The charges stem from a $30 gas charge that came through on the account after he closed the account. The bank is piling on the charges and Royal's new bank is reacting by closing his account. He writes:

I closed my account with Wachovia/Wells Fargo on 9/2/09, receiving the total balance of my checking account from the teller. About a month later I received a bill from Wachovia for $60.

Apparently a charge came through a day after I closed my account (Shell Oil, $30) and because my account was closed with no balance they charged me a $30 NSF fee. I went into the bank to dispute the NSF fee, and they teller told me that due to them having to put me in Cheksystems I now owe a total of $101.70. My current bank CalNational (just taken over by US Bank) is telling me that they are closing my account.

Do I have any recourse? Small claims court? Please help.

Any suggestions on how Royal can get out of the mess he got himself into by closing the account before it was totally reconciled? For while Royal is responsible for starting the chain of events, the fees are harsher than the infraction deserves.

(Photo: nmmercer)

I signed up for Wachovia's Way2Save program, which gives you 5% interest on your savings the first year. You can only deposit $100 a month into the account. The only other way to put money in is by account activity (paying bills, etc). So I scheduled a lot of $1 bill payments to my credit cards every day to try to get as much money in the savings account as possible.

Wachovia put a temporary hold on my checking account without telling me. There was no phone call, email, or online notification. So imagine my horror when I got emails from their billpay service saying they couldn't withdraw the money from my checking account and were reversing the bill payments. I had deposited several hundreds in cash (in person) into the checking account, so I knew it couldn't be because the funds hadn't cleared. And the bill payments totaled only around $200 anyway.

When I called, it turns out that Wachovia had put a temporary hold on my checking account, freezing the funds. No one was able to explain why, but they said the hold was gone. They weren't able to stop the payments from reversing.

The end result? My credit cards are charging me over $5000 in reversed payment fees (150 reversed payments * $39 average per returned payment, you do the math). In particular, Chase has canceled all my cards because of the multiple returned payments. I called my Chase small business card account, and the specialist at Chase said they could not do anything, or even waive *some* of the returned payment charges, unless I could get Wachovia to send a letter saying the returned payments were the result of bank error.

I called Wachovia, and they refused to do anything. Their stance is that it was not a bank error because I scheduled the bill payments, not them. There were no notes on my account (because I had talked to someone in bill pay, which apparently is a contracted out service, not part of their own system). They had no record of any hold on the account, and even if there was a hold, it wasn't their responsibility because I had scheduled the bill payments myself. They also mentioned deposit availability, though I pointed out that I had deposited cash. I'm going into a branch on Friday, but I don't think they will write anything for me either.

I haven't called the other credit cards yet. I'm dreading calling my other credit cards to see if they will waive anything. So in the end, I am stuck with this fiasco. At least Christopher's problem was caused by the same bank charging him the fees. They have the power to waive the fees. What happens when the problem is caused by a different bank, and that bank won't help at all, not even write a stupid letter?

I hate Wachovia. I don't have problems with it if the problems were caused by my scheduling bill payments, and there wasn't money in the checking account. I do have problems when the checking account says I have several hundred dollars available, I had deposited more than enough cash to cover the bills the previous week, and there is NO notification that a temporary hold had been put on the funds. How is that my fault and not the bank's???

Do you have any EEOB-type email addresses I could possibly use to write to the service departments at Chase, Bank of America, Discover, Amex, and Citibank?

Or any advice on how to handle the situation? Ways I can convince Wachovia to write the freakin' letter? Or am I stuck sucking it up?

The wildest thing about this is the idea that Wachovia would have no record of the minute-to-minute status of your accounts, including your deposits and when funds became available. You should go into a Wachovia and have a nice long sit-down with someone there, where you both go over the account item by item if necessary, until they have to admit that there is not a single reason those payments should have been reversed. After all, if they don't have a reason for—or even a record of—placing the hold, it should be easy to determine that you always had the funds necessary to cover your payments.

For now, keep this with Wachovia. It's on them to correct their mistake, and to provide you the necessary evidence you need to get your other creditors to reverse the charges and re-open those accounts. Unfortunately our Wachovia contact info is getting pretty dated (although now there's a Twitter contact), but maybe you can get somewhere if you EECB Wells Fargo. (Tell them you're a dirty telemarketer who wants to rip off old people and they should prick up their ears.)

For other Wachovia customers, you might want to find a less dangerous way to save your money. Tying it to bill payments is pretty risky, and you don't have to have an exceptional case like Susan's to wipe out your gains—a single error, whether by you or Wachovia, could easily do it.

(Photo: suburbandollar)

"But you accepted the other 3 much larger checks that were typed in black, and signed with blue ink...", I offer helpfully.

"But I can't accept this handwritten check", she answers "because of the two different ink colors".

"So, no one can write me a blank check?" I ask. "Or if they do, I have to find a typewriter to fill in the amount?"

"We need to prevent fraud." she explains.

Big mistake.

"Are you implying that I might attempt fraud?" I ask after picking my jaw up off the floor. "Look at the account balance" I instruct. "It is several thousand times the amount of the check I am depositing. This is nonsense - let's get your manager over here."

The branch manager slides up trailing the unctuous slime of someone who will grovel to placate, but never look one in the eye and directly address a concrete issue. The conversation ambles around for a bit, without any progress toward connecting a small messy check with the reality of a customer with significant deposits and a long track record. Apparently, my "admitting" that the check was signed by our treasurer, and the amount filled in by me makes matters somehow "worse". I guess I might have lied and claimed that his pen ran out of ink, but I am not a skilled liar.

