I had a small bank account that I used for paypal. The bank was bought out last year and I never got around to closing the account. I was told that when the account reached a zero balance, the account would automatically close.

What no one told me though, is that any fees they imposed (non-use fees) might drag the balance BELOW zero. In other words, they kept taking fees out for non-use creating a negative balance instead of stopping at zero.

I received a letter today demanding $102.50 for "overdrafts" (never, ever used the account once) and if I did not mail them a check I would be reported to the credit bureaus.



So, I got on the phone and the clerk could not do anything for me when I told her I wanted the fees waived and the account closed. I asked for a supervisor. She called the supervisor and got the fees refunded, a hold on the account, a zero balance, and is requesting a letter from the branch this account is anchored from confirming all this.

Soooooooooo the zero balance part may be true but if the fees imposed take you below that balance you are screwed.

Needless to say we will never bank with Citizens again.

I think the terms are different from bank to bank. You have to go through the details when you sign up.

Citizens bank? Why do you work with them? Are they any good?

And you have to read the paperwork even more closely when they change hands because things will sure be different.... I had to close my mad money savings account because if the balance dropped below $300, the bank that took over our bank would charge $5 a month SVC fee...and I was only allowed to take money out 3 times a month or be charged $2 per transaction...didn't make any difference that I'd had the account for over 20 years...

Actually, I never signed up with them. They bought out my smaller bank. At the smaller bank I was given free checking as long as I paid one bill online per month. I was told via letter from the small bank (during the sale process) that all terms & conditions of my small bank would transfer to Citizens. When Citizens bought out the small bank their letter disputed that. They also had the clause about the zero balance.

I did not realize that if they charged me fees (a non-use fee? I should have read the fine print better) they would take the balance negative rather then stop at zero.

I know that for true. They really are .

A number of banks have inactivity fees. Especially the free checking accounts.

I had one that drops you down from a free checking to a regular checking after 180 days and then starts charging you $5 per month. If you have nothing in the account, it gets kind of silly with a negative balance.

<shakes head>

Don't you receive statements showing the balance dropping from month-to-month?

I have a free checking account I used solely for paypal. It's had a zero balance for a few months and they sent me a letter saying that if a deposit wasn't made within 10 days that the account would be closed. I let them close it....I'll just get another one If they started charging me I would have close the account the first month of the charge.

Yes, but that would have required my looking at them. (Don't show Goos this post, it drives him nuts that I do not look at financial statements.) I (foolishly) took their word on the zero balance and never got to the bank to close out the account.

I have a Citizens account, and was told the same thing (about zero balance closing it). Except for me it actually worked. I wonder if you somehow got caught in the takeover of Charter One, even though they said you wouldn't?

Probably so. I will call back next week to make certain this all went through.

Why am I not surprised it's Citizens

Best of luck, I hope you get it resolved.

Yeah, that happened to me - inactivity or below balance fees or something. I think it got down to like $50 in arrears before I got a nastygram from the bank. Of course I'm not gonna pay it - if any of you guys actually pay this cr@p, then you're fools. The banks try to scare you with their junk about reporting you to some credit agency or some bank clearing house so you can't open accounts in the future. For the love of Pete - don't swallow it. Pay your bills on time and you'll have a good credit rating, end of story. Whatever you do, don't let some $-grubbing bank scare you into doing something silly, like paying their BS fees.

I called today to confirm the account was closed. I was assured it would be closed within 24 hours, but hey....

It was closed February 6th, two weeks after my request.

There is a bank clearing house, called ChexSystems, which operates sort of like a credit reporting agency for banks. And it is possible for them to report you on there, which can make it difficult for you to open new accounts. And because it's not regulated like credit reporting agencies, it's difficult to dispute bad marks. Now I agree you should fight bad fees, etc, but there are things that banks can do which make your life difficult.

Bad marks, schmad marks - What you wrote is exactly what the banks want you to think. They *want* you to be afraid of them and their "reporting agencies". At the end of the day, all you have to do is pay your bills - your legit bills - on time. As to opening bank accounts, anybody on this board prolly already has 10!

love your attitude...you are absolutely correct!

Contact your states department of finance, the regulator of banks in your state. File a formal complaint that the bank failed to keep there agreement with you. Even after banks change hands same rules apply until you are notified of some change. They may say that when the bank changed hands that the rules changed. But then if the rules did change, they had an obligation to notify you. They may say they sent the rule changes out with a statement but how they know it actually was in with the statement is to be determined. If the change occurred and you were not told, then the old agreement stays in force until told.

If they threaten you include this fact in your complaint and if necessary pay them the money under threat. Better to pay the money and later report the violation to the regulator for arbitrary changing the rules and then forcing penalty payments.

You can think that if you like about ChexSystems, and think that if you like about Credit Reporting agencies too, and if you never need a new bank account or credit then you're right - the marks don't matter at all. But when you do want a new account, and when you do want new credit (home loan, auto loan, etc), you will start to quickly care what banks and credit agencies think about you. The attitude you have may work for you, but when you want something from the banks you have to play their game. I'm not arguing you pay frivolous fees, I'm just saying it's better to argue with them and have fees removed than to just say "I'm not going to pay it" and stop communicating with them. In neither case do you pay the fees, but the latter gets you a bad mark that could come back to affect you in the future.

I believe the appropriate cliche is that you catch more flies with honey than vinegar. Arguing nicely and presenting your case will get you further in the end.