BoA Reopens Credit Card Closed 10 Years Ago

At Bank of America, your accounts are Buddhist. As in, undergoing “eternal return,” where accounts that have been closed and passed on will reemerge, rejuvenated, reopened, even if you closed them long, long, ago. Reader Chip writes:

I recently moved to a new home and called Bank of America to notify them of the new address. A few weeks ago, I received a “replacement” BoA credit card. This confused me greatly, because the only account I have with them is my checking account! On top of that, the card said I was a member since 1998. That was my first year of college, I only had one card back then, and I was so annoyed by that company (which was not BoA), I canceled the card after only a few months.

Once I finally got in touch with someone useful, we worked out that somewhere in the course of various bank acquisitions, they ended up owning my closed account. So for my convenience, they were kind enough to reopen my closed account. I immediately had them close the account, but I really did not like this experience. The credit account had been closed for almost 10 years, and they reopened it without any direct involvement from me.

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  1. Coelacanth says:

    Very strange… however, it doesn’t sound like it impacted your credit score too much (actually, it probably helped it a little, unless it was recently reopened.)

    It also sounds like they were fairly straightfoward in helping you resolve your issue.

    That is exactly the opposite experience I’ve had whenever dealing with BofA credit accounts.

  2. P41 says:

    Consider yourself lucky it had nothing to do with a charge they decided to put on it. Or that it wasn’t stolen and the bank assumed that when you asked to have it closed, you really meant “increase the limit to allow buying lots of things that can be sold quickly on the street”.

  3. Lucky225 says:

    Sounds like some mix up with MBNA probably

  4. Fly Girl says:

    BofA does a lot of things for “my convenience” that aren’t really convenient at all.

    I opened a BofA account for travel purposes– I travel internationally a lot and my only checking/savings account has always been with my local credit union. However, when I’m abroad, it’s not always easy to do financial transactions through my CU.

    With that in mind, I opened a free BofA checking account to use ONLY while traveling abroad. Before a big trip I’d transfer my trip money into it and use my BofA debit card to access cash while on the road. The rest of that time the account would sit EMPTY, no money, no action on it, nothing.

    A few months ago, I was beefing with Clearwire (another post for another day). I didn’t want them to charge me for services that the weren’t providing me, but there was no way to remove my credit/debit card from their website without replacing it with another one. (Part of the Clearwire deal is that it’s on a contract basis and you HAVE to have auto-pay. Total BS.)

    So, genius that I am, I think I’ll be really slick and put the BofA card number in there. No money in the account, no charge, right? Right? Wrong.

    Another month goes by and I’m real proud of myself, thinking that I totally got one over on Clearwire. And then I start getting calls from BofA, telling me that my account has been closed for an outstanding $100 overdraft. WTF? How is THAT possible?

    I get on the phone and they tell me that my account was overdrawn on X day by Clearwire in the amount of $70. I asked them why, if there was no money in my account, they allowed the transaction to go through. They informed me that it was for “my convenience.” And, for “my convenience,” they also charged my account a $30 overdraft “convenience” fee. Riiiiiiiiiiight. Thanks, BofA, for making my life more “convenient!”

    So, Clearwire has money that I didn’t want them to have for services that they weren’t providing and now I owe BofA $100 on an account that I don’t use and is now closed and in collections, thereby damaging my credit. AWESOME!

    (And, yes, I know that as a good Consumerist, I should have been monitoring my checking account even though it had a zero balance to check for unauthorized activity… I was naive enough to think that if there was zero available dollars then there was also zero ways that money could be leaving my account, authorized or not… Boy was I wrong.)

    • parad0x360 says:

      @Fly Girl: Why didnt you do a chargeback to get the funds back and then have them reverse the overdraft fee? If this company wouldnt let you stop paying them then you have every right to fight back.

      • Fly Girl says:

        @parad0x360: Well, BofA had already CLOSED my account when I realized that they’d paid Clearwire, overdrawn my zero balance account, and charged me a fee for the “convenience.” Doing a chargeback, with BofA, on a closed account was going to be more headache than I had time for.

        I’ve since resolved the beef with Clearwire, which involved making them give me my money back– including the money that BofA gave them without my consent– and dropping my contract.