Let's see, if the check turned out to be fraudulent, Jim would have legally been responsible for it, and the bank could have repaid itself out of his account balance. If he attempted to withdraw his entire balance—which Jim says was "several thousand times over the amount of the check"—the bank could have sounded an internal alert and postponed the withdrawal until a supervisor could sign off on it. But somehow it made more sense to offend a long-term customer by inconveniencing him and implying that he was a criminal.

Jim figured out a simple workaround:

"Never mind", I say after getting nowhere fast for about 2 minutes. "Your bank WILL accept this check, and thank me for my deposit, too. Just watch."

I then deposited my check with no problem at all - steps away over at the ATM, which I had noticed being serviced by an armored truck on prior visits.

The machine thanked me nicely in its usual pre-programmed way. I waved to the branch manager, and cheerily suggested that he "have a nice day".

The best advice I can offer to those who wish to commit check fraud against Wachovia Bank is to purchase a typewriter. The best advice I can offer to honest customers of banks staffed by unthinking automatons who refuse to allow reason to even color their blind obedience to the latest customer dissatisfaction initiative is even simpler. Deposit such checks via the ATM machine located only steps away from the uncooperative employees. The check was credited to my account the same day, and the ATM did not insult me with any implied accusations.

(Photo: kb35)

rickb928 writes:

The only novelty here is that the error got into production, and was not caught and corrected before it went that far.

Submitters send files to processors which are supposed to be formatted according to specifications.

Note I wrote 'supposed to be'.

Some submitters do, from time to time, change their code, and sometimes they get it wrong. For instance padding a field with spaces instead of zeros. Woopsie...!

Seems that's what happened here. Sounds like a hex or dec field got padded with hex 20, and boom.

This is annoying, especially when the processor gets to help correct the overwhelming number of errors, and then tries to explain that it wasn't their fault. Plenty of blame to go around with this one.

And then explains why they don't both validate/sanitize input, and test for at least some reasonable maximum value in the transaction amount. A max amount of $10,000,000 would have fixed this. That and an obvious lapse in testing. This is what keeps my bosses awake sometimes, fearing they will end up on the front page of the fishwrap looking stupid 'cause their overworked minions screwed something up, or didn't check, or didn't test very well. I love one of the guys we have testing. He's insufferable, and he catches genuine show-stoppers on a regular basis. They can't pay him what he's been worth, literally $millions, just in avoiding downtime and re-working code that went too far down the wrong path.

Believe me, this is in some ways preferable to getting files with one byte wrong that doesn't show up for a month, or sending the wrong data format (hex instead of packed binary or EBCDIC, for instance) and crashing the process completely. Please, I know data should never IPL a system. Tell it to the architects, please. As if they don't know now, after the one crash...

If you knew what I know, you'd chuckle and share this story with some of your buddies in development and certification.

And pray a little.

At least it didn't overbill the cardholders by $.08/transaction. That would suck. This is easy by comparison. Just fix the report data. Piece of cake. Evening's worth of coding and slam it out in off-peak time. Hahahahaha!

Nothing to see here, keep moving along please... [Slashdot] (Photo: Ballistik Coffee Boy) (Thanks to Toland!)

PREVIOUSLY:
The $23 Quadrillion Meal
The $23 Quadrillion Pack Of Cigarettes
Unruly Teen Charges $23 Quadrillion At Drugstore

23 Quadrillion Dollar Bill [KXAS]
PREVIOUSLY: The $23 Quadrillion Pack Of Cigarettes
Unruly Teen Charges $23 Quadrillion At Drugstore

Berks County Recorder of Deeds Frederick C. Sheeler doesn't understand why the bank didn't protect the Shoemakersville site from tax sale.

"I found it to be incredible that the bank can let property worth a couple of hundred thousand dollars just go up from under them and not preserve the assets of the account holders, the stockholders and the money the government put into Wells Fargo," Sheeler said.

The tax collector for the county told the paper that she was surprised Wachovia ever let it go so far: "They (the notices) basically threaten them that if they don't pay, eventually your property could be sold. People usually pay attention."

"Tax woes spurred closing of Shoemakersville bank" [Reading Eagle] (Thanks to Ed!)
(Photo: skyliner72 and Webdesign-guru.co.uk)

Oh, it also comes with an enrollment in some sort of identity theft protection program for $13 a month.

Looks like Wachovia (a Wells Fargo Company) is now taking its lead from a singing pirate. Just in time for your post yesterday on the CARD Act and its impact on "free" credit reports, I recieved the attached letter from my bank, asking me to simply attach a sticker and return the mailing in the enclosed prepaid, already-addressed envelope to get a Free Credit Report! What could be easier!

Naturally, upon reading the fine print, one finds this little doozy: "Unless I call to cancel during my thirty-day trial, my protection will be automatically continued at the $12.99 monthly credit monitoring fee, or then current monthly fee, debited from my primary Wachovia checking account each month, without my having to do anything further."

Granted, it's all laid out for you relatively clearly in the small print, but how is this any different than what FreeCreditReport.com is doing? And why is my bank selling my personal information to a third party for the sole purpose of shadily trying to get me to sign up for a "credit monitoring service" of dubious value? This stinks. The only reason I've stayed with super-inconvenient Wachovia while living in New York City is out of loyalty - I used to work for them - but if this is the way they're doing business now, screw 'em.

We know why they're doing it—because there's still a lot of confused or ignorant consumers out there who either don't know about annualcreditreport.com (the only real source of free credit reports), or who see the phrase "free credit report" and stop looking for alternatives. The sticker gimmick seems particularly silly, and aimed at customers who have an "I just won a contest!" mentality when it comes to offers in the mail.

