BoA: No Credit, Even For Rocket Scientists
If you have any lines of credit and you use them to manage your financial flow, you should evaluate your personal money matrix so you're ready in case all of them get cut. They're cutting lines of credit even for rocket scientists like reader Rocky. That's right, he's an engineer in the aerospace industry, has never overdrawn, never been late, never incurred NSF charges, and has 3 Masters and 2 MBAs. Overnight, they cut his four lines of credit. Apparently his only crime was simply having them. He called multiple times and got nowhere, only to be told to talk to a credit counselor. A credit counselor? Bank of America, he doesn't have bad credit, he has no lines of credit because you just cut them all. His story, inside...
Rocky writes:
I am writing this letter to state unequivocally the damage that is being inflicted upon not only this citizen, not only this economy, but every honest and hardworking individual in this country that has, for the past months, and continues to be, held hostage by the Banking Industry of this country.I like many who have been impacted have had all credit lines blocked, or closed. Not because I have ever overdrawn the accounts (I haven't), not because I have ever been late for any payment (I haven't), not because I have ever incurred NSF charges in any account in any bank (I haven't).
I am being held hostage, and have effectively had all of my accounts frozen or locked. I have (or the better word would be had), overdraft protection on my primary checking account, which is with Bank of America. This overdraft line is used as a lifeline by me to balance out obligations when I need to use it. It is routinely flat lined (zeroed out), every 60 to 90 days max. With no warning whatsoever, this account along with three other lines of credit with Bank of America has been locked. I have called Bank of America, and spoken with numerous account managers, all to no avail. Just to get this line unfrozen. On my last call, I was advised to contact a credit counselor.
I always have, and continue, to handle all of my credit responsibly, and the fact they (BOA) could find no late payments, and all payments were substantially over the minimum required, and all accounts have been continuously reduced, was of none of their concern.
I now state something that is an undeniable fact that is presently going on in this country as I sit composing this letter. The Banks in this country are not part of the problem, they are the problem. There are undoubtedly millions of small business men and women such as myself, who have worked hard to build up good credit records so they may have access to credit when they need it, but have had credit lines, and financing needed for their business frozen, locked or terminated.
The Banks in this country, particularly Bank of America are forcing millions of Americans into involuntary bankruptcy. I write this letter, not for myself, as I am not there yet, but I see the pain on the faces of many of my fellow citizens who I know are.
To add insult to injury, one line that I have used that did have a 5% rate, has jumped to 24.99% while simultaneously being locked. When I called Bank of America to see about reducing this rate for the remaining balance, I was read their standard script that there was nothing less available. Again, as I have stated previously, the Banks in this country (Bank of America) in particular are contributing in a large way to forced involuntary bankruptcy and default of millions of American citizens.
When credit will loosen up, is no longer the question. I fear the real question we must now come to grips with is IF credit will loosen up. The brutal truth is I can see no hope if Banks are allowed to punish responsible productive individuals and businesses with financial strangulation. They have clearly become so fearful of giving bad credit out, they now give NO CREDIT out. These Banks need to watch "It's a Wonderful Life" until THEY get it.
I am employed in Engineering by a major aerospace company, and I will very soon have my third Masters Degree and my second MBA. You don't have to be a rocket scientist to be able to figure this out, but if it was required, I qualify. In addition I have a second business and am a Licensed Real Estate Broker. In spite of the downturn in the Real Estate market in Arizona, I would be able to weather this economic storm if only the banking industry would be reasonable, but along with credit these are two commodities that are in short supply these days.
Respectfully,
Rocky W.
(Photo: jurvetson)
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Comments:
I'm guessing the MBAs are what set off an alert - I wouldn't trust an MBA with any credit...
Consumerist: We can always find SOMETHING to blame the victim for™.
Perhaps the issue is using overdraft protection as a regular line of credit?
I'm just curious as to how locking, removing or denying credit will get these banks and credit companies out of trouble. Especially when dealing with good customers. Is it their purpose to actually lower their profit so that they can get *more* government bailout money?
I can see limiting credit to people with poor credit that can't pay it back, but a majority of these stories where companies double or triple interest rates or lock credit lines concerns people with average or very good credit. How is this good business?
Great letter.
No, the issue is how bad BoA's balance sheets look. I suspect if this consumer goes to a different bank- perhaps even a regional thrift over a national chain if possible- he will receive a different experience.
Seriously, the comments from this story are about his education? That makes me sick.
@smythe: Why not? Is it any of your business? Did you just make this uselss comment because you're envious and had nothing else to whine about?
Hello People: Credit Unions.
That is all.