        I paid BofA the money, since I ultimately got it back from Clearwire, and I paid them their stupid overdraft fee so that it didn’t hurt my credit. But the closed account ding is one that’s just gonna stick, ’cause BofA won’t take it back.

        They just don’t care, BofA, they’re terrible. I filed a formal complaint with the state, and they weren’t surprised when it was BofA that I was complaining about, but it seems like no one is willing to throw the book at ‘em…

        • Stile4aly says:

          @Fly Girl: Actually, I work for the claims division of a major bank. Doing a chargeback on a closed account is quite simple, and it would have saved you a lot of hassle.

          Now, here’s how Clearwire was able to collect your funds even though the balance wasn’t available. When you sign up for a recurring service with a merchant they obtain an authorization through Visa (or Mastercard) for the original charge. When a transaction is preauthorized, the bank cannot refuse the charge when the merchant comes to collect the funds. So, you had a dispute with Clearwire and tried to prevent them from collecting by zeroing your balance, but they used that old authorization to force that transaction to post. The bank could not refuse it, and because it posted to an account without sufficient funds you were charged a fee.

          Had you completed a claim then you would have gotten back the amount of your debit plus the fees.

          Now, here’s another issue. This was an issue over services not being rendered. In order to sucessfully charge this type of item back to the merchant the bank would need confirmation of what you were supposed to receive, why you don’t feel you received it, and what efforts you’ve made with the merchant to resolve it. The only way a chargeback can be completed is if you truly didn’t receive the merchandise and the merchant is unwilling to assist. If, however, the merchant states that they provided the service and you merely weren’t satisfied, then that’s not a claim-related issue and it purely becomes a he said she said between you and the merchant, into which the bank cannot insert itself.

          With regards to the OP, this almost certainly was the result of an old card that was acquired by MBNA, and then BofA that accidentally got turned back on during the merger and the various technology integrations. From the sounds of this, no harm no foul. I appreciate it’s not pleasant to find that an old closed card isn’t closed, but it doesn’t sound like it was a scheme designed to hurt you in any way.

        • TheNerd says:

          @Fly Girl: We’ve had this problem before: a $35 “convenience” charge for less than a dollar overdrawn buying a stick of gum. Good thing if you complain many banks will undo one for you. With most people it seems like it’s the little charges that get them, not the major ones. Now we keep a bit in savings for overdraft protection, just in case.

          @Bahnburner: Did you keep the letter? Even a record of the check may be good enough proof that they had told you that you owe them no more. Also be sure to have the copy of your credit report that shows “paid and closed”. As for whether they “can” arbitrarily re-open the account, we all know it doesn’t matter to them – they’ll push the limits of the laws way past the breaking point for a bit of cash. You could probably take them court and claim they’re harassing you and making your life miserable.

          • Bahnburner says:

            Thanks TheNerd! Yes, I have the letter, the check stub and a copy of my credit report, along with a mail stub for the letter I sent to them telling them the account is closed.

    • LoriLynn says:

      @Fly Girl: I thought it was standard operating procedure for banks these days to let most anything go through unless you jump through their specific hoops to tell them to decline charges? They say most people don’t want to be “embarrassed” by getting told they don’t have enough money in their account. I’d venture a guess that that’s probably how they make much of their profit.

      As for the OP, that stinks. But that card would have given you quite a long credit history which is a plus on your credit report, no? But the fact that they just did it sounds like a big mistake.

  5. cubsd says:

    Sounds like they want you to run up some charges.

  6. 310Drew says:

    @Fly Girl

    If you authorized clearwire to charge you monthly, then why would you think they would stop just because there is no money in your checking account ? The company billing you does not know what you have in your checking account, all they know is you authorized them to draft the payment or charge it to your debit card.

    If you would have read the small print in all the disclosures on your checking account, it clearly states that if a retailer has your correct account information the bank will assume it is something you want to be paid so for “your convienence” they will let it overdraw your account, since you did authorize the retailer to charge you monthly.

    Also, a closed checking account does not hurt your credit, nor will it appear on your credit report, as it is not a credit account. It may be reported to Chexsystems or another company that banks use when opening up accounts, and may have affected your ability to open an account with another bank in the future. Theory is if you don’t pay one bank, why would the one across town want your business?