We don't know if offers like this one will be covered under the CARD Act, because Wachovia does make it quite clear that there's going to be an ongoing fee after the first 30 days. It's nowhere near as misleading as the FreeCreditReport.com commercials, in other words.

That doesn't change the fact that if you really want to pull your credit reports for free, annualcreditreport.com is the only place where you can do it.

In the follow-up e-mail, he wrote:

I wrote yesterday... Please don't publish, as Wachovia handled it with grace once I got to higher power. Tweeted Wachovia's Twitter account and within five or six hours someone from president's office contacted me and refunded the [NSF] fees.

I'd be happy if you'd publish an item noting how responsive they were. While it would be nice if I hadn't had to go to the trouble, the bank does deserve kudos for listening to and responding to the story.

The challenge lies, of course, in reaching that higher power. I recommend meditation, fasting, and intensive customer service ninja training.

Another customer service Twitter account recently reported to Consumerist: Qwest Communications (http://twitter.com/TalktoQwest)

(Thanks, Mike and Josh!)

Option-ARMs are so risky that they are illegal in many states — and offer payments that are so low that they don't even cover the monthly interest. This results in a mortgage that actually grows over time.

60 Minutes' whistleblower says that World Savings was "packaging" (their name for falsifying documents) loans in order to approve as many people as possible for risky mortgages. Their motivation was allegedly the huge fees that the bank and its mortgage brokers collected for processing each loan.

Maeve-Elyse Brown, a lawyer for a non-profit group working to save homeowners from foreclosure, says Betty Townes' actual income was about $1,875, but that the income written on her loan application was over $4,000.

Asked who did that, Brown told Pelley, "The interviewer that's listed is a staff person for World, for World Savings, according to the loan documents."

"What does that tell you?" Pelley asked.

"Looks like whoever typed up this document put in the number that they thought was the right number to get the loan approved," Brown said.

"The term was 'packaged.' It had to be packaged correctly when it got to the underwriter," Bishop told Pelley.

Bishop says a story like Betty's was common at his former office.

He says facts were manipulated on some loan documents to get past company underwriters who approved the loans. "You know, let's not say this. Let's delete these items that they're probably not gonna check on. Let's add this. Let's just move it around."

"Packaging the loan meant modifying [the loan]…to make sure it would pass the underwriters' inspection?" Pelley asked.

"Correct. It was one grand wink-wink, nod-nod," Bishop said.

60 Minutes says that World Savings' option-arm portfolio has now lost over $36 billion.

World Savings denies that there was any fraud or irresponsible lending at the bank.

World Of Trouble [CBS]

Be sure to read our Ultimate Consumerist Guide to Fighting Back, a go-to handbook for the dissatisfied consumer. Once you've decided to go the executive customer service right, be sure you read this first so you know what to say when you call the corporate avatar of your choice.

The Consumerist Executive Customer Service Index

ACS
Adelphia
Air Tran
Alamo
Alaska Airlines
Allegiant
Aloha
Amazon
America West
American Airlines
American Express
Amtrak
Apple
ATA
AT&T
AT&T Wireless
Bank of America
Barnes and Noble
Bell Canada
Best Buy
Blizzard
Blockbuster
Blogger
Bloomingdales
Blue Cross/Blue Shield
British Airways
Borders
Busey Bank
Buy.com
Cablevision
Charter Communications
Chase
Circuit City
Citibank
Comcast
Continental
cox
Delta
Direc-TV
Discover Card
Dish
Disney
Ebay
Enterprise
Equifax
Experian
Fedex
Frontier Airlines
Fry's
Gamefly
Geek Squad
Georgia Power
Helio
Home Depot
Humana
HSBC
IKEA
ING Direct
Insight
Keybank
Lenovo
Loew's
Macy's
Microsoft (and Xbox)
Midwest Airlines
Motorola
National City
Nicors
Northwest Airlines
Norton
Office Depot
Office Max
Orbitz
Paypal
Pitney Bowes
Qwest
RCN
Regions Bank
Register.com
Ryan Air
Samsung
Seagate
Sears
Sirius
Skybus
Sony Ericcson
Spirit Airlines
Sprint
Sports Authority
Staples
Symantec
T-mobile
Target
Time Warner Cable
TransUnion
Uhaul
United Airlines
United Health Care
UNUM Life Insurance
UPS
US Airways
US Cellular
Verizon landline/DSL/Fios
Verizon Wireless
Vonage
Wachovia
Walmart
Washington Mutual
Wells Fargo

In the event you can't find the info you are looking for here, you can scan our backlog of contact info, or use Google to uncover the addresses yourself. In the event you find something we don't have, feel free to share at tips@consumerist.com.

Researched by Alex Jarvis
Last updated: 11/07/2008

The Times says that if Wells Fargo is successful in a deal with Wachovia, it would elevate what is essentially an overgrown regional bank into a national player.

A deal with Wachovia would elevate Wells Fargo to a prime position in the American banking industry, with the largest nationwide deposit and branch franchise in the country. Together, Wells Fargo and Wachovia will have $1.42 trillion in assets, 48 million customers and 280,000 employees.

The combined bank will be present on both coasts in the fastest-growing markets, playing on the same field as JPMorgan Chase and Bank of America, two of the nation’s largest banks.

Wells Fargo Wins The War For Wachovia [NYT]

``There is a point at which the FDIC will take Wachovia over if they are concerned about the stability of the bank,'' said Christopher Whalen, managing director of Institutional Risk Analytics, an independent research firm in Torrance, California. ``But as long as Citi and Wells will extend support to Wachovia, they have time.''

