Friday, April 15, 2011

My Nightmare with Citizens Bank

The Citizens Bank slogan often used in their ads is" Citizens Bank, not your typical bank” I say Thank Goodness for that! Well, let's see how they treat their "Citizens".

My Nightmare with Citizens bank of MA and RI.

I don’t know where to begin to tell you the horrible experience I have had with Citizens bank over the last few years. So, I wil try and chronicle by time period where my nightmare all started. But, what I have experienced is that in my 30+ years banking for personal and business it is shocking that a bank like Citizens is allowed to get away with such sleazy and deceptive tactics against their customers. It is quite obvious they look for every opportunity, every crevice to swindle their customers of such bizarre fees they seem to concoct on the fly. .

Below is a letter I wrote to the MA Attorney General and Comptroller of the Currency in 2009. It all began when I realized Citizens Bank was “stacking the Deck” which is a deceptive tactic they use to exponentially trigger Overdrafts and hence swindle their customers out of Millions of dollars in overdraft fees.

Letter Begins:Here is what happened to me the week of May 18, 2009

On Monday evening May 18, 2009, while out of town, I knew I had to get to a computer to add funds to my Citizens Bank account as I had several small debits coming in. I knew I had enough to cover 12 out of the 13 incoming debits. I unfortunately never got to a computer to transfer funds. So, instead of the expected one overdraft fee, I got TWELVE overdrafts. A nice hefty profit and transfer from MY account to Citizen's account with the blink of an updated computer program. Consequently, what I did NOT realize until Tuesday morning is that Citizen's “practice” of debiting accounts is NOT, as I thought the smaller debits all paid first, or even as they are posted, BUT “intentionally” from LARGEST debit to smallest. Now, when I called Citizens I was given the canned response that Citizens does this to “help the customer pay for their most important payments first”. I was amazed that Citizens knows so much about ME and what is important to me! But, the reality was another customer suffered a very painful penalty and Citizens profited over $300. This appears to be a bank that employs extremely severe and shady overdraft fee tactics to substantially add to their “bottom line”.

But, what underscores the immediate need for the Attorney General to investigate the “should be illegal” tactics at Citizens are the following:
1). Citizens overdraft system is configured to swindle customers in the event of a checking account imbalance, and in one massive, shocking onslaught of overdraft charges..
2). Citizens overdraft system is designed to “explode” and destroy a customer’s checking account balance on a Tuesday following the weekend. This scenario is extremely dangerous and harmful to customers who don’t have a chance to correct an accumulation of 3-4 days of minor debit card charges before Citizens slams the account with massive, unbelievable overdraft charges.
3). I found out too late from a Citizens rep that when a checking account has “overdraft protection” charges will NOT be denied (and hence no overdraft charge for Citizens), they will continue to go through, even with a negative balance. Again, another unscrupulous tactic for Citizens to maximize their overdraft revenues. My seven overdraft charges were all weekend charges, all under $10 each. And, each incurred a $39 overdraft charge.4). On Tuesday May 19, 2009 I transferred enough to bring my account to a positive balance. That day I charged $6.80 for Chinese food for lunch. The next day Citizens added ANOTHER overdraft charge of $39, because with their $273 overdraft fees it brought my balance BACK to negative, so the Chinese food charge of $6.80 over drafted.

As mentioned above, on May 19, 2009 my last seven debits were all under $10 but of course didn’t clear because Citizens overdraft system was sure to deplete the funds with all the higher debits FIRST. Resulting in SEVEN $39 overdrafts for debits under $10
Citizens comment and practice of “paying the most important charges first” is of course nonsense and we all know WHY Citizens has “designed” their overdraft system to post HIGH to LOW along with numerous other unscrupulous revenue producing tactics
The scary issue here is probably at least 90% of Citizen Bank customers are unaware of the details of these seedy overdraft tactics. I know Citizens will announce that “other banks do the same thing”, but that doesn’t make these crafty practices ethical. Frankly, I am shocked such deceitful activity is legal.

I got my inspiration to contact the Attorney General from, and a story about someone who had an almost identical problem with Citizens. Any assistance you may be able to provide recovering the total $309.00 in fees discussed herein would be greatly appreciated.

END of Letter

One year later

Congress did enact a law requiring banks to allow customers to OPT OUT of what the banks call “overdraft protection”. This is where the bank will pay a debit charge when the checking account is at zero or overdrawn. In the distant past a zero balance account would decline any charges to the credit or debit card. However, during the past few years some of the larger greedy banks, like Citizens smelled an opportunity to substantially add to their profits by paying for example the $5 hamburger and then hit the customer for, in Citizens case, a $37 overdraft fee. And they would keep doing it until for example, when Tuesday morning came and all the debit posts were updated, the customer would wake up to a nightmare of a long list of overdrafts. A real joke and insult to our intelligence that they call it some kind of a protection program. So now they have to notify customers that they can opt out and if we accidentally use our debit cards with a zero balance, the charge will decline and no overdraft. So what did the Citizens rep say to me while filling out my Opt Out form, “yeah the bank is going to raise fees in other areas to make up for all that lost revenue”. Nice bank right?