@smythe: Sigh. The obvious answer would be that the MBA was useful to him to understand the business side of the industry - you know, the people who oversee the money and budgets. It's not like you're qualified to run NASA just because you're a rocket engineer...you have to understand the business. Obviously since he's an engineer, he has got the science side down. The MBAs are a way of understanding the financial side.
I wish I had two MBAs.... or even one for that matter.
At least I have a job.
@nataku83: Combine that with moonlighting in the Real Estate business. The guy is ticking financial time bomb.
Great, and I have two cards with BofA and I hope they don't get locked, but they are both pretty well maxxed, So I'm a great customer in eyes of the credit industry, and a bloody fool in the eyes of everyone else on main street
BofA called me last week and told me the same thing...
My BofA card has had a zero balance for almost a year, and much like him, never a missed or late payment, and always over minimum...
I asked if I could do anything about it, and the rep on the other side said no, it wasn't up to me and this was out of my control.
@conquestofbread: Content wise, yes. Random capitalization of banks, engineer, banking industry, not so awesome. I'm such a nitpicker with that, I know. There's just no reason to capitalize banks unless you're naming a specific bank (like Bank of America).
My favorite line was:
"You don't have to be a rocket scientist to be able to figure this out, but if it was required, I qualify."
Bank of America recently offered me a credit limit that was about twice what I have now when I called up to pay by phone. Being a little shocked and confused at this offer I politely refused. The CSR asked me if I would like the offer mailed to my house anyway so I could look it over, which I agreed to.
Any explanation for this act of largess?
I mean - this is just silly. Why does anyone need four lines of credit? Something is off.
That said - BoA is the devil and I am in the process of closing all of my accounts with them. Sweet, sweet day.
He's right. It seems that, while moving to fee-based income and ultra-complex investment strategies, the large banks have forgotten how to provide the basic functions our society relies upon.
In my extended family, the only lines of credit that have remained unharmed are with local banks.
If the big guys aren't interested, should there be a nationalized set of basic banking functions?
Small & local is looking better all the time.
@RStui: Credit Unions rock, but that doesn't help the millions of people and business that up until now, have primarily relied upon banks to for their credit needs.
The one common thread I see is that B of A doesn't seem to be making a whole lot of money off this guy. Maybe they are axing the accounts like his in favor of people who routinely carry a balance?
They did this to me too, except it was a new card with 6 times the limit I'd had previously. That was about three months ago.
I think this guy is likely a heightened risk for some reason - it might be the fact that he is incurring overdraft protection so often. Yes, he has a "good reason" for it, but to the bank it looks like irresponsibility.
I'm not sure why his education is even relevant to this, other than to toot his own horn. Further, he should understand that he's not being punished for being a good customer, he's being punished because there are a lot of bad customers that are killing the banks by not paying what they owe, usually because they overextended. Doesn't he remember when he was in school and the whole class was punished because a few kids were being bad? Yeah, that's what's going on. I too have to question the frequent use of overdraft protection as a simple line of credit. I'd expect an MBA to be able to concoct a slightly better financial structure.
Am I missing something? He says he never overdrafts his accounts, but then he says he used his overdraft line on a regular basis. Overdraft lines aren't meant to be used as an account to be dipped into like that. That's exactly why B of A froze his credit cards, I bet. To them, that looked like very risky behavior. Unless I read that wrong? Credit card companies have been acting very sketchy lately, but I think this is one case where they may have had cause.
Err... I hate to say it, but if I was a banker, and routinely had a customer drawing on his overdraft line, I would want to drop him like a hot potato too.
An overdraft line is not designed or intended to be a revolving line of credit. It is designed to help you avoid bounced check fees if you end up on the wrong side of a check float.
Routinely drawing on that line tells me that somebody, despite all those fancy degrees, cannot balance their checkbook.
If he wanted a "lifeline" and new he was running low on funds, he could have drawn a cash advance from his credit card or used a "signature" line of credit with the bank.
So wait - he uses the overdraft protection every 2-3 months?
I need to hear more about this story, and I don't really care about his education. Some of the most brilliant people I know are emotionally and socially stunted. They don't give an MBA in people smarts.
@thegirls: That's the point: if people started shunning the banks, they would either change their ways or not have any customers left.
@legwork: "Small & local" - Exactly my experiences. Local banks are the remaining strength. They have money to lend because they have lent responsibly in the past.
Small & local, and Credit Unions!
Someone who regularly invokes their overdraft protection is going to look like a bad risk to the bank because if he can't even manage his money properly now when he has a job and can play the bills, what will happen if for some reason he loses his job or gets hit by a car and ends up with a gigantic hostpital bill?
@nakedscience: Pot, meet Kettle. He is black too.