To end a legal skirmish, Citigroup may agree to take Wachovia's branches in the northeast and mid-Atlantic regions, while Wells Fargo would get the Southeast and California branches, as well as Wachovia's asset-management and brokerage units, the Wall Street Journal reported, citing people familiar with the situation.

Bank officials and FDIC spokesman David Barr declined to comment. Cable network CNBC reported that Citigroup was bidding for all of Wachovia. Citigroup spokeswoman Shannon Bell didn't immediately return a call seeking comment.

A ruling over the weekend that said Citibank had the exclusive right to negotiate a takeover with Wachovia until Oct. 10 was overturned yesterday.

Wachovia is in trouble after acquiring a lender that was heavily invested in "pay-option" mortgages, a type of risky loan often given to people with good credit, but who are not required to provide documentation of their finances. "Pay-option" loans can actually grow in size because borrowers are allowed to pay less than the accruing interest.

Citigroup, Wells Fight May End by Splitting Wachovia (Update4)[Bloomberg]
(Photo: So Cal Metro )

UPDATE: Now the block has been blocked! Madness continues apace.

Citibank previously teamed up with the FDIC to pick off Wachovia's banking operation for $2.2 billion. Four days after the deal was announced, Wells Fargo loaded up the stagecoach, buying Wachovia as a whole for $15 billion. The FDIC shrugged its shoulders, glad not to have pay $42 billion to secure against losses, and let Wells Fargo proceed with the takeover.

Citigroup raised the stakes in the merger battle on Saturday afternoon, asking Justice Charles E. Ramos of New York State Supreme Court to issue an emergency order blocking the deal between Wachovia and Wells Fargo.

Representatives from the banks met at Justice Ramos’s home in Cornwall, Conn., late Saturday afternoon for more than three hours of oral arguments, according to people briefed on the situation.

In the unusual weekend session, Citigroup presented Justice Ramos with a 16-page complaint naming both Wells Fargo and Wachovia, and their boards, as defendants. But it has not yet filed the suit formally because the courts were closed.

Late Saturday, after several hours of intense legal jockeying, Justice Ramos issued an injunction effectively blocking the Wells Fargo deal, pending a hearing scheduled for Friday.

Wachovia hasn't seen the judge's order yet, but that didn't stop them from debasing Citibank's lawsuit as nothing more than a "pointless legal maneuver."

Wachovia customers can sit back and feel loved. Your accounts are safe, and for the moment, your banking experience will remain the same as it ever was.

Citigroup Says Judge Suspends Wachovia Deal [The New York Times]
Citi: Wells Fargo blocked from buying Wachovia [AP]
PREVIOUSLY: Giddyup! Wells Fargo Rides In And Steals Wachovia From Citibank!
(Photo: So Cal Metro)

The announcement came just four days after Citigroup had agreed to buy Wachovia’s banking operations of Wachovia for $2.2 billion of about $1 a share. But Wachovia, which is based in Charlotte, N.C., has now rejected that deal in favor of one where the entire company would be acquired. How Citigroup will respond to the news remained a question Friday morning.

In a statement, Wells Fargo, which is based in San Francisco, said that the deal required no assistance from the Federal Deposit Insurance Corporation or any other government agency.

Under the old deal, the FDIC agreed to guarantee losses above $42 billion in exchange for stock and warrants worth about $12 billion, says the NYT.

As far as the mortgage meltdown goes, Wells Fargo didn't take the risks that many other banks did, and are therefore in a good position to acquire Wachovia. It also did not have a big investment bank, so was spared the recent investment banking bloodbath.

Wells Fargo in a Deal to Buy All of Wachovia [NYT]
(Photo: So Cal Metro )

My brother went to the bank last Friday to talk to the branch manager about his situation which I emailed you about 2 weeks ago. The bank reported the check as fraud, not my brother. His account was cancelled because it was opened with a bad check, and he was charged $10 for depositing a bounced check. There was nothing that was entered as a negative mark on his credit report, and the case is pretty much closed.

The manager even went so far as to type up and sign a memo explaining that it was not my brothers fault and that there should be nothing against him on his credit report.

The Wachovia branch manager also offered to open a new account for him.

So, phew! None of the bad things that could have happened to Fred's brother actually happened, like:

• The bank could have pressed fraud charges against him.
• He could have been reported to the FBI.
• A report could have been sent to Chexsystems and made it hard for him to get a new bank account or keep his new one.

PREVIOUSLY: Always Look A Gift Check In The Mouth (Photo: Getty)

PREVIOUSLY: 10 Banks That Could Be Next To Go Under (Photo: knightraven)

We love it. It's like the Worst Company In America Contest, but for real.

September Madness [TechCrunch](Thanks, Fuzz!)

(Photo: epicharmus)

Part of Wachovia will remain independent — including its massive brokerage business which ballooned after it purchased AG Edwards in 2007, as well as its Evergreen investment management division.

Soon, we will all be Chase or Citibank customers.

"Citigroup to buy Wachovia banking assets" [CNN] (Thanks to humphrmi!)
(Photo: hyku)

Dow Jones reports that those of you waiting to hear more about those option-ARM, "pick-a-payment" or "pay-option" loans are going to be happy:

Wachovia, like WaMu, has a troubled mortgage portfolio and faces its own uncertain future. Saddled with a mountain of troubled adjustable-rate mortgages inherited through its 2006 takeover of Golden West Financial Corp., Wachovia has seen its financial condition weaken and its stock price plunge. Former Chairman and Chief Executive G. Kennedy Thompson was ousted earlier this year.

