Ally is threatening to close my CD

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Dude2
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Re: Ally is threatening to close my CD

Post by Dude2 » Fri Sep 11, 2015 1:52 pm

Well, if it does turn out that this is not from anybody associated with Ally, then I would consider myself compromised. Don't panic, but don't just ignore it either. Something is going on. Somebody has some info on you that they shouldn't.

letsgobobby
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Re: Ally is threatening to close my CD

Post by letsgobobby » Fri Sep 11, 2015 1:54 pm

Is someone (guapomole, dm200, others) claiming that a person could hold a standard, long term CD at a bank (3+ years), have no other activity, and potentially have all funds including the CD "escheated" to the state, legally, and with no warning whatever beyond a scammy looking letter that the customer service phone rep at the bank could not confirm as their own?

ThisTimeItsDifferent
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Re: Ally is threatening to close my CD

Post by ThisTimeItsDifferent » Fri Sep 11, 2015 2:14 pm

letsgobobby wrote:Is someone (guapomole, dm200, others) claiming that a person could hold a standard, long term CD at a bank (3+ years), have no other activity, and potentially have all funds including the CD "escheated" to the state, legally, and with no warning whatever beyond a scammy looking letter that the customer service phone rep at the bank could not confirm as their own?
Maybe even without such a letter.

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dodecahedron
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Re: Ally is threatening to close my CD

Post by dodecahedron » Fri Sep 11, 2015 2:16 pm

Christine_NM wrote:
guapomole wrote:
Christine_NM wrote:
guapomole wrote: Interest posting to the account does not count as "activity" to the state regulators that enforce escheat laws. If you found a credit union that happily ignores escheat laws then enjoy it while they still exist.
Interest on T-bills comes in as a direct deposit, not as an interest payment on the account. :oops:
That still wouldn't count as activity, nor would any other regularly occurring direct deposit or debit, under any state's escheat laws.
Would you mind identifying your sources or your professional interest in this subject? You are making a lot of legal claims. In any case, when the account holder shows up in person 5 minutes after the first phone call and is still discouraged from doing business with the bank except in a particular method that is no longer convenient for her -- well, obviously we take our money elsewhere.
Christine, I have no idea who guapomole is, but his claim that regular automated direct deposits (presumably set in motion some time in the past) would not suffice as evidence that an account is not dormant (the actual legal term used rather than inactive) seems plausible to me. Somebody now suffering from dementia could easily have set up this account and the direct deposits years ago and have totally forgotten about it.

Along those lines, I found an interesting document from a provider of credit union software that has a feature built into it that describes precisely how their dormancy monitoring software flags accounts at risk for being declared dormant.

http://www.cuanswers.com/pdf/cb_ref/Dor ... toring.pdf

It seems possible to me that because of the more local/personal relationship that credit unions have traditionally had with their members, the criteria for dormancy might be different, possibly more holistic (i.e., all relationships considered together) than for banks? In particular, it is interesting to note that the monitoring software above does not consider a member to be dormant if the member has a CD of any type. In general, I know that credit unions are regulated somewhat differently from other types of institutions because they are nonprofits.

In any case, I agree that WF totally screwed up their customer relationship with your mother and ought to have done a better job of telling her about convenient ways she could proactively manage her accounts to avoid escheatment risks (there is no escheatment provision that coming in in person is required!) and taking her business elsewhere was a good decision. Maybe WF just wanted her to come in so they could pitch a brokerage account to her? A simple phone call once a year should be enough.

letsgobobby
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Re: Ally is threatening to close my CD

Post by letsgobobby » Fri Sep 11, 2015 2:20 pm

that document says CDs make an account non-dormant.

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dodecahedron
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Re: Ally is threatening to close my CD

Post by dodecahedron » Fri Sep 11, 2015 2:26 pm

letsgobobby wrote:that document says CDs make an account non-dormant.
Yes, that's exactly what I noted in my post above (actually CDs make the entire membership non-dormant not just the CD account itself) but the document is for credit unions, which might(?) face different regulations, since they are nonprofits presumably operated in the interests of their members, unlike banks, which have a duty to maximize value for their shareholders.

guapomole
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Re: Ally is threatening to close my CD

Post by guapomole » Fri Sep 11, 2015 2:33 pm

Christine_NM wrote:
guapomole wrote:
Christine_NM wrote:
guapomole wrote: Interest posting to the account does not count as "activity" to the state regulators that enforce escheat laws. If you found a credit union that happily ignores escheat laws then enjoy it while they still exist.
Interest on T-bills comes in as a direct deposit, not as an interest payment on the account. :oops:
That still wouldn't count as activity, nor would any other regularly occurring direct deposit or debit, under any state's escheat laws.
Would you mind identifying your sources or your professional interest in this subject? You are making a lot of legal claims. In any case, when the account holder shows up in person 5 minutes after the first phone call and is still discouraged from doing business with the bank except in a particular method that is no longer convenient for her -- well, obviously we take our money elsewhere.
The part where they wanted her to come into a specific branch to handle this issue is where this doesn't make sense. They may have an internal policy that requires this but it would not be based on any of the escheat regulations. When dealing with dormant/escheatable accounts you are performing a fine balancing act between complying with regulations and not overburdening your clients.

