Consumer complaint received 2018-05-22
Company: CAPITAL ONE FINANCIAL CORPORATION
State: NJ
Product: Checking or savings account
Sub-product: Other banking product or service
Issue: Managing an account
Sub-issue: Funds not handled or disbursed as instructed

Complaint:
On XX/XX/XXXX I submitted to Capital One Bank via E-mail a two page letter, a two page attachment, and five exhibits documenting that XXXX, which had become part of Capital One Bank, had in XXXX mislabeled Roth IRA of mine as a Traditional IRA. Subsequently this mislabeled IRA was comingled with a traditional IRA, in violation of Federal Law, specifically Title 26 of the Code of Federal Regulations, which forbids comingling of Roth and Traditional IRAs. 
That letter and attachment is reproduced here without account numbers and other personal information : XX/XX/XXXX XXXX XXXX XXXX IRA Department Capital One Bank XXXX. XXXX XXXX XXXX XXXX, MN XXXX Phone : XXXX Capitalone360.com XXXX Re : Comingling of Roth and Traditional IRA Funds as A Result of Mislabeling Error at XXXX Dear XXXX XXXX XXXX : Again I want to thank you for what you have provided to me regarding the fact that you have no transaction records prior to XXXX of XXXX, which was merged into XXXX XXXX, which was subsequently merged into Capital One Bank. 
As Capital One is well aware, I am a customer presumably because of dedication to service and to conformance with the law, particularly regarding fiduciary duties. That is why I anticipate full cooperation with regard to the following matter : In XXXX, my XXXX Roth and traditional IRAs were transferred to XXXXXXXX XXXX, which made a bookkeeping error and labeled all transferred funds as traditional IRAs regardless of some of them being Roth IRAs. In XXXX, these funds were transferred to XXXX XXXX and comingled into one account. Eventually these funds were transferred to XXXX XXXX IRA account xxxxxxxxxxxx. 
Recently I became aware that trustees are not allowed to commingle Roth and Traditional IRAs and I am putting you on notice that an audit on my XXXX IRA account XXXX is necessary to monitor for and to reverse comingling of Roth and traditional IRA funds in violation of Federal Law. Your possible responsibility as a past successor trustee, as a result of your purchase of XXXX, in this regard is specified in the Code of Federal Regulations, Title 26 1-408-2 in which it is stated in part under subsection ( iii ) Audits ( A ) At least once during each period of 12 months, the applicant will cause detailed audits of the fiduciary books and records to be made by a qualified public accountant. At that time, the applicant will ascertain whether the fiduciary accounts have been administered in accordance with law, this paragraph, and sound fiduciary principles. The audits shall be conducted in accordance with generally accepted auditing standards, and shall involve whatever tests of the fiduciary books and records of the applicant are considered necessary by the qualified public accountant And in which it is stated under subsection ( vii ) Books and records : ( A ) The applicant must keep its fiduciary records separate and distinct from other records. All fiduciary records must be so kept and retained for as long as the contents thereof may become material in the administration of any internal revenue law. The fiduciary records must contain full information relative to each account.

And in which it is stated under subsection ( 5 ) Prohibition against commingling : ( i ) The assets of the trust must not be commingled with other property except in a common trust fund or common investment fund. 
Please confirm in writing within 15 days that Capital One has verified that 1. In XXXX, my XXXX Roth and traditional IRAs were transferred to XXXX XXXX, which made a bookkeeping error and labeled all transferred funds as traditional IRAs regardless of some of them being Roth IRA ; 2. Comingling of my Roth and traditional IRAs did occur at XXXX XXXX ; 3. XXXX was merged into XXXX XXXX, which was subsequently merged into Capital One Bank. 
4. The comingled Roth and Traditional IRAs in question were transferred and presently exist in XXXX XXXX IRA account XXXX  ; and 5. Capital One Bank will properly segregate the comingled traditional and Roth funds into separate accounts in conformance with IRS regulations.