Both WaMu and Wachovia have taken big lumps from writing a mountain of so-called option-ARM loans, or adjustable-rate mortgages that allow some homeowners to actually increase their loans' balance by paying less than the full monthly interest they owe.

Option-ARM loans have quickly become notorious for showing high rates of delinquencies and foreclosures. Many option-ARM borrowers have increased their loan balances even as the value of their homes fell, leading many to stop making payments or walk away from properties altogether as their homes were worth less than what they owed on the mortgages.

Wachovia recently held more than $120 billion in such loans, a central driver that has led the firm to raise capital and slash its dividend.

Not too long ago the CEO of JPMorgan Chase had this to say about the coming wave of Option-ARM loans: "The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is quickly building." He added that the losses on these mortgages, which were given to people with good or excellent credit, will be “terrible.”

Wachovia shares sink, down 45% for week [Chicago Tribune]
(Photo: epicharmus )

This post has info for the regular bank exec customer service team, and this is contact info for their CEO.

(Photo: epicharmus)

Morgan Stanley Considers Merger With Wachovia [NYT] (Photo: foundphotoslj)

"It is really frustrating for us," Garcia said. "The bank is not doing anything about it. (It's) just not giving us any solutions at all."

A Wachovia representative said it will not refund any money because it can't verify the $1,000 in counterfeit notes were the same bills Garcia was handed by their teller.

But weeks later, Wachovia did refund $40 to another customer with a similar story, Local 6 has learned.

Garcia said Wachovia is ripping him off and has alerted the sheriff's office, the Secret Service and the media.

"Ten (bills) in one transaction to come from one bank, that is definitely unusual," U.S. Secret Service representative Jim Glendinning said.

"But is it possible?" Pipitone asked.

"Remotely, yes it is," Glendinning said.

Bank of America caught the fakes when the couple tried to deposit the money into their account with that bank. The Secret Service agent speculated that if the fakes did come from Wachovia — it was likely that an employee was in on the scam.

Bank Gave Counterfeit Bills, Couple Says [Local 6](Thanks, Becky!)

"These bottom-line results are disappointing and unacceptable," Chairman Lanty Smith said in a statement. "While to some degree they reflect industry headwinds and weaker macroeconomic conditions, they also reflect performance for which we at Wachovia accept responsibility."

Hang in there, Lanty.

Wachovia loses $8.9B, cuts 6,350 workers, dividend [BusinessWeek]

"The Board believes new leadership will help to revitalize and reenergize Wachovia and enable it to realize its potential," said the excellently-named interim CEO Lanty Smith.

Ken will now join Citibank's Charles Prince, and Merrill Lynch's Stanley O'Neal at the failed CEO pool party.

From CNNMoney:

Wachovia's woes, however, have only surfaced recently. In mid-April, the nation's fourth-largest bank reported a surprising first-quarter loss of $350 million - hurt, in part, by its ill-timed 2006 acquisition of California mortgage lender Golden West Financial Corp.

Shortly thereafter, the company drew the ire of its shareholders by announcing plans to raise $7 billion in capital through a stock offering and to slash its quarterly dividend by 41%.

Thompson defended the actions at the time, saying the capital raising was done to gird the company's balance sheet against a protracted downturn in the housing market.

The news only got worse last month when Wachovia restated its losses. The company said its losses were, in fact, closer to $708 million following a review of its life insurance portfolio.

Meanwhile, it looks like Kerry Killinger, WaMu's CEO, is gonna need a bigger boat. The company said it would split the role of chairman and chief executive...which is exactly what Wachovia did to Thompson before dropping him.

Wachovia CEO out at board's request [CNNMoney](Thanks, Evan!)

The money-transfer businesses, or casas de cambio, are commonly used by people in the U.S. to send money back to family members in Latin America, but the Justice Department suspects the popular businesses are also used by drug traffickers to shuttle money from U.S. drug sales to drug cartels in Mexico.

"Internal emails and documents filed in federal courts in Miami, Chicago and New York describe former ties between Wachovia and money-changing firms," the Journal said.
 
It said Miami court documents show that US agents have seized over 11 million dollars in 23 Wachovia accounts that belonged to the Mexican chain Casa de Cambio Puebla. US authorities suspected the money was the laundered funds of a drugs syndicate.
 
The probe into Wachovia is part of a larger investigation into money laundering by drug cartels through the money transfer firms that involves both US and Mexican authorities.

"Wachovia probed over drug-money laundering: report" [AFP]

RELATED
"Wachovia To Pay $144 Million For Bilking "Gullible" Seniors"
(Photo: Adam Cole)

Under the scam, telemarketers called unsuspecting seniors and pretended to update their Social Security or insurance information to knock loose private financial details. The scammers then used that personal data to write themselves $142 million worth of unsigned checks, which Wachovia gladly cashed.

Upon learning that one scammer's account received 4,500 complaints in a two-moth span, one Wachovia executive wrote in an email: "YIKES!!!! DOUBLE YIKES!!!! There is more, but nothing more that I want to put into a note."

Though Wachovia did not admit or deny wrongdoing, the investigation found that Wachovia, one of the country's largest banks, engaged in unsafe practices — failing to conduct suitable due diligence, failing to monitor accounts used by telemarketers and failing to follow normal procedures that would probably have uncovered the thefts.

The bank's actions were "part of a pattern of misconduct" that resulted in Wachovia's collecting millions of dollars in fees, regulators wrote.

Wachovia has agreed to pay a $10 million fine, contribute $8.9 million to consumer education programs and make restitution to victims that could top $125 million. In a statement, the bank said this "situation was unacceptable and we regret it happened."

