Bank Of America Patents Method For Denying Refunds

Ah, innovation! Bank of America was just awarded a patent for a process that lets it make sure any teller at any branch will know not to give you a refund on a disputed overdraft fee. According to Techdirt, the idea is to prevent “refund shopping,” where a customer might visit multiple branches hoping to find a sympathetic ear.

Now, when a refund offer is “rejected” (their word in the patent description, though I imagine this applies to offers that are not extended to begin with, too), an amount of $0.00 is entered into the system as a processed refund for the customer. Then when he drives to another branch, the teller can instantly see that the discussion is over before it begins.

“BofA Patents A Way Of Denying Overdraft Fee Refunds” [Techdirt]

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  1. humphrmi says:

    Also patented: A system to ensure that untrained employees with poor customer service skills are the only ones that customers will ever interact with.

  2. radish01001 says:

    Glad to see they have their priorities in order.

  3. smartmuffin says:

    Seems reasonable to me. Is anyone going to deny that “give me what I want shopping among locations” not only happens, but is often encouraged and recommended on this site? All corporations have a responsibility to see that policies are uniformly enforced.

    • Loias supports harsher punishments against corporations says:

      I like your thinking – you are absolutely correct that companies should adhere to their own policies uniformly. But, in this case that won’t happen.

      Why? Customer A visits his closest branch first, and manages to catch an employee with “a synpathetic ear.” He gets the overdraft refunded. Customer B goes to a different branch first, and meets with an employee having a bad day. His refund is rejected. Customers tried Customer A’s branch, and is rejected outright because the system said he already tried.

      So, this in no way makes BoA act uniformly.

      • allstar3970 says:

        Maybe Customer A and B keep track of their balances and don’t overdraft? There are crazy situations of course that aren’t the customer’s fault, but I’d bet that comprises

        • Loias supports harsher punishments against corporations says:

          Not really the point of the conversation, but thanks for playing!

        • Evil_Otto would rather pay taxes than make someone else rich says:

          I thought it was finally considered out of fashion to blame the OP, especially in a discussion that doesn’t talk about the behavior in question directly?

      • smartmuffin says:

        Well, as long as humans are involved, you’re never going to get *true* uniformity of service. But at least this way, everyone only gets one shot. You can’t keep going to branch after branch until someone gives you what you want. Maybe word of mouth will spread and the most sympathetic branches will get increased business?

    • evnmorlo says:

      Some employees are jerks or idiots and won’t apply policies correctly no matter what. They only get $9/hour and show up every day so they are useful, but giving them the final say in customer service disputes is going too far. Of course BofA is probably mostly concerned with limiting the damage done by employees who are too reasonable and kind

      • Sammich says:

        You can likely still attempt to escalate any issue up the management ladder in those situations, but in cases where the employee applied the correct policy in the correct manner you can’t just keep trying locations to find the one employee who will make an exception for you.

      • Nigerian prince looking for business partner says:

        In those situations, it’s probably best to just speak with the branch manager. Front line customer service reps aren’t typically authorized to do much of anything, especially when it comes to reversing charges or refunds. As soon as they say “no”, it’s just easier to talk to the branch manager than it is to drive around town trying to find an agreeable teller at a different branch.

  4. WiglyWorm must cease and decist says:

    I would care, but we’re talking about a bank. You weren’t going to get the refund anyway. At best, half the money back (and a note never to refund anything again on your account), even in the event of clear bank error.

  5. dolemite says:

    Figures it would be Bank of America. Currently they are holding one of my wife’s paychecks hostage. Suntrust says they have disbursed the funds, but Bank of America insists they haven’t. So her paycheck has been sitting in limbo for going on 8 days now.

  6. Starrion says:

    Do they have a patented method for preventing customers from withdrawing their funds, closing their accounts and taking their business to a company that treats their customers decently?

    They should. Soon.

  7. mac-phisto says:

    hmm…i use a system like this every day already. it’s called a “note”. i “attach” it to an “account” & therefore future interactions are “framed” by the “information” contained within said “note”.

    when are we going to make a serious effort to reform the IP laws in this country?

    • dolemite says:

      Sorry, I already have a patent on “note”. You owe me .33 cents every time you use it!

    • tedyc03 says:

      Did you bother to read the patent application?

      The intent of the patent is to have the system automatically adjudicate the decision without giving the “sympathetic ear” the opportunity to override it. Having a note is nice, but only if the CSR actually follows the information in it; this will automatically handle the request and not give the CSR an opportunity to do anything.

      Whether this is moral or ethical is another matter entirely; I’m not commenting on that. But this patent application is a patent for an actual technical solution.

      • mac-phisto says:

        it’s an actual technical solution that already exists today – that’s my point.

        at this point in time, i can generate any number of reports on my members & their relationship with my institution. i can configure the server to allow/adjust dividends, loan rates &/or refund of fees based on those relationships & i can both provide that information to my front line staff as well as limit their ability to exceed predefined limits established by the relationship.

        the only novel part of the application, as i see it, is their plan to use the centralization of the information for market analysis. i’ve never seen that before. but the ability to provide decisioning based on a customer’s business has been available within relationship management tools for almost a decade. it’s so prevalent that my incredibly small FI uses it every day.

