B of A Online Bill Pay takes advantag...

B of A Online Bill Pay takes advantage of customers

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SF Thom

San Francisco, CA

#1 Jan 31, 2006
Bank of America recently changed their Bill Pay option to not deduct funds from your balance until the funds are withdrawn by the payee. This means that your account balance will not accurately reflect your available funds in the meantime but will make it appear that you have more available cash. This is an obvious move by the bank to collect more overdraft penalties from it's customers. However when customer service was contacted they followed the corporate talking points:

1. When I said that the on-line account ledger should act the same as a manual checking account ledger where a person would deduct the amount from the balance when they mail their bills. She said that everyone she knows does not deduct on their ledger until the funds are withdrawn by the payee - Bull Crap!

2. All the other banks do it this way (well yeah - for the same reason)

3. Customers complained that B of A was cheating them of the interest they would make by deducting the funds from the ledger before they were actually w/drawn. That doesn't even make sense and if it did well then they make a whole three cents (if even).

If you are a B of A Online customer - call and complain.
CJ in CA

San Jose, CA

#2 Feb 14, 2006
I was also very surprised by the change in BofA's Bill Pay. I wondered if there were some lawsuit somewhere that forced them to make the change, I couldn't see them voluntarily giving up all that float. I thought of the increased risk of overdrafts (and accompanying fees) as well. That could be the motivation for sure. The b-----ds have jacked up the fees on overdraft protection so much that a covering transfer from your savings account now costs as much as a bounced check used to not so long ago. Does anyone have the real scoop on the Bill Pay changes?
SF Thom wrote:
Bank of America recently changed their Bill Pay option to not deduct funds from your balance until the funds are withdrawn by the payee. This means that your account balance will not accurately reflect your available funds in the meantime but will make it appear that you have more available cash. This is an obvious move by the bank to collect more overdraft penalties from it's customers. However when customer service was contacted they followed the corporate talking points:

1. When I said that the on-line account ledger should act the same as a manual checking account ledger where a person would deduct the amount from the balance when they mail their bills. She said that everyone she knows does not deduct on their ledger until the funds are withdrawn by the payee - Bull Crap!

2. All the other banks do it this way (well yeah - for the same reason)

3. Customers complained that B of A was cheating them of the interest they would make by deducting the funds from the ledger before they were actually w/drawn. That doesn't even make sense and if it did well then they make a whole three cents (if even).

If you are a B of A Online customer - call and complain.
Deitrich Zook

Cortland, NY

#3 Feb 24, 2006
In response to SF Thorn: The float is worth it to the bank. Bank of America had 35 million customers in 2004 (probably more now). If, on average and at all times, the bank could keep $100 of each customers money the total amount would add up to $3.5 billion! It the bank could make 5% interest on that $3.5 billion float they would make about $375 million per year. Or, with your assumption that the bank might make just 3 cents on each payment, assuming each customer makes one payment per month the bank would make about $1 million per month. The interest I calculated would, in reality, probably be lower because not all customers use online bill pay and the float only lasts for a few days so the $100 average per customer I used as an assumption might actually be lower.

Similar to CJ in CA, when I saw the change I wondered if someone filed a lawsuit.

Of course, even if the float is profitable the increased number of overdrafts may be more profitable.

Overall I think it is more fair to keep the money in the customer’s account until the funds are paid to the payee. To protect against overdrafts the bank could offer an “available funds” figure in addition to an “actual funds” figure.
Brian from DC

Raleigh, NC

#4 Feb 28, 2006
I hate this change too. I'm going to complain and complain. I'm now going to have to pay using my payees website payment programs instead of this. The money will get deducted quicker than having to wait. I hope they change this back.
Nathan

Tomball, TX

#5 Mar 3, 2006
This is terrible. This bank does nothing but scheme up ways to get more money from customers short of just knocking them over the head and stealing their wallets. Moving banks after having so integratd my life into bill pay is going to be painful, and I have no choice. I'm tired of being taken advantage of. This is just too much. We use bill pay to help her parents with bi-weekly payments, and they have gone as much as 2 weeks without getting the check. Just imagine, all 50+ bill pays, acting as regular, unpredictable checks. They will be collecting overdraft fees hand over fist, even moreso than the "deduct them in order of largest to smallest" technique. To hell with Bank of America.
Lucid

United States

#6 Mar 6, 2006
Does anyone know of another bank that immediately withdraws the funds when payments are made, instead of waiting for the payee to cash the payment? I want to find another bank to handle my accounts.