My sources and professional interest? I started working in the financial industry in 1999 and from that time on have worked primarily with retirement plans (everything from compliance and operations to training, customer service, marketing...). Being that I worked at a relatively small bank, I had to manage other back office teams as well as the retirement support staff. Starting in 2009 I had to jump into the bank's dormant/escheat process due to unexpected staff turnover. I didn't have much time to get on my feet and start running. I literally read every state's escheat regulations since they can all have their own requirements regarding when accounts are considered abandoned, when notices must be sent, and when funds are reported/remitted. If you would like to look up the escheat regulations for your state of residence, check this website out: http://naupa.org/

I'm more than happy to answer any questions on this forum regarding: retirement accounts (as long as it isn't for investment advice), dormant/escheat, year end tax reporting (1099-INT, 1099-R, 5498...), B-Notices, and various other back office banking functions.

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Christine_NM
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Re: Ally is threatening to close my CD

Post by Christine_NM » Fri Sep 11, 2015 2:33 pm

Dodecahedron --

I think the young man we met with was totally overwhelmed by seeing the two of us immediately after the phone call. He was more interested in defending the reason for his call than in explaining the rules in a palatable way.

I only posted to let people know that banks do this sort of notification and not to assume fraud if they get a letter or call about lack of activity. It is a serious matter and must be dealt with appropriately. ETA - but without giving out information to scammers! The world is getting awfully complicated.
Last edited by Christine_NM on Fri Sep 11, 2015 2:41 pm, edited 1 time in total.
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Kevin M
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Re: Ally is threatening to close my CD

Post by Kevin M » Fri Sep 11, 2015 2:35 pm

My policy is to log onto all accounts once per quarter and download the latest statements. I log onto a few accounts frequently, but for accounts I just use for CDs, I have no reason to log on other than to do my quarterly statement check/download.

My main purpose in doing this is to make sure that I have an independent record of my account balance, so if I see something weird, at least I'll have the somewhat recent statement available to help resolve it. A secondary purpose is to make sure I can access the account, which as I mentioned above, I cannot at one credit union if there is no activity for more than one year. This then triggers a call to resolve the online access issue, and do whatever is necessary to get the account restored to active status. This thread points out that it also would alert me if there was any escheatment issue.

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dodecahedron
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Re: Ally is threatening to close my CD

Post by dodecahedron » Fri Sep 11, 2015 2:37 pm

Interesting page from bank operations advice site:
It’s always been my personal opinion that the less tellers know about dormant accounts, the better. If you have the ability, house the dormant account function within your back-office Operations Department. This way, your branch personnel would not know whether accounts are dormant or not.

Always, always, always, require a customer signature to return an account to an active status.
https://www.pandgassociates.com/index.php?id=1072

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goingup
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Re: Ally is threatening to close my CD

Post by goingup » Fri Sep 11, 2015 2:43 pm

lynneny wrote:OP again. Good points that Ally customer service reps could simply be unaware that elsewhere in the bank another group is outsourcing follow up on possibly abandoned accounts to some cut-rate** subcontractor in another state. (The rep didn't recognize the out-of-state Atlanta, Georgia P.O. Box address on letter I got and even said any communication on behalf of Ally would be from a Pennsylvania address). And that none of this activity is noted on customer records, either through disorganization or as a security measure.

So I'm looking forward to their loss prevention department getting back to me, and hope I'll find out if this is just internal lack of communication at Ally, or possibly a bigger deal. And I want to at least be sure we all agree my account has been verified as active and not escheatable (if that's a word).

**I say cut-rate because, unlike my Ally statements, the letter was on cheap, flimsy paper, and the purple Ally logo was in black as if it had been photocopied from the real thing. Scammer or penny-pinching subcontractor.
OP-
Please come back and tell us what you learn from the fraud dept. I'd be willing to bet money it's an Ally-induced mix-up. Have you heard this saying?

"Never attribute to malice that which is adequately explained by stupidity" It's call Hanlon's Razor. From Wikipedia https://en.wikipedia.org/wiki/Hanlon%27s_razor

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dodecahedron
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Re: Ally is threatening to close my CD

Post by dodecahedron » Fri Sep 11, 2015 2:44 pm

Another interesting page from the same site I previously linked, "Solutions to reducing your dormant accounts."

https://www.pandgassociates.com/index.php?id=911

This gives me some new insights into why banks charge inactivity fees. They are costly to monitor and they potentially expose the bank to liability for internal employee malfeasance.