Unfortunately, Congress only required banks to do this for Personal accounts (according to the Citizens rep). Hence, Citizens and some of the larger banks can still give the shaft to their Business Customers. Which I found out after Citizens posted five overdrafts to my business account. But, this time I had enough and filed a small claims against them. Citizens decided to settle out of court. About two weeks later I get a notice that Citizens is closing one of my business accounts. No big deal, I had planned to move my accounts to another bank after the first of the year which was a month away so I had time. But, the letter from Citizens was vague , no date when they would actually close the account. It just said they would send a check on December 21, 2010 for whatever balance was left. But, I had automatic payments to my business accounts (I had one personal and two business accounts).

So it was a week of great confusion. How long did I have? What payments might not clear depending on when they would close the account? So a week later I called the local Citizens branch manager. She revealed to me “they are closing ALL your accounts”. Yikes! Now I was in panic mode. I hadn’t had time to open new accounts at the other bank. I had a number of automatic payments to the Citizens accounts. She suggested I “get all the money out of your accounts”. So, I did. I know this was all about me challenging Citizens deceptive overdraft policy, which they were obviously too embarrassed to have discussed in court. But, it was quite amateurish that the bank was behaving like an angry , spoiled child and “getting even” with me. . Of course I am sure they have a “canned answer” for this policy as they do for their so-called overdraft “protection” policy. Meanwhile, imagine if I had not called my local branch to try and extract details on when, where , how they were closing my account, I would never had known they were unbeknownst to me, closing ALL my accounts.

Two days later I noticed a charge to one of the business accounts for about $1100. So I went down to the bank to make an immediate deposit from my New bank account. Next, Citizens Returned the $1100 charge but, didn’t “miss a beat”. They hit me up for Two overdrafts in the meantime. I contacted a Customer Resolution Dept on December 20, 2010 and the rep told me that the accounts were closed so the $1100 deposit was credited back. He also stated NO Future Charges would post, any charges would be declined. I pressed him on this issue asking again , “so I do not need to make any deposits to cover any charges that may post”. He confirmed “No”. I then called them again on Dec 22 and another rep confirmed the same. (But, note this and see what they did about 3 weeks later.

** Also they would NOT release these $1100 funds to me and would manipulate these funds for other accounts and whatever unique fees they could take from the $1100 deposit). Ok, I thought maybe we are getting somewhere. He also told me two checks of the balance from the two business accounts would be mailed to me on December 21, 2010. During the weeks of December 27th and January 3rd the only calls I made to Citizens were about the checks never arriving. SO they informed me they would re-issue checks.

Fast forward to January 13, 2011. I get two letters in the mail concerning the personal account and one of the business accounts. The letters stated the accounts were in overdraft (Again?) and I had to go to a Citizens Branch and make payments to cover the shortage in funds. Wait! Didn’t I have TWO conversations with Citizens reps on Dec 20th and Dec 22nd that my accounts were closed as of December 21, 2010 and NO charges would post, instead all charges would be DECLINED? The personal account letter stated I was short $234. BUt, are you ready? Here we go again. The Citizens Scam Machine continued to work its way into whatever funds I have lingering in their bank. Citizens posted TEN “service charges” for $6.99 each in my personal account during the last couple weeks of January 2011, when my accounts were suppose to be CLOSED/Frozen on December 21, 2010. As of writing this I have no idea WHERE these came from. But, being a Citizens customer for the last five years, fabricated “fees” don’t surprise me anymore. So I’ll get the scoop on this latest bizarre, unscrupulous tactic in the morning.

NEXT DAY: January 14, 2011

Below is a Continuation summary of questionable tactics Citizens is continuing to use to funnel off as much of the remaining balances to my business and personal accounts..