  8. JG2002 says:

    I always thought most banks looked at your account and saw if your acct was in good standing they refunded a fee every now and then. but if you are asking for them every month then they wouldn’t do it.

  9. paisley says:

    Here’s an idea… how about instead of investing lots of time “shopping” from branch to branch to get a refund for overdraft fees- spend that time keeping a checkbook register and accurate records of your own funds, instead. Its simple: know how much is in your account at all times, and do not spend more than you have. Its called accountability for your own actions.

    • Verucalise (Est.February2008) says:

      And when the bank makes a mistake and won’t refund you? What if they accidentally put a check thru for $800 when it was only $80, which causes mass overdraft fees? Now I’m not saying people shouldn’t be liable for their own mistakes… BUT the banks have gotten it wrong a time or two as well and I’ve read enough stories to see that even when it’s the BANKS fault, they don’t like to take blame.

      • JeremieNX says:

        I work for a bank and we have ALWAYS refunded as a result of bank or merchant error. It’s one of our most basic policies that the peons are taught on day 1. It doesn’t even require a manager to get involved as bonafide error refunds have their own procedure separate from courtesy refunds. The issue is, 99% of the time, it’s some mouth-breathing schmuck that overdrafts due to fast food and liquor stores all the time and when asked if they keep a checkbook register, they cop an attitude and refuse to take responsibility for THEIR own actions.

    • econobiker says:

      Something about those deposit / credit methods. Instead of crediting/debiting your account by time line (like in a check register) they debit the largest first and then down so it would slant in their favor that you’d bounce more items. However, some of the financial overhaul has negated the vast amount of overdrafts the banks could slam you with (to their profits) but it still allows them to screw with your account.

      The banks claimed it was customer service that people wanted their rent/mortgage paid before they paid for 5 transactions under $20 but a PBS Frontline piece on the inventor of this method showed otherwise- that it jacked up the bounced items volume to a very profitable level during the era of $29.99 to $39.99 overdraft fees per returned item.

    • fedupbs says:

      what a bonehead – thank god i don’t have to deal with you, heaven forbid …… banks never make a mistake.

  10. Buckus says:

    I’m going to patent a method to avoid Bank of America. This sounds like a procedural thing, and, as such, should not have been awarded a Patent.

    • Loias supports harsher punishments against corporations says:

      So what I was thinking.

      “We’ll devise a system whereas all our individual branches are connected electronically through a series of electronic information tubes. When data is collected on a customer, that data will be sent and available to all the branches via these data tubes. It will be a network…. nay, a web of interconnectivity. We’ll call it…. The Interbankwebz!!!”

    • kalaratri says:

      The Patent Office has a business methods department.

    • phrekyos says:

      35 USC 101 (US Patent law) states: “Whoever invents or discovers any new and useful **process**, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

      The very first US patent included a process claim. Something about converting potash… I don’t remember. Certainly not a business method, but it was a process.

  11. ldavis480 says:

    Ah, if there weren’t already a number of reasons to stay away from BoA here’s another.

  12. SPOON - now with Forkin attitude says:

    Obviously the patent isn’t for adding a 0.00 entry to the victim’s account. The patent is for Automatically adding a 0.00 entry to a victim’s account with each overdraft, therefore eliminating the pesky customer service practice of giving away the ban’s money to scofflaws.

  13. Mecharine says:

    Our patent system is so fucking broken.

    • Lord Percival Q. Pennyfeather, III says:

      Why? Because after reading the claims of this particular patent and conducting a proper legal and technical analysis (possible only with years of experience), you’ve discovered that at least one claim is not in compliance with Title 35 of the United States Code?

      Or is it because you just don’t like this particular idea?

  14. progrocktv says:

    This goes along with the patents of putting a goat on a roof, guessing how many kids are on a school bus & on-line catalogs. (seriously these are REAL)

  15. ca_little says:

    Hmm. Not sure I see this as a problem. People who have legit concerns should be able to get their refunds; people mismanaging funds and looking to cop a way out and doing nothing but increasing costs to the rest of us.

  16. ap0 says:

    I don’t really see why this is a patentable thing, but I can’t blame the bank for trying to be more consistent with their policies and developing a way to record that a customer refused a refund with the hopes of getting a better one elsewhere.

    The summary involves the assumption that this will also be applied to refund requests that are denied, but without any evidence of that. Great journalism. Consumerist could at least pretend to hold themselves to some sort of journalistic standards instead of getting people riled up with unconfirmed information.

  17. sopmodm14 says:

    awesome, i love how our “American” brands like, BOA and GM scam their customers, lol

  18. valthun says:

    I don’t really see a problem with this. If a bank or other company has reviewed the transaction and determines that a refund is not warranted, then they need to make a way so that all who look at the account will know that a decision has been reached. You shouldn’t be able to run from one branch to the next trying to get a refund when the bank already told you no.