Disturbingly, the government hasn't tackled unsigned checks, the root cause of this pernicious scam.

In 2005, attorneys general of 35 states urged the Federal Reserve to end the unsigned check system. But the Federal Reserve demurred.

"We really need these unsigned checks to be prohibited completely," said Mr. Miller, the Iowa attorney general. "There's still a lot of work to be done."

John doesn't know how the account was opened without his permission, but the former bank manager did have the relevant information needed to open an account. John writes:

We are a startup company that is currently out doing a Series B raise in order to commercialize a product we have in-licensed. The bank manager from our current bank left to join Wachovia. We were always happy with his service and we were not surprised when he contacted us and tried to get us to switch our banking to Wachovia. We indicated that the current timing was not good due to our financing. What we did not know was that he took upon himself to open an account for the company "in order to ensure certain money rates". Boy were we surprised when we got a $12 fee for being below the minimum balance requirements. We joked that as a startup it was nice to know that our "future bank" would be more than happy to take our last $12 as a fee. We contacted our banker friend and he said he would close the account. We are now up to $24.05 in fees and a collection agency has called. Needless to say Wachovia will not be getting our business.

(Photo: epicharmus)

The first email, from randombob:

When I was in the military at a young age, I had no credit. Best way to get it? Get a credit card and start proving you're credit-worthy. Armed Forces Bank (AFB) was willing to get me started with a $500 limit. Cool. Well I'm good with money, and eventually my credit got good enough that credit companies trip over themselves to offer me cards with good rates/benefits, and that card rarely got used. However I kept it around because at least with the old FICO scores (not sure about the new ones), your "oldest" credit line played a part in the figures.

I say "kept" as past-tense on purpose. Today I cancelled with them. I track my finances, and pay off every month PLUS some, so that I typically have enough money sitting with them that I don't accrue finance charges (billing days are 30, grace periods typically 25 days, so I leave a credit balance of enough to cover a weeks-worth of charges). No different with this card. Only this time, I paid off only a little over what was due, paid a round figure that put me a little into the black with them (81¢). According to the next statement, they agreed, and I didn't use the card again for 6 months or so, ending last week. Well since we were in agreement as to my balance before my recent avoidance of the card, when the bills showed up I just made sure they didn't say "balance due" and let them be.

Well some time in October, THEY "WROTE OFF" my 81¢ balance. I did not notice this until I went to balance my accounts from the recent transactions and noticed that we differed by - you guessed it, exactly 81¢. I had kept a "black" balance on a Discover card before, and they just wrote me a check for that amount and set me to zero. But I never got a check for 81¢ from AFB. They just stole it from me. I called to ask, and they said they couldn't research it UNLESS I PAID $3 for each month's statement further back than the previous 3 (March, Feb, Jan). So they took my money, and want me to pay them an additional $9 to find out where & why they stole my 81¢...

Does this seem right? I mean, do they have a legal right to take my money, and just say "oh well" about it? Even charge me to find out? Shouldn't they be responsible for looking into it, not me? I didn't steal the money, screw that.

81¢ is nothing. I don't care about 81¢. But it's the principle. What if it had been $50? The amount doesn't matter, the act of stealing it does, however. I cancelled my account with them over the phone regarding the matter. Who else should I contact, though? I mean, on the one hand, it seems like a lot of hassle to go through to "stick it to them" for 81¢, finding a lawyer or something... But who else are they going to do this to, and what if it's for more money next time? Shouldn't they be called out?

Hello, Consumerist:

Last month, I made a small withdrawal from my HELOC at Wachovia. I only needed the money for about two weeks, then I paid back that loan amount, plus $1.00 to cover the interest that had accrued for those few days. When I received my statement last month, I had a credit on the account of $0.78, since only $0.22 was the interest cost. At the bottom of the statement, there was a note saying that since I had a credit on the account, if I did nothing for 60 days a check would be mailed to me.

Today I got my statement for this month. There was one transaction, on the closing day of the month, for $0.78. The transaction was an "ACCOUNT ADJUSTMENT". My balance was now $0.00, instead of -$0.78.

I called customer service to ask about this transaction. The agent first said that the note on the transaction stated it was an additional interest charge for 2007. That didn't make sense, and I told her it looked to me like Wachovia just took my money away from me. After putting me on hold, she came back to tell me that I was right. "The account will automatically zero out if it is less than $1.00."

I said, "Wait, so Wachovia will just take my money? What about that note on my statement last month?"

Then she put in an order for a check to be cut to me for $0.78. She could not just credit this to my checking account. She had to spend the postage and paper to mail me a physical check.

Granted, it's only $0.78, but here are my three questions:

If I owed Wachovia $0.78, would they just zero that out?

Why do they specifically tell you that a refund check will be issued automatically if that is not true?

How many thousands of people does this happen to each month?

Ticketmaster's inability to fix their system allows scalpers to buy up all the tickets for a concert within minutes, depriving fans of their chance to get a ticket for a fair price. On top of that, Ticketmaster routinely obtains sole vendor relationships with venues, so that even the initial ticket prices are inflated.

For their part, Wachovia profited in millions by allowing scammers to use stolen identities to drain money from customers' accounts with unsigned checks, despite receiving thousands of warnings about the fraud.

Choose the greater of two evils.

This is a post in our Worst Company In America 2008 series. Keep track of all the goings on at consumerist.com/tag/worst-company-in-america/
STILL OPEN FOR VOTING: Facebook vs The American Arbitration Association, Comcast vs Menu Foods

On Saturday 3/8/08 at approximately 4pm I went to a drive-up ATM at the Wachovia Bank branch located at 951 South George Mason Drive, Arlington, VA 22204. I put my card in and asked to withdraw $80. The machine was acting normally until it was supposed to dispense the money.