I've always liked BOA, but this change is going to cause me to overdraft my account for sure. I have no choice but to look for another financial institution.
Mark

Wilson, NC

#7 Mar 6, 2006
BB&T Corp.( www.bbandt.com ) will automatically withdraw funds. This may not be convenient for those of you out west however. I used to bank with BoA and had enough, so I switched to BB&T where I receive alot better customer service.
kimwan

Cockeysville, MD

#8 Mar 10, 2006
i feel the same way...i work for bank of america and i was on the phone with an online rep for an hour an a half regarding the new online service...when you make a trans it is shown once that auth goes thru & is taken from you avail balance , whn you return the trans it take 24-48 hrs for the credit to be applied back to the avail balance...i never seen it for 1 week and they kept telling me that it was credited back into my balance....bank of america have some real issus that they don't even care about fixing and i feel ashame working for this company.
kimwan

Cockeysville, MD

#9 Mar 10, 2006
and another thing the rep explained to me that the reason for the change was because b of a employees were complaining and wanted something different...it wasn't even about how the customers felt...wow
SF Thom

San Francisco, CA

#10 Mar 14, 2006
Actually on my point #3, I was referring to the amount of interest the customer would make given the low interest of checking accounts and average amount of general bills, not the interest the bank would make in holding funds. And 3 cents was just an arbitrary amount to make a point. That said, perhaps my understanding of this was wrong, I thought the on-line ledger showed the amount available for use, not reflective of the actual amount in your account. The funds used for bill pay would be deducted from amount available, but not deducted from your actual funds until withdrawn. The bank is not holding funds. That is why I made the comment that #3 did not even make sense.
Vishnu

Laurel, MD

#11 Mar 14, 2006
I am coming back from the restuarant, and Bank of America says my account is 0ver $800,000 in overdaft fee. I haven't made that much money in my whole living life. WHAT IS GOING ON? I can't get incontact with a customer rep either, the lines are busy. What is going?
cwilson336

Trenton, NJ

#12 Mar 29, 2006
Ok, so I've been corresponding on this new bill pay for over a month now, and you should know that there are 3 possible withdrawal dates for all payments.

1. Deliver by date
2. BEFORE the deliver by date
3. AFTER the deliver by date

These dates do not necessarily correspond to when the payee receives the payment, but I'll explain that in a moment. In the meantime let's examine how the pymt could be withdrawn before you expect it to.

Let's say you're paying your mortage on the 1st. Since it's probably a large payment, you're probably counting on your paycheck from the 1st. The 1st falls on a Tuesday following a Monday holiday, so the bank recognizes additional mail time needed to ensure this check arrives on time.

To allow ample processing and mail time, the bank sends the check to the mortage company on the 27th. It arrives at the mortage company on the 29th. They presented it for payment on the 30th. Since you don't get paid until the 1st, there are insufficient funds in your account. The mortgage company could then legitiamately return the payment for NSF. You the customer are now going to be charged fees by both BofA and your mortgage company, not to mention the potential for late fees and other penalties.

Now about the deliver by date. I pay a charitable organization twice per month and BofA sends them a check for each payment. Since I know them well, I asked to have the check to hold it and see what happens with the payment. I/they receive my payment to be delivered by March 23rd on March 21st (see my above scenario). I still have that check in front of me, here on the 29th, so it has NOT been presented for payment. However, the funds were STILL WITHDRAWN on the 23rd. So the case that BofA had to do this to give customers back the float is false. Payments will be still be withdrawn in most cases on the deliver by date.

When I asked about this, and if payments could ever be withdrawn AFTER the deliver by date, I was told by BofA, yes. Occasionally, a check might be drawn off of your account, and in that scenario the funds will not be withdrawn until the check is presented for payment. The problem is that the customer never knows how the check will be drawn.

Finally, when I asked about BofA's failure to properly communicate this to their customers, this was the reply from Hannah Demi, of BofA e-mail customer service rep:

"Because the change in the bill payment scheduling method caused very little impact to scheduled payments, notification of the change was communicated on the date of the upgrade."

Considering my previous examples of what could happen, and my previous desire to ensure all my payments were removed from account at the earliest possible time 1st & 15th, this could have created a tremendous mess on my payments. Fortunately, it all happened when I had significant funds in my account. I did have one major payment withdraw on the 31st, a day before I thought it was scheduled be withdrawn/sent.

This whole new setup is clearly an attempt by BofA to confuse their customers and create additional overdraft and nsf fees.
Fredric

Salt Lake City, UT

#13 Apr 1, 2006
US Bank, I discovered the hard way, is also following the practice of deceiving customers about their "real" account balance in an attempt to pull in more overdraft fees.

I had made several payments with their online bill pay, and after all of their checks were mailed I noticed that my account balance went down considerably. I assumed (wrongly) that since the checks were mailed, and the bill pay page listed these payments as being made, that the "Available Funds" listed on my account were correct. The next day after I had made three or four purchases I saw that another two bill pay checks were presented that put me into the red. I now have four transactions in the negative that will put me out about $120.(4 x $30)! This is unacceptable, I must find a financial institution that will deal honestly and fairly with it's customers.

