Is it legal for a bank to reopen an account???

Question

UncleB wrote:
asheltonphoto2 wrote:
Wow, thank you. really doesn't seem like a kosher practice. I spoke with a rep who directed me to some very vague wording in regard to this. Vague or not, it is there in the deposit agreement.  Oh well, drop in the bucket, I suppose. Yeah, this practice goes way, way back. I closed an account with a regional bank in the mid 2000s, and I was concerned of something like this happening as well.  As I was closing the account, I told the person at the branch my account number "might" have been compromised - hey, you never know - and I needed to be sure there was no way the account could "come back to life".  They claimed they did a 'hard-close' (or something like that) but I'll never know if it made a difference.  I had them flag the debit card as 'lost' in their system as well, just in case. It's been a while since I closed any bank accounts, but the last time I left the old account open for an extended amount of time with a small balance, just in case of any situations like this.  I can understand this option isn't ideal for everyone, though.  I will agree it seems this practice is flawed, and I can also see how it could be easily abused.  If you wanted to 'throw a wrench' into someone's financial life, just make a small ($5) cash deposit into an account you know to be closed, and watch the fees add up (most accounts have monthly fees without direct deposit or minimum balances).  Ugh.Hmm, that's strange, I always assumed when you closed a bank account it was dead and couldn't come back to life on its own. In the summer of 2010 I was heading toward filing BK7, had already retained and PIF the attorney. He advised me to close my bank account and open a new one at a bank none of my creditors knew about, to "avoid potential problems". That was Wells Fargo, I closed it in early June. By July CC companies were calling like mad and Chase was the worst, they used a call center in India that spoofed their caller ID so I couldn't always who it was. It was always the same when I answered one of their calls, the person would ask my permission to charge my bank account of record - Wells Fargo - for the past due amount. I'd tell them "No, that account is closed and I don't have any money to make any payment". Well, what do you expect when you outsource collections to a third world country? At least 4 reps must have claimed I told them "Sure, go right ahead" as I got at least 4 returned item mailings from WF in July & Aug, all attempts by Chase to debit the account for a payment. WF never charged me any fees and the notices always showed the account as closed. I guess it's up to the T&C, but I would think WF would have the T&C as much to their favor as possible.

Answer 1

DaveInAZ wrote:
UncleB wrote:
asheltonphoto2 wrote:
Wow, thank you. really doesn't seem like a kosher practice. I spoke with a rep who directed me to some very vague wording in regard to this. Vague or not, it is there in the deposit agreement.  Oh well, drop in the bucket, I suppose. Yeah, this practice goes way, way back. I closed an account with a regional bank in the mid 2000s, and I was concerned of something like this happening as well.  As I was closing the account, I told the person at the branch my account number "might" have been compromised - hey, you never know - and I needed to be sure there was no way the account could "come back to life".  They claimed they did a 'hard-close' (or something like that) but I'll never know if it made a difference.  I had them flag the debit card as 'lost' in their system as well, just in case. It's been a while since I closed any bank accounts, but the last time I left the old account open for an extended amount of time with a small balance, just in case of any situations like this.  I can understand this option isn't ideal for everyone, though.  I will agree it seems this practice is flawed, and I can also see how it could be easily abused.  If you wanted to 'throw a wrench' into someone's financial life, just make a small ($5) cash deposit into an account you know to be closed, and watch the fees add up (most accounts have monthly fees without direct deposit or minimum balances).  Ugh.Hmm, that's strange, I always assumed when you closed a bank account it was dead and couldn't come back to life on its own. In the summer of 2010 I was heading toward filing BK7, had already retained and PIF the attorney. He advised me to close my bank account and open a new one at a bank none of my creditors knew about, to "avoid potential problems". That was Wells Fargo, I closed it in early June. By July CC companies were calling like mad and Chase was the worst, they used a call center in India that spoofed their caller ID so I couldn't always who it was. It was always the same when I answered one of their calls, the person would ask my permission to charge my bank account of record - Wells Fargo - for the past due amount. I'd tell them "No, that account is closed and I don't have any money to make any payment". Well, what do you expect when you outsource collections to a third world country? At least 4 reps must have claimed I told them "Sure, go right ahead" as I got at least 4 returned item mailings from WF in July & Aug, all attempts by Chase to debit the account for a payment. WF never charged me any fees and the notices always showed the account as closed. I guess it's up to the T&C, but I would think WF would have the T&C as much to their favor as possible.I feel your pain... I had to close a checking account back in 2000 for the same reason; I had a credit card with the same bank that I was IIBK, and the attorney told me since it was the same bank they could possibly go after my checking to pay the credit account.  As for accounts 'coming back to life', it seems the problem usually comes up when there's a deposit of some type into a closed account, then monthly fees start being assessed without the account owner being aware the account is even reopened.  Also, at the bank I used a few years back their debit cards were handled by their credit card dept., who were even in a different city from the main bank office.  I found out "the hard way" there seemed to be a disconnect between the two, and it was not only possible for a debit card to be approved with no money in an account, they were clear at the local branch that this was quite profitable for the bank (OD charges).  Of course the law has changed and this now requires 'opting in', but to make sure there's no problem I simply report the card lost before closing the account.  That seems to prompt them to put an immediate 'stop' to any further authorizations in case there is a delay in closing the card.  An ounce of prevention truly is better than a pound of cure.