Consumer complaint received 2020-06-28
Product: Checking or savings account — Checking account
Issue: Managing an account — Fee problem
Company: BANK OF AMERICA, NATIONAL ASSOCIATION (WI)

Summary : I was charged {$510.00} ( as of XX/XX/XXXX ) in monthly maintenance fees and credit card interest for a checking account and credit card account that had XXXX balance and zero activity ( deposits, withdrawals, payments or purchases ) since XX/XX/XXXX. Due to the compounding credit card interest, this resulted in an effective monthly maintenance fee of {$19.00} for the 26 months during which the account has remained active since the fee was first introduced on a previously fee-free account. As I had assumed the account was inactive, with zero activity and no fees, these charges were incurred without my knowledge, and I did not receive a notification from Bank of America that any payment was due, even when the maintenance fees caused my credit card account to become past due. 

I only became aware of the charges when my XXXX XXXX XXXX credit monitoring service alerted me to a 30-day late payment notification posted by Bank of America. Given I have otherwise perfect payment history, I initially thought this was due to fraud, but I later discovered that Bank of America 's poorly designed online banking tools - namely the interaction between their recurring payment tool and their overdraft protection tool, which linked the credit card and checking accounts - generated synthetic, internal activity on the account. This synthetic activity caused the bank to keep open ( and charge fees on ) a dormant account that would otherwise have been closed. The fees continued to escalate without my knowledge but were self-funded through the overdraft mechanism. This stopped without any intervention from me in XX/XX/XXXX, causing the account to become past due ( again without my knowledge ). Still there was no communication from Bank of America. 

I have now spent several hours on the phone trying to resolve the issue with Bank of America. Ive been passed back and forth between the checking and credit card departments, each of which claimed they lacked the authority to remedy the issue. I was given different sets of facts by different representatives and promised calls back that never occurred. The checking account department told me that typically, when a checking account is inactive but generating maintenance fees, it will be deemed dormant by the bank and closed. In my instance, however, the synthetic and circular activity between the recurring payment and the overdraft tool are being considered even upon human review bona fide transaction activity which merits keeping the account open. Because they do not consider my issue a bank error, they claim they are powerless to offer any type of refund of the fees generated. 

Therefore, due to improperly designed online banking tools, inadequate internal controls, and a poor customer support and account review procedure, Bank of America has effectively : Charged me maintenance fees of {$12.00} per month for 26 months during which my checking account had zero activity, having themselves confirmed that a typical account would be considered dormant and closed if it was accruing maintenance fees despite being inactive Charged me a further {$190.00} in interest and fees incurred on top of the monthly maintenance fees Materially damaged my credit by unilaterally cancelling the circular recurring payment + overdraft mechanism that allowed the fees to accrue in the first place, causing the account to become past due, again without notifying me or seeking my consent Account Timeline : The history of the account provides some insight into how these charges came to be generated : XXXX : Account was opened as a fee-free, eChecking account with an associated credit card XX/XX/XXXX : {$8000.00} balance transfer was applied to the credit card account XX/XX/XXXX : A recurring payment of {$100.00} per month was established from the checking account to the credit card account. Prior recurring payments of {$50.00} and {$200.00} per month had been in effect at various points during the paydown of the {$8000.00} account XX/XX/XXXX : The remaining {$320.00} due on the credit card from the original {$8000.00} balance was paid from the checking account. The ending balance on the credit card was then {$0.00}, and the remaining balance in the checking account per the statement on XX/XX/XXXX was {$1.00}. At this point, I considered it no longer necessary to log into the online banking actively, given that I did not plan to generate any further transactions at that time and understood that any critical communications would trigger an email or paper notification according to the communication preferences that were set on the account. I did not close the account because there was no fee to keep it open, and I considered that I might use it again at some point in the future XX/XX/XXXX : The {$100.00} recurring payment to the credit card continued to occur, as the business logic of the tool did not account for the fact that the credit card now had {$0.00} balance. This payment was funded through the overdraft protection, which linked the credit card and checking accounts. A {$100.00} payment was therefore made to the credit card by overdrawing the checking account by {$100.00} ( therein creating a {$100.00} liability on the credit card ). The starting and ending balance in the checking account for XX/XX/XXXX was {$1.00}, and no email notifications indicated any activity or amount due on the account. The credit card did not generate a statement in XX/XX/XXXX despite this activity. 
XX/XX/XXXX : The circular transaction activity of {$100.00} recurring payment from checking to credit, {$100.00} overdraft from credit to checking continued. There were no interest fees charged. The ending balance in the checking account was still {$1.00}. 
XX/XX/2018: The circular activity continued in each month. No fees were charged, and the ending balance in the checking account remained at {$1.00}. 
XX/XX/2018 : The {$12.00} monthly maintenance fee is first charged. The circular {$100.00} activity continues, and the ending balance in the checking account on XX/XX/XXXX was - {$10.00}. The ending balance on the credit card is {$100.00}, reflecting a {$200.00} overdraft, less the {$100.00} recurring payment, and {$1.00} in interest charges. 
XX/XX/XXXX : The {$100.00} recurring payment to the credit card continues, but now the {$200.00} overdraft transaction ( which was automatically generated in XX/XX/XXXX on the credit card ) is reflected in the checking account to replenish the checking account balance. The ending balance in the checking account on XX/XX/XXXX was {$77.00}. 
XXXX  XXXX : The {$77.00} in the account funds the {$12.00} monthly maintenance fee in each month, while the circular {$100.00} activity continues and interest accrues on the credit card balance. The minimum payment of {$25.00} is covered by the {$100.00} recurring payment, so no email notifications are generated to indicate a payment is due. 
XX/XX/XXXX : Another {$200.00} overdraft is reflected on the credit card statement. The balance on the credit card is now {$220.00} XX/XX/XXXX : The {$200.00} overdraft transaction hits the checking account statement, causing an ending checking balance of {$81.00} XXXX XXXX : The {$81.00} covers the {$12.00} monthly maintenance fee in each month, while the circular {$100.00} activity continues and the minimum payments are met by the recurring {$100.00} payment. 
XX/XX/XXXX : Another {$200.00} overdraft is reflected on the credit card statement. The balance on the credit card is now {$360.00} XX/XX/XXXX : The {$200.00} overdraft transaction hits the checking account statement, causing an ending checking balance of {$85.00} XX/XX/XXXX : The {$85.00} covers the {$12.00} monthly maintenance fee in each month, while the circular {$100.00} activity continues XXXX XXXX : The circular {$100.00} activity stops without notification. I did not make any changes to the account to cancel the recurring payment or remove the overdraft protection. This causes the account to become past due, triggering a {$25.00} late fee. The credit card balance is now {$460.00} XX/XX/XXXX : The credit card account balance is {$510.00} XX/XX/XXXX : My XXXX XXXX XXXX monitoring service notified me that a 30-day late payment report had been made by Bank of America. At this point, I was not aware of any activity on the account since I paid off the credit card balance in XX/XX/XXXX. Since XX/XX/XXXX, no email notification had indicated that a payment was ever due, even when the account became past due XX/XX/XXXX : Email notification that credit limit was reduced from {$7700.00} to {$600.00}. 
XX/XX/XXXX : I spent several hours on the phone with Bank of America representatives in both the checking account and credit card teams. To prevent my credit score deteriorating further, I agreed over the phone to pay the current minimum payment ( including overdue amount ) of {$110.00} immediately, in exchange for the removal of the delinquency on my credit report. I was advised that the remaining balance of {$330.00} is still owed, and can only be refunded if the checking account team would agree to refund the monthly maintenance fees, which they have refused to do except for a single {$12.00} courtesy refund made by a front-line rep before I escalated the issue XX/XX/XXXX : I attempted to cancel the {$100.00} recurring payment from the checking account to the credit card. Even though the payment and overdraft stopped functioning in XXXX, the payment still showed as active. When I went to delete it, it would simply delete it for the current month and push it back to the following month ( see photo attached ). As of XX/XX/XXXX, this issue appears to be fixed as I was able to delete the recurring payment completely. 