    On that same topic, I would also like to know how you planed to do a chargeback on something that was not charged to a credit card. Unless I’m missing something in your story, you said it was a checking account. Even if you used a debit card with a visa logo, it’s still not a credit card, and you cannot do a chargeback.

    I personally think you need a crash course in banking, and many, if not all of these problems could have been avoided if you would have understood what you were doing.

    • quitcherbichinn says:

      @310Drew: actually that isn’t true. i have a BofA account and i’ve had to do a chargeback. that’s why the visa logo and number is associated with the card…you get the convenience and protection a cc would get. when an unauthorized charge happens, you go to the bank and the bank sets up an “investigation”…during that time they issue a temporary chargeback until the “investigation” is completed. at the end the chargeback is finalized and the case is closed.

      fly girl….you could have easily prevented this. if the company wouldn’t stop auto-withdrawls the way you should have done it is…attach it to the BofA account THEN reported the card lost/stolen…BofA would then block that debit card number, issued you a new card with a new number…and when clearwire tried to charge the closed debit card number they would have been denied and you wouldn’t have been charged anything. i’ve gone through this and that was how it was done. with online payments you screw yourself because once you give permission to charge once they can charge whenever they want even if you’ve since denied them the right. the only way to truly stop it is to report the cc or debit card lost/stolen so the number is frozen and a new account number is given.

      • Fly Girl says:

        @quitcherbichinn: Damn. That’s a good point. I didn’t even THINK of that– see, people! This is HELPFUL commenting!!!

        (Although, from what we’ve read about BofA, I’d have to wonder if they wouldn’t still just let that charge go right through, despite the fact that the card was reported lost/stolen. Seems like allowing charges of all stripes is BofA’s MO.)

    • Fly Girl says:

      @310Drew: I’m glad you think you’re so smart, because you’re wrong on all counts! But, really, truly– I appreciated the condescending lecture about my need for a “crash course in banking.”

      I never said that I was planning on processing a chargeback for the Clearwire transaction. I said, in response to another poster (who asked me why I DIDN’T do a chargeback), that I didn’t even want to go there with BofA and that, instead of taking that route, I fought Clearwire and got THEM to refund the money– and to let me out of my contract.

      Regardless, you’re wrong. I have done about FIVE chargebacks, each and every one of them on the Visa debit card issued by my credit union. There is NO credit line associated with that card– it is nothing but a checking account debit card with a Visa logo. Each and every time my credit union has sent me a Visa-branded dispute form and has immediately issued me provisional credit, each and every time I have gotten my chargeback honored and every single penny credited back to me.

      I know that the closed BofA checking account doesn’t go on my credit report but the amount that they sent to collections DOES. When you owe someone money, and it gets sent to collections, they can (and do!) put in on your credit report. I check my credit report every three months and the last time I checked, it was there. It shows as a debt satisfied, but it’s still there. Uglying up my credit report.

      I entered into a one year contract with Clearwire when they FIRST started, thinking it would be a cool way to get my internet. They promised me that if it wasn’t what they said it would be, I could get out of the contract hassle-free. In that contract, I agreed to automatic monthly payments. That was the ONLY payment method offered– I would have preferred to enter my payment information manually every month, but Clearwire didn’t offer that as an option.

      I tried using the Clearwire for several months, but the speed wasn’t anywhere CLOSE to what they said it would be. It was *Scout’s Honor* slower than dial-up. Every time I would call, they’d transfer me to “technical support” who would ask me to, like, carry the receiver around to different corners of the house to test which corner might have the best reception and to start and restart my computer a million times.

      They were completely unwilling to admit that it was just their service and that their internet just SUCKED. I kept reminding them that the contract isn’t valid if they’re not providing me with the service that was promised, but they kept saying that I “needed to give them a chance to fix it” and that I couldn’t get out of the contract until I had “tried everything.”

      I was frustrated and tired of waiting and I needed internet that worked. I went and got new internet, actual high speed internet, so while I was fighting with Clearwire, I was paying for TWO ISP’s. Complete bullshit. I’d finally had enough towards the end of a billing cycle. There was no way I was going to give them another penny of my money (especially not another $70), but there was no way to remove my credit card data from their website without putting another number in its place.

