Bank of America Announces Non-Reopening of Closed Zombie Checking Accounts

Reiss informed The Huffington Post on Monday by phone that the bank has been thinking about such a change as early as late last year. She added that the policy change has come into effect from this week. This new rule is a major shift in the policy of the bank. Earlier, the bank has been previously permitting reactivation of closed checking accounts of past customers when electronic transactions arrived for such accounts. Reiss mentioned that the change was taken only after getting feedback from customers.

Earlier, the Huffington Post had reported that reopening of old and closed accounts was not only unexpected but also resulted in piling up of overdraft fees as well as other related charges when banks allow automatic withdrawals from empty or closed accounts. This is a costly matter for any bank.

Due to the ease and convenience of electronic banking, the popularity of electronic debits and deposits has sharply increased in recent years. Further, electronic banking allows customers to avoid fees, since many checking accounts stipulate that a maintenance fee is chargeable if customers do not make a direct deposit into the account.

A major reason for banks to encourage electronic transactions is customer retention. Consumers usually find that switching banks is a difficult proposition due to the complicated Internet transactions. A recent survey showed that 63% of bank customers did not consider change of banks due to automatic payments last year, while only 20% of bank customers deliberated on this option.

Consumer Union published certain recommendation to banks earlier in this year to assist customer in moving their accounts from one bank to another. A major suggestion of Consumer Union was that the bank should take the responsibility of transferring automatic debits and credits from old accounts to new accounts and the customer should not be involved in that process.

The policy change of Bank of America might not be considered a step in that direction. Reiss of Bank of America pointed out that it is the responsibility of individual customers to inform creditors and depositors about new account information, so that there would be sufficient time for correct clearance of incoming deposits or payments.