls who are in college and have savings accounts there only this time, I went to a different branch than the other two. While at the bank today I ended up relaying to this bank officer, what happened with our account and how poorly the bank was handling it.

 

After viewing the account on her monitor, this gal quickly gets on the phone and knows exactly who to call to inquire about the whole mess. She was not only able to get the name of the guy who's been calling us, the guy we've been working with... but she was also able to explain to his manager what happened to our account. The manager took care of the whole thing. He's pulling it back from the collection agency and he told the officer to tell me that he "profusely apologizes for the mess up".

 

The bank officer advised me to follow up on the correction in about a week (I planned to anyhow) to make sure it all gets straightened out and she told me to feel free to call her if there is any more problem with this issue. I have her name/phone #, the name and direct phone # for the guy who's been calling us and I have the name of his manager. If all goes as planned, our account should be coming out of collections.

 

Can you believe it? Three bank branches later and it finally gets fixed. I'm telling you, this gal was the only one who knew exactly who to call. She was amazing. When she relayed the good news to me, I was almost in tears and told her, "Oh, thank you so much. I could kiss your feet!" She just laughed and told me, "This is the kind of thing that makes my day."

 

Again, thanks so much for all your ideas and support. These last few days have been so scary. Now I can breathe again. And we certainly will be following up to make sure that all gets done.

[Anna]

Bumping this just so those who responded to my "cry" for help, can read the outcome.

[PariSarah]

SO GLAD it all worked out, Anna!

 

Goodness gracious, those other guys must have been supremely incompetent!

[asta]

They aren't incompetent, they're bordering on insolvent. The banking industry, I mean.

 

Just this week, WaMu, a HUGE bank in Georgia started the process of going down the drain.

 

Two weeks ago, my bank (insert MAJOR national bank) took over a week to do a simple electronic funds transfer. When I called them on it, they hemmed and hawed, gave me the party line about "please re-read your electronic funds transfer agreement" blah blah...

 

I've been banking with them for twenty years. I have a butt load of cash in that bank. It was a small transfer that didn't require a hold. They just didn't want to do it because it involved transferring funds to a competing bank.

 

Magically, after a heated phone call, the funds immediately released.

 

The banks are scared.

 

 

asta

[tinag]

I am so glad that she was able to help you out. :thumbup:

How frustrating!

[threetreasurs]

Banks have always had a certain amount of time to do electronic transfers. I do taxes and run into this all the time. The federal government actually does release the refunds when they say they will.

 

But people that need to have the fees to do their taxes taken out of their refund can either get a check or a direct deposit through a bank. We quit doing the direct deposit through the bank because of the lag time. Some banks transfer the money as soon as they get it, but some don't which makes people fairly upset<G>!

 

Unfortunately, not a new practice.:confused:

[Anna]

SO GLAD it all worked out, Anna!

 

Goodness gracious, those other guys must have been supremely incompetent!

 

That's putting it mildly, Sarah. It's hard to believe that employees at two different bank branches could not solve this huge bank blunder that they caused. I had to go to a third branch before I got help.

 

An aside note-- From here on, we will be banking at the third branch from here on... the branch where I finally got help.

[Jean in Newcastle]

Oh I'm so glad you got competent help. I'd switch all my banking to that third branch, too!

[Heather in the Kootenays]

and I bet that woman would love a note to the bank saying what a good job she's doing.

[Sandy in Indy]

There really are a FEW nice people in the banking industry; I'm glad you found one of them.

[Anna]

and I bet that woman would love a note to the bank saying what a good job she's doing.

 

I'm one step ahead of you:001_smile:.

[Kris]

These last few days have been so scary. Now I can breathe again. And we certainly will be following up to make sure that all gets done.

 

What a frustrating experience! I'm *so* glad you guys got this worked out and you can relax. And it's great that you know who to talk to if something else happens. Whew!!!