5,300 Electric Orange Checking Account Holders Mistakenly Told: "Based On Your Credit Score, We Have Decided To Close Your Account"

Nick was shocked to receive an email from ING telling him that his Electric Orange checking account would be closed because of his credit score. Nick was not the only one; similar letters were sent to 5,300 account holders.

MSN Money columnist Liz Weston contacted an ING spokesman who said, “The letter was worded wrong,” and that ING does not “give or deny” checking accounts based on credit scores.

What the bank does use credit scores for is to help determine the size of a customer’s overdraft line of credit. Instead of charging $35 a pop for overdrafts, as many other banks do, the Electric Orange allows customers to use this credit to prevent overdrafts; the customer pays a nominal amount of interest for the privilege.

ING’s email, after the jump…

(Photo: wili_hybrid)

Based on your credit score, which was provided by a consumer-reporting agency, we have decided to close your account. We have reduced your Overdraft Line of Credit to zero ($0). We feel this action is in your best interest as well as ours.

Because we want to make sure you have time to manage the transition of your account, we will leave the deposit portion of your account open for the next 30 days. Please use that time to:

* Change any direct deposits you currently have scheduled for your Electric Orange.
* Update any bill payments that are currently set up for your Electric Orange.
* Repay any outstanding balance you might have on the Overdraft Line of Credit.
* Allow any pending transactions to clear.

After 30 days, you will not be able to use your Electric Orange – it will be restricted from all account activity. This means you will not be able to transfer funds in to or out of your Electric Orange or use your MasterCard

debit card.

Any account balance plus any interest earned on your Electric Orange will be transferred back to your external, linked checking account five business days later. However, if we know of transactions that have not cleared within those five days, we will wait to transfer funds until those transactions have been processed.

Please keep in mind, that while information from a consumer-reporting agency in whole or in part influenced our decision, the reporting agency did not make this decision and cannot provide information about it. However, if you have any specific questions regarding your credit report, you can contact that agency directly using the following information:

Consumer Services
Atlanta, GA 30374-0241

Under section 612 of the Fair Credit Reporting Act, you have a right to obtain a free copy of your credit information on file at the agency, if your request is made within 60 days of receiving this notice. Under Section 611 of the Act, you also have the right to dispute the accuracy or completeness of any information contained in that report.

Please note this does not affect any other accounts you may have with ING DIRECT. In addition, you are welcome to re-apply for another Electric Orange again in 30 days. If you have any questions, you can give us a call at 1-888-464-0727 from 8 AM to 8 PM any day of the week.

Thank you.

Anyone concerned about the status of their account should contact ING. — CAREY GREENBERG-BERGER

ING Direct credit score goof [Ask Liz Weston]


Edit Your Comment

  1. MikeTheKat says:

    So your credit score is now being used to further extort money and limit the credit institutions available to consumers. Glad I don’t use them but in general banks are way too greedy and have way to much power. Maybe the general public should create a lobby group and get what we want, oh wait we do that already it’s called our tax dollars.

    The only good orange is one you squeeze for juice.

  2. Spider Jerusalem says:

    how is that “worded wrong”?

  3. FLConsumer says:

    There’s more to this story than what’s been posted here… more details on the story can be found over at http://www.consumerismcommentary.com/2007/05/10/ing-direct

    According to the article there, “Nick admitted he had been “living in” the $1,000 overdraft protection (more like a cash advance).” As a bank, I’d be very worried about someone constantly using the cash advance. If someone’s living paycheck to paycheck, what are the chances of my bank getting its money back? Probably not so great. One hardship / good night out and there goes my chances of getting repaid.

    Nick also repeatedly violated the Federal 6 withdrawls per month rule on his savings account.

    Keep in mind, this is what NICK has told us, NOT ING. There’s always 3 sides to the story… and we’ve yet to hear the other 2 sides, but so far, from what Nick has said, I’m certainly not convinced I’d want him as my customer.

  4. dantsea says:

    “ING does not “give or deny” checking accounts based on credit scores.”

    That’s a little disingenuous. While the checking account itself may not be contingent on a minimum credit score, the overdraft line of credit is. ING Direct will not open an Electric Orange checking account if one does not qualify for the overdraft line of credit. I’m not sure what happened with the accounts mentioned in this entry; either they have a line of credit and an account, or they don’t.

  5. roamer1 says:


    ING Direct will not open an Electric Orange checking account if one does not qualify for the overdraft line of credit.

    …and that’s the problem.

    The whole thing with requiring an overdraft line with a checking account completely gets me; I’ve never heard of any other bank that does that. How in the world is it possible to overdraw an account that is pretty much entirely electronic?

  6. catnapped says:

    Even people with relatively high credit scores and little or no use of the overdraft were getting their accounts closed as well. Might be some profitability model at work that ING isn’t mentioning.

  7. TheSlate says:

    I have not had a good experience with Electric Orange. Two of the three paper checks I sent never arrived after waiting four weeks. When dealing with getting my money back, it seemed like every CSR had a different policy. I’ve been working the past two weeks to fix the latest check.

