Vanguard checking -- Use it or lose it

[vg55]

Vanguard removed my check writing service and I bounced a check to the Federal and State Tax authorities. Now dealing with the penalties.

It appears that I had not written a check on my Vanguard account in more than 3 years. So to "protect" me, Vanguard removed the check writing feature.

I apparently had been informed in an email with the subject line "important information about your check writing service." But I did not open and read the email. I would have opened an email with the subject line "We are cancelling your check writing privileges" or better yet, as a Flagship member -- they could have called me to ask if I wanted to keep this service.

In order to request the IRS to withdraw the penalty action, I have asked Vanguard for a simple letter to confirm that I had more than sufficient funds in the account to cover the check, but had lost check writing privileges in the 3 weeks prior. They are balking. So much for Flagship service.

So my cautionary tale is -- use your check writing privileges at Vanguard or they will "protect" you.

[spae]

Thanks for the info. I was considering enabling check writing for use in case of emergency, but if checkwriting is going to get disabled if I don't use it, maybe I'll try having a spare checking account at one of the places people recommend, like Ally, Schwab, or Fidelity.

Some posters have noted that their funds were inaccessible for months during the savings & loan crisis so it seems prudent to have another source of funds even if my bank account is insured on the off chance I both lose my job and my bank becomes insolvent.

[sport]

I would think that if someone received an email from Vanguard with "important information" in the subject line, they would at least open such an email. It seems the OP brought his/her problem upon himself/herself.

[neurosphere]

Thanks for the info. I was considering enabling check writing for use in case of emergency, but if checkwriting is going to get disabled if I don't use it, maybe I'll try having a spare checking account at one of the places people recommend, like Ally, Schwab, or Fidelity.

I guess the alternative is to write a check from the account/fund each year to ensure it stays active.

Vg55, thanks for the warning. I have two Vanguard checkbooks here which I haven't used in probably 10 years. I probably also got such an email. In fact, I probably read it and thought "so what? I don't anticipate writing any checks from these accounts" So why do I still hold onto the checkbooks?

[Broken Man 1999]

The lesson to be learned here is to open and read emails from Vanguard with the subject line "important information about your check writing service."

Seriously, OP, why on earth didn't you open and read it?

Broken Man 1999

[arf30]

I apparently had been informed in an email with the subject line "important information about your check writing service." But I did not open and read the email.

This made me laugh, but then I realized I don't read emails like this either.

[Silk McCue]

Sorry but this isn't in any way Vanguard's fault. They noticed you, you saw the header of the notice and chose not to read the details.

Cheers

[goingup]

It's unfortunate. I'm sure you're not the only one who got stung by this, even though there was some communication from Vanguard about it. Frankly if they had broadcast the change half as much as they bombard us with PAS advertisements, no one would have missed it!

Some months ago they sent the notification that check holders would have to "opt" in to continue to have check writing capability.

I'm not sure what recourse you have with the IRS. Maybe start a thread to ask if anyone has been able to get penalties waived for a special circumstance such as this.

[susa]

Not knowing anything about how this works at Vanguard - would it have been possible to keep the Checking in Active status if a small monthly automatic ACH would have been setup from an external bank, ie. Bank of America <--< Vanguard ?

[PluckyDucky]

For all those saying OP should have read the "important" email, do you know how much junk mail, even from reputable companies, calls itself important? I get tons of emails from Vanguard and don't read them all.

OP is right, the email should have said what it was about in the subject line. Calling itself important is basically equivalent to a marketing email.

IMPORTANT! Then in the body, "Take advantage of our new promotional offer!"

[sport]

Not knowing anything about how this works at Vanguard - would it have been possible to keep the Checking in Active status if a small monthly automatic ACH would have been setup from an external bank, ie. Bank of America <--< Vanguard ?

No, this would not work. The account would be active, but that would not keep the check writing active.

[Nowizard]

Ours suspended, too, several years ago for not writing checks. Not sure how that protects us but does make us think ahead when needing cash from the MM account. You can still call or have money wired, as you know.

Tim

[drawpoker]

To my knowledge, VG started sending these emails around 3 or 4 years ago. At least I know that this year's one was the 3rd time for me (I have it on my GinnieMae fund).
You have the option of either clicking "yes" keep checkwriting option. Or just a write a check ($250 or more) Whichever, the action is good for a full year, the option stays, and you won't get the notice again for 12 months.