To aid you in above endeavor I am supplying you with Attachment A, which is a tracing from my personal financial records of my Roth and Traditional IRA funds from XXXX, with XXXX as Trustee, to the present, with XXXX XXXX as Trustee. This attachment shows that Roth IRA funds were mislabeled as traditional IRA funds by XXXXXXXX XXXXk in year XXXX and that they were subsequently comingled by XXXX XXXX in XXXX. It also shows that these funds eventually became part of my IRA portfolio with XXXXXXXX XXXX  as Trustee. 
Thank you in advance for your anticipated prompt cooperation with the above requests. 

Very Truly Yours, XXXX Sent by E-mail : XXXX ATTACHMENT A a. XXXX XXXX   Roth IRA Accounts XXXX XXXX XXXX, both of retirement ID # XXXX and totaling {$4400.00} ( Exhibit 1 ), were transferred to XXXX XXXX   Account XXXX in year XXXX. XXXX XXXX sent me a XX/XX/XXXX dated letter, certificate of deposit receipts, and three XXXX quarterly statements, all indicating that these funds were invested as a traditional IRA ( Exhibit 2 ) in spite of my indicating on my IRA Transfer request form that funds were coming from a Roth IRA at XXXXXXXX XXXX ( Exhibit 3 ). XXXX quarterly statements at XXXX indicate that there was no recharacterization of the funds in that transferred IRA ( Exhibit 2 ). Therefore, XXXX XXXX mislabeled the Roth IRA as a traditional IRA. 

b. In the fall of XXXX I made application with XXXX XXXX to effect a rollover from XXXX XXXX into XXXX Traditional IRA Account XXXX as follows : 1. ) {$4900.00} from XXXXXXXX XXXX account XXXX was deposited onXX/XX/XXXX ; and 2. ) {$29000.00} from XXXX traditional IRA account XXXX was deposited on XX/XX/XXXX. 
Relevant documentation is shown in Exhibit 4. 
c. In the fall of XXXX I effected an IRA rollover from XXXX XXXX to XXXX XX/XX/XXXX as follows : : {$39000.00} from XXXX XXXX Account XXXX was rolled over into XXXX XXXX account XXXX. 
Relevant documentation is shown in Exhibit 5.

d. In the spring of XXXX I effected an IRA rollover from XXXX XXXX and XXXX XXXX to XXXX XXXX XXXX as follows : 1. ) {$39000.00} was transferred from XXXX XXXX   Traditional IRA Account xxxxxxxxxx to XXXX XXXXXXXX XXXX Traditional IRA account XXXX  ; and 2. ) {$4100.00} was transferred from XXXX XXXX   Traditional IRA Account XXXX to XXXX XXXXXXXX XXXX Traditional IRA account XXXX. 
Relevant documentation is shown in Exhibit 6.

e. In the fall of XXXX I effected an IRA rollover from XXXX XXXX XXXX XXXX to XXXX XXXXXXXX XXXX as follows : On XX/XX/XXXX, a check of $ XXXXwas received from XXXX XXXXXXXX XXXX XXXX account XXXX and deposited on XX/XX/XXXX into XXXX XXXXXXXX XXXX Traditional IRA account XXXX. 
Relevant documentation is shown in Exhibit 7. 
f. In XXXX, XXXX XXXXXXXX XXXX was taken over by XXXX XXXX XXXX XXXX having the same address. 
Relevant documentation is shown in Exhibit 8.

g. In XX/XX/XXXX I effected an IRA rollover from XXXX XXXX XXXXXXXX XXXX XXXX XXXX to XXXX XXXX as follows : On XX/XX/XXXX, {$110000.00} a checkwas received from XXXX XXXXXXXX XXXX Traditional IRA Account XXXX and deposited into XXXX IRA Account XXXX on XX/XX/XXXX. 
Relevant documentation is shown in Exhibit 8. 



On XX/XX/XXXX XXXX XXXX of Capital One Bank responded via E-mail that Capital One Bank could not, in spite of my supplying pertinent business records, verify the bookkeeping error of XXXX in XXXX He referred me to the legal department if I would like to pursue this matter further. I take that to mean that I am going to have to file a lawsuit to get any possible satisfaction.

Company response to consumer: Closed with explanation