While the banks were sleeping on their piles of money and giving credit cards to 3 year-olds and house pets, everything was fine. Even when everything was going to seed, they still spent their money on trips for execs and jets – well until it became known to the media. Some have given “bonus” money back, canceled jet orders, and paid for their $80,000 office remodels. (Jeeze, that’s a home makeover.) But the sleeping giant has awaken.
In the last couple of months I have heard of banks reducing Home Equity Line limits saying that the home has decreased in price. That is fine and logical. I have heard of banks or credit card companies reducing limits to just above what someone’s balance was at that time. All fine and reasonable business practices even if a little inconvenient to the individual.
But in the last two weeks I heard of two things that are at least fraud on one hand and border line on the other. In one case a bank reduced the equity line below the current balance held by the homeowner and then charged for being over balance. As Borat would say, “Very niiiiice,” if you can get away with it. The homeowner, underwater already, said fine as he will just stop payments.
The second case was where a credit card company pulled money out of an bank account without any authorization. The credit card company said that the bank “gave it” to them which makes little sense. The bank coded it as a phone payment through the credit card company though the cardholder hadn’t done a phone payment in 8 months.
I have worried about identity theft but only mildly considered the idea that a credit card company has your information, if you do online or phone payments, and could just yank out so money. The credit card company said they could refund the cardholder’s money by check, not an electronic transfer and it would take 15 days.
The cardholder’s bank, who is investigating the whole ordeal, is charging DAILY overdraft fees which they say will be refunded if it is found that the cardholder didn’t authorize the payment. Wow, that doesn’t sound like fun at all.
Last year or so I opened an account at bank that I had never been to before. Because of all of the news of identity theft, even the guy who advertised his identity theft security company was hacked, I decided to have an account where the account number was never used on a check, never had online access, and never a debit or credit card. The only way the money left that bank is through someone walking up to the teller or whole-bank hacking which would happen regardless of what I did.
I know there are a lot of people having trouble so keep an eye on your accounts and the tricky banks/credit card companies.
photo via http://www.flickr.com/photos/madaboutshanghai