Who would ignore a message from one of their financial institutions with subject line "Important message about your check writing....." Should VG send it as "Here's some trivial garbage information you can just toss... "

Just to get peoples' attention, ya know

[JediMisty]

For all those saying OP should have read the "important" email, do you know how much junk mail, even from reputable companies, calls itself important? I get tons of emails from Vanguard and don't read them all.

OP is right, the email should have said what it was about in the subject line. Calling itself important is basically equivalent to a marketing email.

IMPORTANT! Then in the body, "Take advantage of our new promotional offer!"

+1

[drawpoker]

For all those saying OP should have read the "important" email, do you know how much junk mail, even from reputable companies, calls itself important? I get tons of emails from Vanguard and don't read them all.

OP is right, the email should have said what it was about in the subject line. Calling itself important is basically equivalent to a marketing email.

IMPORTANT! Then in the body, "Take advantage of our new promotional offer!"

I think you misunderstood. VG does not send these emails thru people's regular email addys.

They are generated within the VG online customer's account and VG's secure email portal.

The "tons of emails from Vanguard" you refer to are coming thru your regular email addy that VG has on record for you.

Of course, it is possible that the OP did not log on to their VG account for a period of over a year. But, um, that would be a subject for another thread

[PluckyDucky]

...

Of course, it is possible that the OP did not log on to their VG account for a period of over a year. But, um, that would be a subject for another thread

You're right, I wasn't thinking about the in-account secure messages.

I rarely ever check those.

[socaldude]

Thanks for the info, I have two ck writing accts. at Vanguard, and I ( prob. 50% of us) would have deleted the e-mail with that generic title.

[EddyB]

I apparently had been informed in an email with the subject line "important information about your check writing service." But I did not open and read the email.

This made me laugh, but then I realized I don't read emails like this either.

During the past five years, I have received more than 700 personal emails with the phrase "important information" in the subject line.

[EddyB]

Of course, it is possible that the OP did not log on to their VG account for a period of over a year. But, um, that would be a subject for another thread

Lots of messages on this forum encouraging people not to be too obsessive about checking their accounts....

[drawpoker]

That is intended for younger folks. In the accumulation phase of investing. Not for retired people who are in the draw-down phase.

[Silk McCue]

Of course, it is possible that the OP did not log on to their VG account for a period of over a year. But, um, that would be a subject for another thread

Lots of messages on this forum encouraging people not to be too obsessive about checking their accounts....

However, no one is telling anyone to ignore emails from their financial service providers nor to never log into their accounts. No need to argue every point made here.

You can't hold the service provider responsible for the outcomes when you ignore their communications that you have agreed to receive. Period, end of story.

Cheers

[drawpoker]

.....have two ck writing accts. at Vanguard, and I ( prob. 50% of us) would have deleted the e-mail with that generic title.

50% of us? I don't believe half of BH's would.

As long as this ridiculous argument is going to continue, how do you think VG would notify you if you bounced a $10,000 check you wrote on MM, GinnieMae, Treasuries, whichever fund. Because the share price dipped and there was only $9,900.

Am just making a wild guess here, but I imagine they would send an email thru your online account access secure portal.
With a subject line of "Important Information regarding your check writing..... Just so you wouldn't miss it, they would likely send you an email thru your regular email addy telling you "You have an important message at Vanguard, log on to your account and click on new messages"

Then you could delete that one too

[brainstem]

same thing happened to me -- but I did not get an email - no contact from my rep
they might have sent an mass mailing that I did not see
I did not get a direct contact from my Flagship rep
I caught the problem by being paranoid and checking to see if they had changed bank intermediaries
I was royally annoyed - not exactly Flagship service
Had to go thru the hassle of reapplying for check writing privileges

[baconavocado]

This is good to know, thanks for posting.

[whodidntante]

Consider paying your taxes with a rewards credit card. Since Vanguard does not offer a credit card, it will work.

Also, Vanguard REALLY should have contacted you instead of bouncing tax payment checks. I give Big V a wag of my finger.

[littlebird]

Sorry this happened to you. It’s another example of Vanguard’s very poor communications skills, of which I was a victim several times.

[mickeyd]

I recall getting notification from VG regarding the PMMF checking account a while ago. I just wrote a check for $250 and deposited it in my checking account to establish that I wished to continue the check writing feature. No problem since that time.