      I called my credit union and asked if I could preemptively put a stop-payment on any attempted charges by Clearwire. They told me that they didn’t have a way to do that, but that I could file a chargeback (hey! a chargeback on a debit card!) after the fact. I wanted to avoid that trouble so I swapped out my active checking account with an inactive, empty checking account.

      What I THOUGHT would happen is that when Clearwire attempted to charge my card it would be declined and that not getting their money would be an incentive to work things out with me. After all, why would the let me off the hook for my contract or actually fix my internet when they get $70 from me each month no matter what?

      What ACTUALLY happened is that when Clearwire attempted to charge my card, BofA gladly approved the transaction AND tacked on a fee of their own. Gee, thanks, BofA!

      I do NOT think it’s acceptable to assume that a bank will approve charges when there is no money in the account. Perhaps I’m just spoiled by the professionalism and fiscal responsibility of my credit union, but if I swipe my debit card and input my pin and try to spend money I don’t have… MY CARD GETS DECLINED. They say “NO.” It’s not rocket science. No money = no charge.

      What happened to banks declining cards? When did that change? Why, when Clearwire tried to charge my card, didn’t they say, “Gee, sorry, Clearwire. There’s no money in this account… Try again some other time.” And don’t give me the “I’d approved them to do it monthly” crap, because I have Netflix and that’s tied to my credit union checking account. If there’s no money in that account, I get an email from Netflix saying that my card was declined and that I need to update my payment method.

      The only reason that BofA approves overdrafts is because it’s a money-maker for them– fees like that are huge revenue sources. Why decline a charge when you can make a quick and easy $30 off of it?!

      And I DID read through the small print on my BofA checking account. It disclosed that there were overdraft fees, and in what amount, but it did not say, ANYWHERE, that I needed to ask them to please not allow my account to be overdrawn.

      Shouldn’t it work the other way around? Didn’t people used to pay extra for features like “overdraft protection?” Aren’t attitudes like this part of the reason that America is drowning in debt? How is allowing overdrafts and charging exorbitant fees much different than the loan-sharking of payday lenders?

  7. bwcbwc says:

    Botched data feed from the original account-holder to BofA, I bet. One consolation: It’ll be a really long time before anyone is big enough to acquire BofA’s credit card business.

  8. Trai_Dep says:

    …Don’t mess with the Buddha. That Jesus fellow, sure, he came back. Whoopee. But once. Just once.
    :)

  9. Chongo says:

    I cancelled a BOA card a couple years ago and just recently started receiving statements…

    Is there any negative things about this other then the fact that I have an open account I did not want? I mean, does it affect FICO, etc?

  10. Sarcastikate says:

    I recently did a routine check on the 4 credit agencies just to check things out (OK – well, I was a little overdue in doing so). Listed there was an open account for $15,000 with a bank name I can’t recall, but it was initials I never saw before in my life. No current balance, but I panicked nonetheless. I Googled the initials, and it turns out to be connected with MBNA somehow. So I called them and turns out it was a credit card that I thought was cancelled about 8 years ago, and it had been bought and sold numerous times. I cancelled it. We all need to be diligent about checking with the agencies periodically. I know I will be. I also saw that my previous boyfriend (who moved out because I wouldn’t finance his real estate pie-in-the-sky dreams) had run my credit through a building lender, and this will stay on my credit for 2 years – and yes, it does affect my credit score. Interesting…

  11. oldheathen says:

    Cool image. Is it an ouroboros or something else as there are two creatures depicted, anyone know?

  12. Expanding Buttocks says:

    I just opened a second checking account with BoA. They decided I needed a second savings account too… even though I specifically said I didn’t need/want it. Hmmmmm… interesting.

  13. Fly Girl says:

    Also: I apologize for my long ass comment and hijacking the thread.

  14. vastrightwing says:

    I had the same thing happen with Amex and a timeshare company. After I had buyers remorse, I could not get the timesahre company to stop charging my Amex account. The only thing here was that claiming my card was lost/stolen only posponed the monthly charge for a month until the timeshare company somehow figured out my new card number. Amex CSRs tried to help me, but in the end, I stopped paying my acount and ended up in collections. I still refuse to settle the debt for fear that the timeshare company will re-open my account if I ever get back into good standing. Now I have a real reason to fear this.