I know that the bill pay and online account websites are intentionally deceptive. The people making the decisions behind the site design want it that way so that they can bring in more fees. The effort it would take for any junior level programmer to add a "real balance" tally to the website that takes into account all bill pay checks that have been sent is so trivial that to claim otherwise would prove the defender is intentionally deceptive and obtuse, or a complete fool.

B of A and USBank suck.
Victor

Miami, FL

#14 Apr 2, 2006
Now with B of A Bill Pay, unless this is a wire payment, the transactions do not show whom was paid, but rather referred to as a check number. When you download to Quicken , you have no idea who the check was written to.
Abe

High View, WV

#15 Apr 13, 2006
Maybe some one can help answer a question. Why is it if you opened your account w/ BofA in Washington State or Idaho and you then move to the East Coast that BofA won't recognize you as a customer. I always believed that it reflects well in your credit history if you had a long standing association with one bank. BofA treats us like second class citzens, won't recognize our BofA credit cards and when we try to pay over the phone we get charged as if we had no bank account with them.
They give you the line that their systems don't recognize one another but, I worked with systems and I do know that a system can recognize other systems with an interface and when you have a BIG institution, who continually acquires smaller financial institutions, you can bet your life they can recognize one another.. If I make a deposit on the East Coast inside the bank then I go outside the door to the ATM and check my balance, I will have been credited with that deposit that I just made. Now if I try to make a withdrawl and the ATM is not functioning and I go inside the bank, they tell me I don't come up on their system and I have to provide my SS#, photo-id, supply them with my account number, then wait for them to okay a withdrawl. I was able to call my BofA on the West Coast and pay my BofA credit card and not be charged for it, on the East Coast they tell me I have to pay a fee as they don't recognize me as being part of BofA. If I complained to the attoney general's office regarding this practice would they be able to do something about it.. Isn't it great to know that the bank can swindle you out of your hard earned dollars and they even have us paying for all those lobbyist in D.C.
I'm so tired of all the banks that find ways to steal the money from us.
Slow Down

United States

#16 Apr 16, 2006
Myself, I don't find it terribly difficult to keep track of my balances whether the web site is correct or not. I know how much my bills are and I keep a running balance in a register of purchases, payments, and deposits. I know this may seem like a new idea in this fast paced world we live in, but i can't even tell you how much better I sleep at night knowing that my finances are in tact.

For those of you that aren't motivated enough to take thier finances into thier own hands and are blaming a business for trying to make money instead of yourself for not being responsible; you can see a total amount of outstanding and scheduled payments on the bill pay overview screen. Then, get this, you subtract that amount from your balance and low and behold you have an accurate record. You should really rename this blog "It's always someone elses fault."

For those of you that are getting more heated with every word you read, just remember, I don't pay overdraft fees, and I think the bank is great. Hopefully that is proof in itself that keeping track of YOUR money on YOUR OWN actually works...imagine that!! It's a wonder what responsibility brings...GOOD LUCK.
Methuen

Avon, CO

#17 Apr 28, 2006
I prefer their new method. Now it reflects the same methodology as if I mailed an actual check. This check would not show being deducted from my online balance until it was actually submitted for payment. I fail to understand the complaints of most of the people.

Another benefit of the new system is now I can see if a check has cleared. Before I had no way of knowing.
Tracy

Northbrook, IL

#18 May 24, 2006
I have the same concern about the new system doesn't reflect the real balance. I have not yet tripped by it yet, but I can definitely see possibilities of my over drawing from the account with the money they make me think I have, but I actually don't.
I called and complained about it, they told me to write an email. I did, and no response so far.
Jerry

South Windsor, CT

#19 May 30, 2006
Looking to sue BOA in Massachusetts for financial Malpractice, any attorney recomendations?
Kevin

Nashua, NH

#20 Jun 23, 2006
After coming to the table and digesting the payment sent, payment delivered and payment applied mix technology, it appears that the customer is still getting taken. For the convenience of the bank, payment delivered is THE date. Unfortuneately, most of my transactions dont get payment applied till several days later. I'm giving up my float to B of A (really Check Free) according to B of A. When a printed checks get set by Check Free and never gets cashed, lots of float money is collecting intrest that I could have collected.

Ah the cost of free Bill Pay... So how do you please everyone? Offer the option of when you want the float to happen. Starting with payment sent, payment delivered and payment applied... B of A knows the dates.. let the consumer choose the date to protect their interests. Trade off keeping close tabs on payments vs overdrafting on funds you think you have..

Just another profile option to think about... A BA benefit for their customers over their competitors!

Time to pressure up Check Free to charge BA at payment applied date instead of payment delivered date.

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