[pyld76]

This is interesting.

I keep checkwriting on a portion of my emergency funds that remains at VG because of their money market yields. If all goes well, I'll never write a check on it. As it stands, I've written 1 in 3 years, and only then to see if it actually worked as advertised.

Situations like the OP remind me that while costs are forever, pound foolish (or, what I'll call what VG chooses to spend on customer service) is also priceless.

[drawpoker]

I recall getting notification from VG regarding the PMMF checking account a while ago. I just wrote a check for $250 and deposited it in my checking account to establish that I wished to continue the check writing feature. No problem since that time.

No problem maybe, but you sold shares when writing that check. Triggering a taxable event.

Why not just click on the "yes, continue check writing" choice you had in the notification

[mickeyd]

Triggering a taxable event.

Not true for MMF.

[drawpoker]

That's right, I forgot, that has a stable $1 per share arrangement. My bad.

[Broken Man 1999]

Depends on where your MMF is located. If it is an IRA, or other tax-deferred account, you will have taxes. If in a taxable account, no taxes related to writing a check.

I know this all to well.

Broken Man 1999

[sport]

Depends on where your MMF is located. If it is an IRA, or other tax-deferred account, you will have taxes. If in a taxable account, no taxes related to writing a check.

And, if you write an IRA check for a QCD, there are also no taxes. Of course, you must be at least 70.5 years of age.

[mptfan]

During the past five years, I have received more than 700 personal emails with the phrase "import information" in the subject line.

Really? What is "import information"? Are you in the import/export business?

[drawpoker]

..... If in a taxable account, no taxes related to writing a check.

Just to clarify, you are speaking strictly of the MM funds with their stable $1 share price. Me writing a check on my GinnieMae fund is either going to represent a c.g. Or a loss.

You have a basis for your shares in any taxable account, whether it is one with check-writing privileges or not. Selling shares (writing that gnarly, pesky check that spawned this thread) unless at the exact same price you bought them, is going to trigger "taxable" event. Maybe the event is favorable to me, maybe favorable to the IRS

btw, who would keep IRA money in one of the $1 stable price MM funds? That sounds nuts.

[fru-gal]

I don't have one at hand, but I believe the Medicare monthly summaries come marked Important Information and in my home go intermediately into recycling unopened.

I don't know how Vanguard check writing works, but I touch all my accounts subject to activity stuff about every six months.

[drawpoker]

That's okay, toss 'em.

The real Medicare Summary Notice (MSN) mailings come every three months, not monthly.

Obviously, whatever you are throwing out are fakes

[Broken Man 1999]

..... If in a taxable account, no taxes related to writing a check.

Just to clarify, you are speaking strictly of the MM funds with their stable $1 share price. Me writing a check on my GinnieMae fund is either going to represent a c.g. Or a loss.

You have a basis for your shares in any taxable account, whether it is one with check-writing privileges or not. Selling shares (writing that gnarly, pesky check that spawned this thread) unless at the exact same price you bought them, is going to trigger "taxable" event. Maybe the event is favorable to me, maybe favorable to the IRS

Yes, but the last few posts are/were discussing MMFs, no? But, to your point, there are many other sells that would trigger taxes in a taxable account.

btw, who would keep IRA money in one of the $1 stable price MM funds? That sounds nuts.

Agreed! My Vanguard Federal MMFs are the conduits to my credit union. I have multiple ways, and sometimes use a couple of different ways to round up enough $$$ to pay my expenses. If I am pulling from several places, I find it easier to just let the Vanguard Federal MMFs (they are my settlement funds) collect as I sell whatever and then I make one transfer a month to fund the first 2-3 weeks of next month's expenses. I have no other MMFs at Vanguard. After my monthly transfer my Vanguard Federal MMF has a very, very small balance. The lifespan of a dollar settled in the accounts is only a couple of weeks.

I do not hold any more cash/near cash than I absolutely have to have for paying my expenses. So, yeah, I don't like holding dollars in IRA MMFs, either. I strive to have the fewest $$ I can and still pay my bills.

MY BOLD/ITALICS.

Broken Man 1999

[criticalmass]

Consider paying your taxes with a rewards credit card. Since Vanguard does not offer a credit card, it will work.

Paying taxes with a credit card would work even if Vanguard DID offer a credit card.

I used a 2% rewards credit card and netted a very small cash back. I would have like to use my 2.5% rewards credit card, but they don't pay rewards on tax payments.