The screen flashed "please take your card" and gave me my card back, but no money came out. I waited, and suddenly the ATM's screen went blank for a moment, then came back on, still on the flashing "please take your card" screen. I parked my car and went to the ATM to wait for it to do something - my card information was still in the machine, and my money had never come out, and I was afraid it might start working again and give other people access to my account, or just give other people my money.

Standing next to the ATM I called the Wachovia customer service number. A man answered after a few minutes on hold and told me that there information showed that I had received the money, and that I would have to be transferred to the Disputes department. Standing outside next to the ATM in 50 degree rainy weather (with no coat because it had been warm earlier when I went out), I waited on hold about 10 minutes before my call rang through to someone's desk, and without ever getting to talk to that person, I was immediately dumped back into the general queue.

After waiting ANOTHER 10 minutes my call rang through again, and someone picked up without saying a thing and just hung up the phone.

At this point I was very upset, and the ATM screen had frozen on the "please take your card" screen (it had stopped the flashing graphic entirely). Right after that in my frustration I locked myself out of my car, so I had the privilege of standing outside the closed bank until about 6pm when my car with unlocked. I can confirm that the screen stayed frozen the entire time, it would not take other peoples cards nor did pressing any buttons affect it. At 6:15 I went to the walk-up ATM next to the frozen drive-up ATM and requested $80 again because I needed the money for a piece of furniture I was receiving that evening.

I went home. The next day I called the customer service line for Wachovia again, was transferred to the Disputes department again, and someone actually picked up the phone. This woman was very rude. She did not listen to anything I said, got all of my information AGAIN that the other customer service woman had requested, and then said that even though the 2 requests I made for $80 that day had been on different ATMs and 2 hours apart, they couldn't tell the difference between them.

She said that unless I could find the receipt for the second successful ATM transaction she would just have to pick one of the transactions randomly and if it was the wrong one my request would be denied and I wouldn't get my money back. She acted as if it was my fault for not having my receipt and that it was my responsibility to fix this issue, not her's or the bank's. I asked her how this could be possible, that they would just take my money because THEIR machine broke, and she got extremely defensive and even ruder, starting talking louder and talking over me saying that I was out of line.

I had written down the serial number of the broken ATM but she said she couldn't use that information. Thank god after searching through my trash I found the receipt of the successful transaction so she could put through the request for a dispute on the unsuccessful one. She said that in 3-5 days I would be mailed a letter and asked to provide even more information to an investigator, AFTER they received my reply the investigation would proceed, and then the bank would "balance" their ATM machine whenever they usually did so and they didn't know when that would be (nothing would be hurried on my account), and that IF they saw this "alleged" discrepancy then and ONLY THEN would I get my money back.

How many people actually get their receipts when they go to the ATM? How many people keep a hold of those receipts? Why would you think that you had to keep a receipt from a separate and successful transaction when complaining about one that didn't work and didn't give you a receipt? When you call their disputes department it says over and over again that you can file a dispute online. If you go to that page it's just a form with a couple drop down menus that doesn't allow for any comments, and aside from being able to choose "ATM" as the thing you had a problem with, the entire drop down menu asking what your problem actually was has no choice that even comes close to "ATM broke" or "ATM did not dispense funds." By the time someone had seen that online form and called me back my ATM receipt that I needed to do their jobs for them would have been long gone in the trash, and I would have been SOL. Now I still have to go through their little investigation and maybe in a couple of WEEKS it will be fixed.

What if I had requested enough money that I couldn't ask for it again? Would they have cared if it had been a few hundred dollars and I couldn't pay bills or my rent? I doubt it. In fact, I'm sure they would be even less likely to help because the amount was higher. I can assure you that I will cancel my account at that time because this bank's customer service is nothing short of horrible. How can they even legally pseudo-threaten to keep my money that I requested and never got unless I can provide information I had no way of knowing I would ever need?

If you don't end up getting your money from Wachovia, you should file a complaint with their regulating agency. The agency will investigate whether or not Wachovia broke any banking regulations by not correcting the ATM error.

Here's how to do that:
1) Contact your lender with a formal complaint. You can do this in writing, or by email. Keep a copy of this complaint for your records.

2) If your lender doesn't respond in a way that makes you happy, you can file a complaint with the bank's regulatory agency. This may be the FTC, The Department of Thrift Supervision, The Comptroller of Currency...or a few more.

You'll need to figure out which agency regulates your lender by calling or using FDIC's Bank Find.

3) Write a formal complaint letter to the bank's regulatory agency. Follow the FTC's instructions for writing a complaint. This document also has the correct contact information for the various regulatory agencies. Keep a copy of this complaint for your records.

For more information about how to learn to launch your own EECB, click here.

"YIKES!!!!" wrote one Wachovia executive in 2005, warning colleagues that an account used by telemarketers had drawn 4,500 complaints in just two months. "DOUBLE YIKES!!!!" she added. "There is more, but nothing more that I want to put into a note."

However, Wachovia continued processing fraudulent transactions for that account and others, partly because the bank charged fraud artists a large fee every time a victim spotted a bogus transaction and demanded their money back. One company alone paid Wachovia about $1.5 million over 11 months, according to investigators.

"We are making a ton of money from them," wrote Linda Pera, a Wachovia executive, in 2005 about a company that was later accused by federal prosecutors of helping steal up to $142 million.

In late 2003, a Wachovia executive announced to colleagues via e-mail that her unit, because of AmeriNet, had seen "an increase in our annual revenue projection."