  15. Caveat says:

    I knew a couple who closed their BofA checking account and after 6 years dumped their old checks in the garbage. Someone found the checks and started using them. BofA reopened their account and then started pulling money from another active checking account to cover the fraudulent checks.

    As far as credit cards, I have posted before that you should NEVER give a real credit card number to any entity that has recurrent charges such as a utility company. Citi for one offers virtual cards that expire in a month and are basically one time use. Of course you have a regular credit card, but you can easily generate as many virtual cards on the internet as you need, and any company that tries to charge twice against the virtual card will be out of luck.

  16. Cliff_Donner says:

    Clearly, Chip (the OP) is a vigilant consumer and pro-actively shut down this situation before any significant problems — I love this guy.

    But I think I’ve seen this situation as a recurring problem — a borrower thinks he’s done all the necessary steps to shut down a credit account, but for some reason the lender continues to issue credit on behalf of someone who has specifically said they no longer want credit issued on their behalf.

    So, I’m asking, when I’m shutting down my account, if I send this letter (via certified mail), have I covered my bases?:

    Dear BoA: As of today, I am cancelling my credit card account. As of today’s date, I will not be responsible for and will not pay any charges that any vendors bill to this account. If BoA chooses to pay any vendors who bill this account after today’s date, they do so with the understanding that I will not be reimbursing them for these charges.”

    Obviously, my language here could be better tweaked.

    And yeah, really, what I’m saying is — Consumerist — you’ve identified a problem here !! — thanks! — please tell me the best way to shut down a credit account so it cannot “ressurrect” itself.

  17. calchip says:

    One thing that a lot of people don’t know is that, under Federal law, banks are required to simply decline debit (or even Visa debit) transactions when there aren’t adequate funds *IF* you request them to do so… however, the staff and even branch managers at Bank of America will often be unaware of this requirement, or even if they’ve heard of it, they’ll have no idea how to do it.

    10+ years ago I’d set all of my Bank of America accounts to decline any debit card that were attempted when there weren’t adequate funds. I even called back a couple times to confirm it was set this way. This worked perfectly for a very long time and then, one day, I got an “automated debit” from a provider for a $75 charge I did not authorize, against an account that had maybe $5 in it and BofA paid the charge, overdrew my account, and charged me $30 or something for the privilege.

    Even the less-than-worthless “Customer Solutions” department (formerly the “Executive Customer Service” department) swore that they did not have any way to “turn off” auto-payment of overdrafts, there was no way I could have ever had such a service, and there was nothing I could do.

    Finally, I reached a rep who had been with the bank for almost 20 years. She said “Oh, I know what you’re talking about, it’s called “Pay No NSF.” I can turn it on for you, but I have to warn you, if I turn it on, it means that if you ever write a check with insufficient funds, it will be returned, we will never pay an overdraft as we normally do.” Since I never write checks and never have overdrafts, it wasn’t a problem.

    My guess is that to “serve us better”, BofA probably turned off all of the “Pay No NSF” switches for all custmers that had previously had it turned on when they switched to their new in-branch banking system a couple years ago.

    Since I had the rep turn it off on all my accounts, I’ve never since had a problem.

    But leave it to BofA to tie the ability to occasional pay an NSF check (which people might want) to the Federally-mandated requirement to be able to decline debit transactions when there are insufficient funds (which no one would want.) Typical sleazy BofA move.

  18. Bahnburner says:

    I have my own case on a paypal buyer credit account which i closed with a $25 credit back in June.

    They sent a letter telling me they closed the account, along with a $25 check and they notified the credit bureaus the account is “paid and closed”.

    Now, they say that due to an error (which they admit is theirs) I owe them $500. My position is, “sorry about your mistake, you shouldn’t have closed the account and notified the credit bureaus.”

    My question is, can they arbitrarily re-open the account and lay waste to my credit report that shows “paid and closed”?

  19. nrosetulip says:

    Fly Girl:
    I actually appreciate the detailed explanation. These things are ALWAYS convoluted and it can be easy to assume that the company will have the details and sort it out for you. I’ve been put through ringers with cell phone and phone companies and airlines and had to keep logs to keep the details straight.