[criticalmass]

Vanguard removed my check writing service and I bounced a check to the Federal and State Tax authorities. Now dealing with the penalties
.....
So my cautionary tale is -- use your check writing privileges at Vanguard or they will "protect" you.

Thank you for sharing. It's interesting how so many folks hear are quick to blame you. I'll share my story so they can blame me too:

Vanguard removed my check writing privileges as well. I found out by chance, just checking my accounts and what is enabled for each account.

Perhaps they sent me an email. If they did, I never saw it--but spam filters swallow many emails. Their secure messages are nice, but secure messages disappear rapidly from that system, leaving no trace.

I DO receive tons of "Important Information" emails. Usually they are for viagra advertisements, get rich quick scams, lost relative fortunes found, and emails of similar importance.

What Vanguard COULD have done and what my Not-For-Profit credit union *DOES* do is call customers if a check is presented and there is a problem before returning it unpaid. They certainly could have emailed you "Your Check is Bouncing, Please Call" if they are too busy to call. This is a customer service issue. And they certainly could write a letter to their FLAGSHIP customer that the check bounced due to a financial institution fraud-prevention procedure, not insufficient funds.

Given Vanguard's customer service situation, it's probably better to do important banking (e.g. send money to IRS) via a local bank/credit union, and backfill the funds with ACH transfers.

[Trader Joe]

Vanguard removed my check writing service and I bounced a check to the Federal and State Tax authorities. Now dealing with the penalties.

It appears that I had not written a check on my Vanguard account in more than 3 years. So to "protect" me, Vanguard removed the check writing feature.

I apparently had been informed in an email with the subject line "important information about your check writing service." But I did not open and read the email. I would have opened an email with the subject line "We are cancelling your check writing privileges" or better yet, as a Flagship member -- they could have called me to ask if I wanted to keep this service.

In order to request the IRS to withdraw the penalty action, I have asked Vanguard for a simple letter to confirm that I had more than sufficient funds in the account to cover the check, but had lost check writing privileges in the 3 weeks prior. They are balking. So much for Flagship service.

So my cautionary tale is -- use your check writing privileges at Vanguard or they will "protect" you.

I have never had this problem. I recommend that you heck your fund settings.

[drawpoker]

......I recommend that you heck your fund settings.

Someone else in the import/export business eh, mptfan

[drawpoker]

@critical mass
They don't disappear as rapidly as you think. Even if you delete, or it says expired, you can still pull them up from the folder identified as "deleted and expired messages".

Also, this gives me a chance to correct something else. If you decide to write a check instead of just using select and click, you are good for 3 years, not 1 year. So, whoever it was here who wrote out a check had the right idea. Bought himself more time


Copy & pasted from secure Message Center:
Important information about your checkwriting service
To protect our shareholder accounts from fraud, we generally turn off checkwriting for accounts that haven't used the service in more than three years. We've noticed that no checks have been written on your Vanguard account in quite some time. Perhaps this is because, like most clients, you prefer the speed, security, and convenience of electronic bank transfer.

What we need from you

If you no longer intend to use checkwriting on your account, simply destroy your old checks. You don't have to do anything else. Your service will be automatically discontinued on September 6, and you'll receive a confirmation of this change by mail or email, depending on your mailing preferences.
If a check is received and processed on your account prior to September 6, your checkwriting service will be maintained for at least another three years.
If you don't plan to write any checks soon but still need checkwriting, select the account(s) for which you'd like to keep the service.
Thank you for being part of the global family of Vanguard investors.


Posted on 07/13/2019 5:23 a.m.
Expires on 08/27/2019 (Red lining my emphasis)

[Cheez-It Guy]

Consider paying your taxes with a rewards credit card. Since Vanguard does not offer a credit card, it will work.

Paying taxes with a credit card would work even if Vanguard DID offer a credit card.

I used a 2% rewards credit card and netted a very small cash back. I would have like to use my 2.5% rewards credit card, but they don't pay rewards on tax payments.

He was making a joke at Vanguard's expense. Basically, if Vanguard's stuff doesn't work, by being a non-Vanguard service, you could assume that it WOULD work.

[david99]

Thanks for sharing this important info.
I think that Vanguard should confirm that you viewed the email. If you do not confirm that you viewed it, they should call you.