• In 2004, Wachovia "held a lunch for the owner of a payment processor that the bank knew had drawn thousands of previous complaints." The company was sued by the FTC last year for bilking $69 million from retirees and other victims.


• An internal Wachovia fraud investigator pointed out that Suntasia's returned check rate was 79%, slightly higher than the 2.5% that regulators say indicates a high probability of fraud. Despite this, Wachovia continued to do business with Suntasia until the company was forced to close by a court order last year.


• Citizens Bank contacted Wachovia in 2006 and asked them to investigate a fraud-related account that was triggering high numbers of complaints from their customers. Wachovia left the account open until a court order forced it closed.

(Thanks to jbcrasher!)

"Papers Show Wachovia Knew of Thefts" [New York Times]

RELATED
"infoUSA Marketed Lists Of "Gullible" Seniors To Known Scammers, Wachvoia Processed The Unsigned Checks"
(Photo: Getty)

Your website has changed my consumerist ways forever. I read "Gotcha' Capitalism" this weekend and decided to take back my rights as a consumer.

1. Our mortgage was paid up in October and I didn't realize that Wells Fargo had the real estate tax payment scheduled for semi-annual. Got the county tax bill with a penalty of $18. Called a county clerk, explained my situation and got the charges removed. Savings: $18

2. Checked my Wachovia account and found a $35 overdraft fee from November. Stopped at the bank regional main branch. Someone please explain to me why, in a 10-12 story Wachovia building, my escalated customer service request needed to be handled off-site by someone in meetings all day. At the end of the day (literally) 2 fees removed. Savings: $70.

3. Called around to price out heating oil costs and the best I could do was $3.34-$3.39/gal. Negotiated with Petro for a 1 yr. contract @ $3.09. I have 2 tanks x 275 gals x 5 deliveries. Savings: $687.50

4. Kids gave me an iphone for Christmas. Ported # from Verizon. ETF on current bill. Followed your script (including reading the legalese several times to the annoyance of the csr.) Waited 10 min. and savings: $175

5. Comcast. No success here. Offered to downgrade to basic cable-phone bundle ($109 with 2 year contract! Does this mean FiOS is getting close to my neighborhood?) Savings: $0

Total savings for week's work: $950.50
Regaining some financial control: Priceless

-Moriconi

(Photo: Kai Hendry)

Why? Analysts say that its a direct result of the subprime meltdown. Faced with deteriorating investments, banks need to squeeze someone in order to make up for their mistakes.

That's where you come in.

"If you need to hit your target, one of the easiest ways to do it is to raise your fees," Keith Horowitz, a banking analyst at Citigroup Inc., told the WSJ "It falls straight to the bottom line."

Banks deny that the ever-increasing fees have anything to do with their recent mortgage woes, naturally.

"We're always looking for new sources of revenue," says Mike McWhortor, a spokesman for the First Horizon National Bank, a regional bank that charges a $35 "not sufficient funds" fee.

Bruised Banks Salve Their Pain With More Fees for Consumers [WSJ]
(Photo:meghannmarco)

Lt. William Farr, the head of the D.C. police bank robbery unit, told the Washington Post that investigators are playing catchup.

"We're now behind. We're trying to catch up with everybody, all the employees," Farr told the newspaper. "If we can get good pictures from the surveillance cameras . . . I think we'll get him."

Authorities don't have a detailed description of the robber and don't know whether he left the bank in a vehicle or on foot.

By the time the bank called the police, 11 hours had gone by.

After 11 Hours, Bank Realizes It Was Robbed [WBAL]
(Photo:epicharmus)

I'm writing to tell you about the miserable service I've received from Wachovia Bank. On several occasions I've logged into my checking account to sent payments for various things. It seems that more often that not I end up hearing from these businesses wanted to know where the payments are. I know full well that I've sent them, and even having the confirmation codes to prove it. I log in to my account and can find no record whatsoever of these payments.

At this point of course I call customer service, which in my opinion would be better called customer dis-service. I explain the situation to them and the inevitable response I get from them is "We have no record of that transaction". "Well yes, that's EXACTLY the problem, now what are you going to do about it?" I say. Of course they reply that with no record there is nothing they can or are willing to do and suggest I resubmit the payment. They refuse to acknowledge that there might be a problem or that they might be responsible in some way.

These people seem to think that their computers are infallible and that whatever the computer says must be true. They are not willing to consider anything else. I work with computers and I can tell you that they can and do make mistakes but these people don't want to see that there might be a problem with the system. They seem incapable of understanding that someone might have made a programming error that could result in this.

My credit is being damaged by Wachovia and my good standing with business I use is being ruined. Wachovia blames me and treats me like I'm some kind of mentally ill child. It's disgusting, demeaning and unbelievably insulting to be treated this way. I may not be able to resolve this with them, the black marks on my credit aren't going to go away by themselves, but I sure as all can close my accounts with them and make sure people hear about it.

Thank you,
Terry W.

Sounds like Terry is stuck in a tier 1 customer service heckhole. They can't fix his transactions because there's no record of them. If they can't see anything, then there's nothing for them to fix. And it seems there's also no escalation button for them to press. In the customer service flowchart it would say, "IF root of problem exists at level solvable only by people above my paygrade THEN press this button." If Terry still has his accounts open, he could give this Wachovia executive contact info a shot. Otherwise, Wachovia just lost another customer due to their rep's indifference and inability to handle issues not covered in the plastic three-ring binder.

(Photo: epicharmus)

Wachovia Bank Tells Man He Owes $211 Trillion [WSBTV]