Perhaps smythe was curious, like his comment reflected. I too am curious as to why a person needs 5 Masters degrees. I see a story like this and, while I hate BoA just as much as the next guy, I really would like to know the reasoning behind it. It is an interesting subject and, as a fellow life=long student, I would certainly not mean to be rude by asking it.
In reality, what are these comment sections for? How many stories have we heard about poor customer service on this site? How many stories about banking issues have we heard on this site? How many stories about poor customer service when dealing with banking issues have we heard on this site? It comes down to people emailing Consumerist with a story, Consumerist posting the story, and then us reading it. After reading the stories, we are left with questions and/or thoughts. Using a comments section allows us to voice those questions and/or thoughts. Our hope should be that we can find feedback on what we post without being disemvoweled or having people talk down to us for being the curious sort we are.
Perhaps you can save up all of your useless comments and post them in your own blog about consumer affairs. After you have done that, you can set your comments section to require admin approval before any posting. That will make you happy!
Has he checked his credit report? Maybe someone is running up fraudulent charges without his knowledge and BoA sees it and makes the decision to freeze his accounts. I know *he* doesn't think he's ever gone over limit or missed a payment, but maybe that a-hole who stole his credit card info did and now he's paying for it.
You can have 2 MBAs and 18 PhDs but that doesn't mean you're going to check your credit report regularly.
@smythe: Wow, this deserved a disemvoweling? I think the poster was really just asking a question (a question I sorta wonder about also).
What has happened to the OP, as he has already pointed out, has happened to thousands or millions of others... with one exception:
"To add insult to injury, one line that I have used that did have a 5% rate, has jumped to 24.99% while simultaneously being locked. When I called Bank of America to see about reducing this rate for the remaining balance, I was read their standard script that there was nothing less available."
Nope; sorry BofA, but that's not legal. The OP needs to call them up and dispute this aspect. If all of his credit accounts are with BofA, and assuming that nothing negative has recently appeared on his report (has he checked since this has happened?), BofA is the only party that can answer why they've done it.
But even if they stick to their guns on closing the accounts, he's got a minimum of 30 days *after being notified* (which it sounds like was recently) in which to either accept the new terms of the agreement or decline them. If he declines, the APR goes back down to the original rate and the account is closed with a balance. Not ideal from a credit perspective, but it's better from a financial perspective. Plus, when he declines the terms, HE is the one choosing to close the account, not the bank. That also looks better on his credit report (not as good as it would if it had a $0 balance, but still better than if the bank closed it), and he should make sure the bank reports it as closed per customer's request, not per the bank's decision. If they balk at reverting the APR back to its original rate, gently remind them that the Fair Credit Reporting Act (and Bank of America's own terms, for that matter) requires them to give adequate notice before changing the terms of the agreement, and also requires that the customer be allowed 30 days from that notification to decide whether or not to agree to them. They're breaking their own rules, as well as federal law, if they do anything else.
Frankly, I think he's talking to the wrong folks. Rocky, you may wish to call Executive Customer Relations, e-mail one of these executives, dropping them a line on Twitter or using one of the other methods that the Consumerist has reported on in the past.
Don't forget to update us on how it goes. The best way to track which method has the best result is by aggregating the results of stories like yours. Good luck!
@aedude01: But having 2 MBAs is redundandt. It's like saying you have two bachelor degrees in the same major. What's the point?
What does he mean by "lines of credit"? Credit cards? Home equity? Personal line of credit? I understand one of them is overdraft, what are the other 3? If he has an overdraft line which he regularly uses as a cushion, he shouldn't really be surprised when the bank questions his ability to plan his finances.
@sirwired: Right. Okay, not just me. I know a lot of people tent to start looking at that overdraft protection as just another credit line after awhile, figuring they're paying it back, so what's the problem? But that's not good, especially from the bank's point of view. It's still overdrawing on the account.
I have one BS and I would just go somewhere else. If BoA doesn't want you as a customer when times are bad stick it to them when things get good by never doing business with them again.
@pecan 3.14159265: That's unrelated to the fact that he has 2 of them. One alone would be sufficient for your reasoning. Two is redundant.
@I speak Jive.: I assume it was for the unnecessary snarky-ness and irrelevance to the overall issue.
Why, again, does someone get "two MBAs"? This seriously seems like a self-fluff piece.
Three masters, maybe, depending on their subject matter...but "two MBAs"????? I also agree with the other commenter...why in the world is he using his overdraft protection every 60-90 days, if he is such a well educated and adept, contributing member of society?
@GothamGal: A.) You get sick too easily.
B.) The comment that got disemvoweled that started the the main discussion above was why he had 2 MBAs, not why did he have 5 Masters. It seemed redundant and definitely stands out since you almost never here about someone having 2 MBAs.
@smythe: you beat me to it