[spae]

I'm amazed at how much victim blaming is going on here. Anyone who works in a field where people care about safety knows that blaming the operator for failing to initiate the correct manual action by picking out the correct warning in the face of a blizzard of warnings is an anti-pattern because we have half a century of evidence that people cannot be expected to do this reliably. This kind of blame isn't a solution to any problem other than perhaps helping insecure people find another reason to feel better about themselves by feeling superior to someone else.

What's at stake here is a relatively small amount of money instead of people's live or a very large amount of money, but the same principle still applies.

As numerous other people have mentioned (isn't it ironic that the people who are blaming OP are either failing to read these messages or understand them?), I get tens or hundreds of emails claiming to have "important information" in them every month and well over 99% of them are spam. I also get physical mail that's designed to look like important mail at least weekly. In both cases, it's trivial to make it appear as if the sender is a bank or brokerage that I use and some spammers use this strategy. Often, the spammer using this strategy is the bank or brokerage itself, not another institution impersonating the bank or brokerage.

[Silk McCue]

I'm amazed at how much victim blaming is going on here. Anyone who works in a field where people care about safety knows that blaming the operator for failing to initiate the correct manual action by picking out the correct warning in the face of a blizzard of warnings is an anti-pattern because we have half a century of evidence that people cannot be expected to do this reliably. This kind of blame isn't a solution to any problem other than perhaps helping people find another reason to feel better about themselves by feeling superior to someone else.

What's at stake here is a relatively small amount of money instead of people's live or a very large amount of money, but the same principle still applies.

As numerous other people have mentioned (isn't it ironic that the people who are blaming OP are either failing to read these messages or understand them?), I get tens or hundreds of emails claiming to have "important information" in them every year and well over 99% of them are spam. I also get physical mail that's designed to look like important mail at least weekly. In both cases, it's trivial to make it appear as if the sender is a bank or brokerage that I use and some spammers use this strategy. Half the time, the spammer using this strategy is the bank or brokerage itself, not another institution impersonating the bank or brokerage.

One man's victim blaming is another man's personal responsibility. If you don't open and scan/read email from your financial institutions you are responsible for the outcome.

Cheers

[Broken Man 1999]

Thanks for sharing this important info.
I think that Vanguard should confirm that you viewed the email. If you do not confirm that you viewed it, they should call you.

Perhaps Vanguard could offer a PAID service to call the client to read the emails to them.

If not a paid service, I certainly don't want Vanguard spending money to call clients who haven't read their emails. No way! That would be way too much hand-holding IMHO.

By the way, for those complaining about receiving so many emails: I hear your pain. Earlier this month I started proactively addressing that problem. On most emails from companies, there is an unsubscribe link. Use it, it works. Frankly, it works much better than I had anticipated.

For the businesses you use, you can often change your email settings to receive only certain things related to your account. That option also has worked very well.

And, if you must give an email address to be able to access something you want to read, use a dedicated email address that is only used for that purpose, instead of the email address that you use for important communications. Kinda like using a burner phone, not that I use burner phones, of course.

Finally, if you still receive an email without an unsubscribe link in your important email account, you can set up the sender's address so their emails are classified as "spam". I have a few persistent ones that I use my spam filter to weed out. However, I look through my spam folder at least once every couple of days to make sure I don't have any important emails that were sent there.

Unfortunately the Nigerian Prince attempting to give me millions still manages to get through occasionally. My last offer was $15,500,000. I'm hoping for $20,000,000.

Take charge of your emails, control them instead of them controlling you!

Broken Man 1999

[fru-gal]

That's okay, toss 'em.

The real Medicare Summary Notice (MSN) mailings come every three months, not monthly.

Obviously, whatever you are throwing out are fakes

"Each month that you fill a prescription, your drug plan mails you an
“Explanation of Benefits” (EOB) notice. "

I watch my prescription charges on the web like a hawk, so no guilt about tossing those. I suppose I should check the quarterly doc etc stuff but life is short, plus often some unknown doc's name shows up for a legitimate thing, etc. I would have to go to a lot of work to check those.

[Broken Man 1999]

Ah, just remembered that Vanguard sends me an email to let me know one of my checks has been cashed. That is very helpful. I don't remember how long it takes to have a picture of the check, but the image will be available.

So an email notification to let you know all went well with your check that was sent floating through the financial system, as it has made it's way to where you sent it.

Broken Man 1999