Attempted Resolution : When I contacted Bank of America to resolve the matter, they agreed it was a peculiar situation and confirmed that a checking account incurring maintenance fees but with no activity would typically be considered dormant and closed. However, because the overdraft and recurring payment tools allowed theoretical sums to be shuttled back and forth between the checking and credit card accounts, that satisfied the bank 's activity criteria to keep the account open. Even though I was able to explain that i ) this was clearly not customer-generated activity, ii ) I had no idea it was going on, and iii ) I did not receive any notifications from Bank of America that a sum was payable, the checking account team claimed it was not a bank error and therefore they were powerless to offer even a goodwill adjustment to the maintenance fees. The credit card team were more supportive, agreeing to refund a late charge and retract the delinquent report to the credit bureaus, but only if I agreed to pay the current overdue amount of {$110.00} ( and ultimately pay the remainder of the balance on the card, including any interest fees charged ). I agreed to pay the overdue amount over the phone on XX/XX/XXXX in exchange for the removal of the delinquency, in order to prevent any further damage to my credit score, which dropped from 800+ to the low 700s  as a  result of this single incident. 

I feel that Bank of America took advantage of the fact that the issue straddled two departments ( credit and checking ) to pass me back and forth between them with each side claiming they couldn't resolve the full situation. I spent more than 3 hours on the phone, receiving vastly different responses to factual questions. I was promised call backs that never occurred. Of note, the front-line reps were typically sympathetic and agreed the situation was unusual, and offered a token goodwill gesture ( 3 maintenance fees refunded, or {$36.00} out of {$510.00} ). The level 2, 3 and 4 managers were much more rude, insisting the issue was my fault because I set up the recurring payment and claiming that the terms & conditions of the online banking permitted Bank of America to charge fees based on this type of synthetic activity. When I asked the representative if he was effectively telling me to go [ expletive ] myself, he responded, yes, that is what I am saying. 

The especially troubling part of this is that certain reps admitted they had seen this situation before. The issue arose from Bank of America 's decision to convert the fee-free eChecking account I had opened in XXXX to a checking account incurring a {$12.00} per month maintenance fee in XXXX. At this point, I was no longer using the account and assumed it simply had no activity, and no fee. Though I had set up the recurring payment and overdraft protection that ultimately created the issue here, I did so in good faith to pay off a credit card balance on time, without any idea ( or warning ) that it could behave in the manner that it did. The recurring payment and overdraft protection were set up at a time in which the account had no maintenance fee, and when Bank of America 's online banking tools were especially primitive, so I don't think I could reasonably have been expected to anticipate that - when Bank of America would later introduce a monthly maintenance fee - they would interact in a way that would generate sufficient transaction activity to prevent the account from being closed but insufficient activity to trigger any sort of email or postal correspondence to make me aware of the fees being incurred.