Consumer complaint received 2020-01-22
Company: KEYCORP
State: IN
Product: Checking or savings account
Sub-product: Checking account
Issue: Managing an account
Sub-issue: Funds not handled or disbursed as instructed

Complaint:
On XXXX XXXX, XXXX a collection agency operating on behalf of the state of Indiana applied a bank levy to my personal bank account at KeyBank as well as my husband 's personal bank account at a local credit union. While our tax debt was joint, our bank accounts are individually owned. At the time I had enough funds in my account to fully cover the amount of the levy. The following day, my bank ( KeyBank ) withdrew the funds that were held as part of the bank levy to be paid to the collection agency and released the remaining funds. Likewise, my husband 's bank released his funds. 

On XXXX XXXX, XXXX, my husband 's bank notified him a levy with the same reference number as XXXX had been attached to his account. The collection agency stated they never received the funds from my bank ( KeyBank ). When they were shown proof that the funds had been withdrawn from my account ( KeyBank ), they rebutted that the proof only shows the funds left my account ( KeyBank ) and offers no proof the funds were sent to nor received by them. They further explained that the payment instructions they sent KeyBank required payment in the form of a paper check for tracking purposes. They said that while they attempted to contact them several times, KeyBank never responded.

I called KeyBank on XXXX XXXX, XXXX and explained the situation. The representative told me all that I should need is my bank statement as proof of payment. When I explained to her the collection agency 's position, she said she would make a note and have someone reach out to the collection agency with validation of the payment. I called the collection agency on XXXX XXXX, XXXX to be told they never heard from KeyBank. I called KeyBank again on XXXX XXXX, XXXX. After being hung up on several times, I finally was able to reach. a supervisor and explain the situation. She told me she had no access to any information that could verify the payment was transmitted to the collection agency on XXXX XXXX, XXXX when they withdrew the funds from my account. She informed me that she was escalating the matter to their legal department and that someone from that department would reach out to me with a resolution within 2 business days. I gave them 3 business days and never heard from them. Additionally, in that time  period my husband 's bank sent him documentation verifying their withdrawal and payment to the collection agency. 

On XXXX XXXX, XXXX I went to a local branch of KeyBank expecting to get the information necessary since I had never heard back from anyone. The representative at the bank told me there were no notes on my account reflecting any aspect of the problem. She gave a multitude of excuses. She told me they couldn't verify the payment since it had been more than 60 days. She claimed that they paid the collection agency via ACH and had no way of proving the funds were delivered. Ultimately, they refused to give me any verification that the money they withdrew from my account on XXXX XXXX, XXXX was used as required by the bank levy. As it stands, the amount owed the collection agency continued to accrue interest since XXXX XXXX, XXXX. That amount has now been paid from my husband 's account. Over {$1100.00} now is " missing '' that KeyBank removed from my account.

Company response to consumer: Closed with explanation