If a bank has any sense there might have been internal employee malfeasance on a dormant account, I can now understand why the bank might want to ask the customer to come in person to authenticate her identity.

Yes, there are telephone authentication options but if the bank thinks someone inside has been attempting to remove funds from a dormant account, they might prefer to see the customer in person. (Obviously not a reasonable request for Ally, of course!)

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dodecahedron
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Re: Ally is threatening to close my CD

Post by dodecahedron » Fri Sep 11, 2015 2:51 pm

goingup wrote: Please come back and tell us what you learn from the fraud dept.
Goingup, the OP posted yesterday (I believe) that customer service told her that the security department would contact the OP for followup within 3 to 5 days. Even then I suspect they will be asking questions and gathering information for analysis and further research rather than providing answers right away.

guapomole
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Re: Ally is threatening to close my CD

Post by guapomole » Fri Sep 11, 2015 2:59 pm

letsgobobby wrote:Is someone (guapomole, dm200, others) claiming that a person could hold a standard, long term CD at a bank (3+ years), have no other activity, and potentially have all funds including the CD "escheated" to the state, legally, and with no warning whatever beyond a scammy looking letter that the customer service phone rep at the bank could not confirm as their own?
No, that is not what I'm saying at all. In fact, most states (not all) state in their abandoned property regulations that automatically renewing CDs are exempt from the abandoned property regulations for the first term. Meaning that if you open an auto renewing 5 year CD, during that first 5 year term the account cannot be considered abandoned property even if they have no contact with you the entire 5 years. Once the first 5 year term ends, in most states the account is subject to the same abandoned property requirements as all other accounts even if it's renewed for another 5 years. There are a small number of states that say that an auto renewing CD must renew "X" number of times before it can be subject to that state's abandoned property regulations. Every state has within it's abandoned property regulations what are called "due diligence" requirements that a holder of property must adhere to. These requirements tell the holder when they must notify the property owner that their property may be considered abandoned at a specific point and subject to escheatment to the property owner's state of residence. if a holder does not comply with their due diligence requirements and escheats property anyway they could be exposing themselves to significant financial liability. Most states go as far as to dictate what font size, header, and verbiage must be included in the dormant/escheat notice, but there are some states that go no further than to state a notice must be given at a certain point in time with no specific guidance beyond that. While a customer service rep would generally not be included in the group of people with which the list of dormant accounts is shared with, they should all be trained to properly respond to an inquiry regarding receiving a dormant/escheat notice from a customer. They should all know that it is important to verify who they are speaking with, the account in question, and that it is critical that they document the contact made with the account holder and update the account with the date of last contact. They don't need to know any of the details of the letter to properly respond in this situation. From what was posted here, this particular customer service rep failed significantly.

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Christine_NM
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Re: Ally is threatening to close my CD

Post by Christine_NM » Fri Sep 11, 2015 3:08 pm

dodecahedron wrote:Interesting page from bank operations advice site:
It’s always been my personal opinion that the less tellers know about dormant accounts, the better. If you have the ability, house the dormant account function within your back-office Operations Department. This way, your branch personnel would not know whether accounts are dormant or not.

Always, always, always, require a customer signature to return an account to an active status.
https://www.pandgassociates.com/index.php?id=1072
Yes, that was the process. Come in to the branch that handled dormant accounts (not her regular satellite branch), show photo id, sign to activate all accounts. (Then issue checks to dissatisfied customer and close all accounts :happy .)
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letsgobobby
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Re: Ally is threatening to close my CD

Post by letsgobobby » Fri Sep 11, 2015 3:35 pm

So either this is fraud or incompetence, but it's not or shouldn't be SOP. Unless incompetence is now SOP, but that's for another day.

john94549
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Re: Ally is threatening to close my CD

Post by john94549 » Fri Sep 11, 2015 3:39 pm

I found this page interesting.
https://www.kansascash.com/prodweb/about_us/laws_up.php

If you click on the second link down (general definition of unclaimed property, "Property presumed abandoned; general rule"), it brings up a fairly-easy-to-read definition.

While Kansas may, or may not, be representative, I'm just saying it took me about five minutes to find out Kansas escheat laws.

Suffice it to say, at least in Kansas, you really have to try hard to have property escheated. And even then, it's relatively easy for you (or your heirs) to get it back.

As an aside, this thread took me back to 1973, when I took "Property" in my first year of law school. To say the least, the law of "escheat" is one of the more arcane areas of law. I don't recall ever running into a colleague who held him or herself out to be a specialist in "escheat law."

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