    Also, PayPal now has a little widget that will generate a one-time use credit card against your paypal acct, which is based on actual funds (not credit). I’ve used it a few times and I like this secure stop gap between a vendor and my paypal acct and/or other verified funding sources.

    Last, I think FlyGirl is DEAD ON about the automatic payment from your acct to be able to charge you the fee… I once had a First Union (now Wachovia) rep tell me that I received 5 $30 overdrafts because their software treated debit transactions as both a debit and a credit txn (double hit the acct and then charged me). Once she explained it I had to go through two supervisors (and several hours on the phone) to get those $150 of my very scarce money back. Happily I have a temper that suits just these occasions… anyhoo. It’s pure greed and the hope that joe consumer will simply give up in his attempts to recover his money.

  20. lordargent says:

    Fly Girl: what you did was essentially the same as writing a bad check.

    [en.wikipedia.org]

    • Fly Girl says:

      @lordargent: No, I didn’t enter my payment information on the site and say “PLEASE PAY NOW.” On Clearwire’s website, there is a user profile. It has information like my address, my phone number, and my credit card information. There was NO WAY to remove my credit card number from the website. I told them repeatedly, via email and over the phone, that I was NO LONGER PAYING FOR THE SERVICE and that if they attempted to charge my card, it would be without my permission. To protect my money, I swapped out cards. Despite everything, Clearwire charged my card anyways. That is, in no way, similar to writing a bad check. Would it be like writing a bad check if I had purchased a Visa gift card, spent everything but a few pennies, and entered that number on my payment profile? What it was was Clearwire running an unauthorized charge on my account and BofA approving it, despite the fact that there was a zero balance. That’s not like me writing a bad check, that’s like Clearwire STEALING and CASHING a bad check.

  21. JiminyChristmas says:

    I had a very similar experience with BofA recently. I’ve had a credit card with them for several years. Sometime within the past year or so the card expired. They sent me a new one before the expiration but I never activated it because I rarely used it.

    One would think that if a card were expired, and the new one was never activated, nothing could be charged to the account. Well, you would be wrong. About a month ago I ordered a refill of a prescription for my dog through my vet’s office. I place this order about once every 14-16 months. Rather than contact me for payment information, or bill the vet and have them pass through the charge, the pharmacy billed my BofA card without a current authorization from me. They had kept my account information on file (For over a year?!?), charged my card, and BofA approved it.

    So, I’m left wondering what exactly it means to not activate a card. I assume it means someone couldn’t pick up the card, take it to a store, and buy something. But apparently, if you’re a merchant it doesn’t work that way.

  22. theczardictates says:

    When you ask a CC company to “close” an account, they don’t take it to mean what “closed” means to you or me. They often treat it more like “temporarily quiescent” — and that’s how these supposedly closed accounts can magically get reopened years later (and why they still have your details on file after 10 years).

    The magic jargon you NEED to know is “hard close” as in “please show this account as a hard close” or “please hard close this account”. If you do that, it should be really closed, and not show up again.

  23. bbb111 says:

    This can happen with a MERCHANT account too. I recently got a call from a collection agency for unpaid fees from a merchant account for a business that closed over eight years ago (and I had closed the merchant account myself carefully following the instructions in the contract). The account had resurrected and started incurring fees with statements sent to the old business address. Fortunately, it was an in house collection agency and they were actually somewhat helpful after I explained the situation. I called the the credit card processing company and they claimed that I had requested that the account be reopened. The first level of supervisor investigated and a few days later called to admit that they had no authorization from me, a mistake was made and they voided the account with an assurance that the account was now permanently closed. Yes, they made a mistake, but they were actually competent at investigating and fixing the error. I wish financial institutions for consumers would be that competent.

    -=-=-

    As for banks processing transactions even if you instruct them not to, I checked with four banks trying to find one that would block third party initiated transfers (not the bank’s bill pay service which is initiated by the account holder). All four said that they would not block it, but I could dispute the transaction after it happened. They all said they would refund any overdraft fees. But, when I pressed them for details, they admitted that they would not pay any bounced check fees from others (the overdraft protection has a limit – they will eventually bounce checks. Also, they won’t tell you what that limit is in advance.)