  19. JMH says:

    Yeah, I don’t have a problem with BoA preventing refund shopping, to be honest, but the fact that the PTO allowed a patent to issue on what seems to be, basically, a placeholder transaction is pretty ridiculous.

  20. vitajex says:

    Wow! How NOVEL! Too bad my bank has done this for about 2 years…

  21. econobiker says:

    That they can patent this is the real crime.

    So I could patent the method of identifying customers’ tipping /attitude for pizza order entry logs: + for good tipper, – for bad tipper, @ for bad attitude, A+ for good attitude, etc

    • econobiker says:

      Therefore, I will now apply for a patent to store paper and coin money in a locked vault within a financial institution

  22. ellemdee says:

    I was charged a fee once (and only once) at B of A and a quick stop at a branch got the fee refunded almost before I even asked. Personally, I’ve had good experiences with B of A, but maybe I’ve just been lucky.

    My other bank recently converted to PNC and that’s been a hot mess. They changed peoples’ account numbers, raised minimum balances, and lowered the threshold for fees. When I called PNC, they wouldn’t even talk to me unless I could tell them which branch I opened my account at when I was a kid (so over 20 years ago), and they didn’t believe me even though I ID’d the correct branch. Their phone reps were surly at best and called me a liar when I recited some incorrect information that a previous PNC rep had given me. I stopped at a branch and the rep just kept wanting to do a hard pull on my credit “just to see which credit cards I qualified for then I could take my pick” instead of actually helping me. When I asked questions about their credit cards, she showed me some information, then took it back saying that I wasn’t allowed to take it home to read (even though all she did was print a page off of their website) and I shouldn’t worry about it because I would receive information once I actually received the card (no thanks). When I told the rep I hadn’t heard of their “Virtual Wallet” service, so got offended and said “Don’t you have a TV? We’ve been showing commercials”. Plus, I would have to open FIVE different accounts there just to get a similar setup (such as no fees) to the 2-account setup I have at B of A. She purposely kept me at her desk longer than necessary because she didn’t want to help the next customer (she said as much). It was a very different experience than what I’m used to at B of A (where I almost always receive good service) and the only time I’ll be returning to PNC is to close out my account.

  23. MNGirl says:

    Just another reason why I don’t have a bank account. i do everything in cash, money orders, or if really desperate, a Wal Mart Money card.

  24. Joseph S Ragman says:

    I wish BofA would just divide by zero, already …

  25. cheezfri says:

    That’s not patentable method, that’s a workaround! I oughtta have thousands of patents for all the workarounds I have to do in my jobs because my software sucks.

  26. huadpe says:

    Actually reading this patent reveals alot about BoA’s overdraft refund algorithm (assuming it’s not been changed since filing, which it probably has).

    If you have overdrawn by more than $3000 they will refund your overdrafts (but boy are you gonna be in for a headache).

    If you have not overdrawn before that year, they will refund all but one fee, unless you’re “private” or “premier” in which case they’ll refund them all.

    The algorithms for more than one overdraft day/yr get more complicated, and can be seen in Fig 3C and 3D.

    Really, the main feature they were patenting here is an algorithm for calculating exactly how much to refund you based on your history with them, and past profitability. The sending it to other locations feels more like an add-on, since it’s not even an independent claim.

    (I am not a patent attorney, but I do this for a living).

    The actual patent: http://www.pat2pdf.org/patents/pat7797212.pdf

    • zifnab0 says:

      You’re right, reading the patent does show us a lot about BofA and their system.

      It also shows that this patent isn’t about ‘screwing the customer’ as Consumerist suggests (not particularly surprising, given BofA’s reputation, but some honesty would be nice).

      There is at least one novel and nonobvious element to this patent, and that’s all that’s required under 35 USC 102 & 103. Instead of just issuing a refund, the patented system looks at the account holder information and makes an automatic determination.

      Of course, someone might wonder why this requires a request first, and doesn’t happen automatically.

  27. Conformist138 says:

    My most mind-boggling fee reversal refusal from BofA:
    I had an overdraft fee triggered by a deposit not being cleared before a charge. Since they had plenty of my money to begin with and were just holding it too long, I asked for a reversal.

    Teller: I cannot reverse any fees on this account.
    Me: This wasn’t my fault, I deposited money before the charge cleared.
    Teller: The charge cleared first, so you overdrew.
    Me: Then can we just call this my once-a-year courtesy reversal?
    Teller: I can’t reverse this fee because you had a fee 10 months ago.
    Me: That was my fault, I never disputed it, I just sucked it up. I’m asking you for a courtesy now because I don’t feel this was entirely my doing.
    Teller: I cannot reverse any fees because of the previous fees on the account.
    Me: So… not getting a reversal back then means I can’t have a reversal now?
    Teller: You can only have one courtesy a year, so you wouldn’t get a courtesy now.
    Me: SonOfA…