    Also funds are withdrawn from your account when the check is sent, not when the check clears. The funds are not made unavailable, but rather removed, so my money was not earning interest on these checks that never arrived. It would be fine to me if the funds were made unavailable, but instead it just goes *poof* and becomes a huge pain to get back if the check is never cashed. When I complained about not earning interest on my checks that never were cashed this is the response I got:

    “Please know, Electric Orange features what is known as a “Good Funds” model. As a result, when paper check is sent, the funds are immediately taken out of your Electric Orange. This process eliminates the chance you may overdraft your account. While other banks might allow you to dip below $0.00 and charge you a non-sufficient funds fee, Electric Orange protects you.”

    If that is the case, I don’t even see why Electric Orange needs a LOC.

    I’m probably going to move my ING accounts someplace with a better rate and better service. If they can’t handle my tiny problems, I don’t want to wait for a big problem to test their customer service. Electric Orange is a great idea; ING just seems to be incapable of the service required to pull it off.

  8. Islingtonian says:

    @roamer1: having an overdraft line is common in the UK, and perhaps other parts of europe, especially for student accounts.

  9. shades_of_blue says:


    You know of another online bank with higher rates that ING? Please share, my current bank Wachovia pulled back interest rates on savings, money market and CDs over the last year. So I’m in the market for a new bank and ING looked very promising. So much, that next time I’m in NYC I’m going to stop in their ‘cafe’ and get more information in person, which hopefully will be soon.

    As for Nick, stop floating from check to check or stop bitching about your bank giving you the boot. I don’t blame them, in my line of work we’ve dropped several repeat customers who stretched payment by an extra month or so. Businesses can’t be expected to carry your ass because you can’t. Get over it, learn and move on.

  10. tracilyns says:

    what bugs me is that they encourage you to use the overdraft. they add your balance + the overdraft, and call it your “spending power,” and that’s the one of the most prominent numbers on the account page. it’s a little irritating to have to try and search for what my actual balance is.

  11. cindel says:

    Consumerist is a bit late for this. This has being going on for the past three weeks and many war stories can be seen at creditboards.com

    I was one of those people that received email and believe it’s NO MISTAKE! ING has been closing many accounts and now they are backtracking. Too little Too late; I’ve decided to close my account and put my money elsewhere. ING isn’t making any money off people who do not use the Overdraft Credit Line; it’s just business eh?

  12. RonDiaz says:

    I signed up for the Electric Orange when they first offered it to me and I must say I have been very pleased. They gave me $250 in overdraft protection, and with just recently getting married, it was nice to not have to worry about cash flow issues. I also really like the “Good Funds” method because I find landlords in particular take forever to cash a check, but this way your online register is still accurate. All paper checks I have sent have arrived in a timely manner thus far. If checks havent arrived, I would consider pointing a finger at the USPS and not just ING. At least here, I have a lot of problems getting all my mail delivered from USPS.

    I am not sure that I agree with the wording or the method of these account closings, but I am still pleased with ING. I hope they don’t take my Electric Orange away anytime soon.

  13. FLConsumer says:

    @shades_of_blue: Actually, just about all of the online banks offer higher rates than ING, BUT customer service at the other online banks leaves much to be desired (HSBC anyone?) I believe FNBO offers a promotional 6% right now, but I’m still waiting to hear more people’s experiences before opening an account with them.

    Good service = my loyalty. MY TIME is worth more than 0.5-1.5% of what I keep in a savings account. The bulk of my money stays in much higher yielding investments.

  14. shades_of_blue says:

    I’ll have to give a couple others a good review then, the ones I’ve seen in the passed have all had BS clauses such as 6.xx% for 30days, then 4.xx% for 60 days and from there it continues to drop.
    Those are the ones I’d like to avoid, as their only interested in baiting customers with a high introductory rate and immediately sticking them with the fine print.

  15. TheSlate says:

    @shades_of_blue: Bankrate.com has pretty good comparisons. They show the actual rate along with the teaser rate.

    @RonDiaz: I’ve never has problems with the USPS to those locations before. If it is, ING should guarantee delivery, otherwise it’s a bigger hassle then writing the check and sending it myself.

  16. vongarr says:

    ING is was a godsend for me. Living on a military base here in Germany, I have to withdraw dollars and Euro quite a bit. My former bank would charge me an “internationa processing fee” along with however much the ATM fee was (Since none of their ATMS were here) ING doesn’t charge me anything.

    All you have to do to figure out your real account amount vs spending power is to subtract 1000 (Or whatever you have) from it. Pretty easy. 1734 becomes 734.

  17. REDDOG123 says:

    Quite ironic the response of the ING spokeperson that said ING does not “give or deny” checking accounts based on credit scores.

    I just looked at the application for an Electric Orange checking account and the 3rd bullet under the Before you start section states:

    “As part of the account application process, we will obtain information about you from a consumer reporting agency. Based on that information, we may or may not open an Electric Orange for you.”