1). After numerous deceptive overdraft charge tactics employed by Citizens bank I filed a laws suit in small claims court in October of 2010. Citizens for reasons obvious decided to settle out of court.
2). About 2-3 weeks after the “overdraft charge scheme” settlement I received a letter that Citizens was closing one of my two business accounts, with no specific date of closure
3). On about December 13, 2010 I called the local branch manager (as identified on the “closure letter”. At that time she informed me Citizens was closing ALL my accounts (two personal and two business and I should withdraw all funds out of my accounts. Hence, I emptied my business accounts.
4). On about December 16, 2010 I noticed a charge of $1100 to one of my accounts which put it into the negative. I immediate made a deposit of $1200 to that account.
5). On December 20th I called the Citizens Business Banking Customer Advocate Group which I assume handles closed accounts. I spoke to Bret and he informed me that my accounts were closed and any future charges would be returned, hence I did not have to worry about overdrafts. (if they deny he said then ask for a copy of the taped conversation). I pressed him and asked to confirm no that I would NOT have to make any deposits. He confirmed NO. Which was evident when they “returned”, credited the $1200 deposit I made on about 12/16/10. *This is important to note, as you will read in later chronological events below.
5b). Also, Bret informed me that TWO checks would be issued to me on December 21, 2010 representing the balances of the two business accounts. I believe this is also when we discussed some of the balance would be used to offset the “$1000 Overdraft Protection” I had on my personal account.
6). On December 22, 2010 I noticed that Citizens DID charge me TWO overdrafts for the business account in #4 above.
7). On December 22, 2010 I called Business Banking Customer Advocate Group again and spoke to Christina. I asked her about the overdrafts. She said they should not have been applied and she would remove them. She confirmed what Bret said, that I would not have any more charges to my accounts because they were closed and anything remaining would be returned. ** VERY important as this story would change when I speak to Kim from the Business Banking Customer Advocate Group in later events below.
8). During the week of January 3, 2011 I contacted the Business Banking Customer Advocate Group again to inquire about the two checks.
9). On January 13, 2010 I received two letters from Citizens that my personal and business account were “overdrawn” and I needed I go to a bank and make deposits to these account. WHAT? Remember what happened in #5 and 5b above?
10). On January 13, 2011 I again contacted the Citizens Business Banking Customer Advocate Group and this time spoke to a Kim. She informed me that charges came in later and there wasn’t enough to cover the charges (since they removed the overdraft protection and also transferred money from my business accounts into my personal accounts. But, she said More money was moved from the business account (that I was told was closed out on December 21, 2010 and a check was issued for the balance, and almost a MONTH later Citizens is still manipulating my business and personal funds). QUESTION: Why didn’t Citizens just issue me a balance or invoice of what I owed instead of moving money between business and personal accounts? Resulting in this frenzy of activity and anxiety.
11). ON January 14, 2011 I noticed in my Citizens personal account about TEN “service charges” for $6.99. I called Banking Customer Advocate Group and spoke to Kim again and she said those were “overdraft service fees” because everyday my account was in the negative ws a service charge of $6.99. Reading above WHY was it in the negative? They Confirmed several times they would be NO charges (all would be returned) after December 21, 2011. BUT, with all the excuses and rational Citizens will throw up against the wall, ASK THEM, WHY didn’t you move the shortage from the business accounts as you were already dog from the beginning. AND, HOW could the customer do anything? Citizens already told me and DID “RETURN” deposits I made after the December 21, 2011 cutoff (see #4 & 5 above). WOW!
12). January 14, 2011, I noticed I had several UNIDENTIFIED charges to my account that would just say “Debit”. So much highly QUESTIONABLE Citizens bank activity and usage of my funds has been going on that I asked Kim to provide a statement that detailed what, how, why and when funds where moved between accounts. She just told me to go to a local branch. However, it is obvious a local branch would not have the capacity to solve this “riddle”. And the statements the branch managers could see are the same as my online statements with multiple unidentified debits.

As of January 14, 2010 I need detailed reports of all the activity between my accounts and the movement between the accounts. I will seek help from banking regulation agencies including the Comptroller of the Currency and Federal Reserve.

UPdate - March 7, 2011:

Also, I would like to inform you that Citizens sent me a letter I received on December 23, 2010 stating that my account XXXXXXXX was closed on December 21,2010. However, I made a car payment to Sovereign on December 17, 2010, that had a STOP PAYMENT applied by Citizens. I didn’t find out about it until early January 2011 and it resulted in a $15 fee from Sovereign but Most Damaging resulted in a 30 Day late mark on my credit report.

Update:  May 2012:
I had contacted the Comptroller of the Currency about the multiple $6.99 charges Citizens applied AFTER I was told by Two Citizens Reps I could NOT be charged any fees since my account was being closed by Citizens.    But Citizens refused to rev4erse the $57 in charges and defended their actions in their response to the Comptroller of the Currency (COC).    The COC sent me a final letter saying they could not do anything about Citizens refusal to reserve these charges, BUT that I DID have a legitimate complaint against them I should pursue legally.  But for $57 there was no sense in spending anymore time on this.     In the end, I think this case says volumes about the questionable ethical practice of Citizens Bank.

UpDate 11-17-12:
I get a notice in the mail today that a class action suit for $137.5 Million settlement against RBS Citizens has been reached as a result of Citizens overdraft practice of "posting debits from highest to lowest".  Imagine that!!

However, I wonder if a lawsuit will also be field against Citizens for other unscrupulous overdraft schemes they use to bilk their customers with high overdraft fees?  For example, at some point a couple years before I left Citizens they changed their "Pending debits" to automatically trigger overdraft charges, BEFORE the debit actually posts.   Other banks do NOT penalized customers for PENDING changes. ONLY after the debit actually posts does it affect the account and potential overdraft if applicable.   NOT Citizens.   They now immediately trigger their overdraft machine with Pending charges, even though the account itself is not actually gone negative.   

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