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Bank takeover horror stories

By Marcie Geffner · Bankrate.com
Wednesday, August 25, 2010
Posted: 2 pm ET

Bank mergers and acquisitions present customers with a dilemma of whether to stay or flee the new bank that gets possession of their accounts. Customers are smart to do some research into the new bank's fees, services, rates and policies before they decide whether to accept the new status quo or switch to another bank as Chris Morris reports in "Your bank's been acquired: Should you stay?" on Bankrate.com.

For many customers, as Morris notes, apathy may be the response. After all, it's a hassle to research a bank and make a switch, especially if you have multiple direct deposits and withdrawals or have personalized your online banking. (Banks are, of course, wise to the high switching costs of these particular services.)

But whether you decide to stay with the new bank or make a switch, you should be exceptionally diligent about monitoring your accounts during the transition from Bank A to Bank B.

I speak from experience, though my last encounter with an acquisition-driven bank switcheroo happened more than a decade ago. In that case, one of my accounts was transferred not once, but twice in less than a year as Bank A was bought by Bank B, which was then acquired by Bank C.

Bank B relocated my safe deposit box from one of Bank A's bank branches to one of its own branches. I was notified of this relocation by U.S. mail, but only after I'd stopped by Bank A and discovered it was closed and my supposedly safe-guarded documents were not there.

Bank C double-deposited a month's worth of paychecks, an error in my favor. Notified of their mistake, they offered to help me balance my checking account -- for a fee. I declined, and amazingly enough, they never reversed the error. (Free money!)

Although these goof-ups occurred a long time ago, they were traumatic at the time and quite memorable. And they serve well to illustrate the kinds of problems that can happen.

If your bank account was moved from Bank A to Bank B and perhaps then to Bank C, was the transition smooth or do you have a cautionary tale to share?

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2 Comments
Marcie Geffner
September 07, 2010 at 9:55 pm

Oh my, that's a horrible situation and a wonderful story of what can go wrong. And "we have to go by what the computer says" is never a good excuse because someone had to program the computer, right? And that person clearly goofed in this case. Thanks for sharing, Kit.

Kit
August 27, 2010 at 4:39 pm

Here's a tale. I worked at Bank A that was bought by Bank B in 2006. One day, a loan customer came in with his monthly billing statement. Instead of his usual loan payment of $500 or so, the monthly billing was for about $8,000! After looking at the bank's computers, we realized that when Bank B converted the loan info from Bank A - they made a huge, huge error and we spotted the error right away. I immediately called the Bank B loan department (located in another state and time zone) and pointed out the error. The response I got was "Well, we have to go by what the computer says". I explained exactly what the error was, how it was impossible to have that loan payment based on the amortization, and that I had the loan documents which called for $500 monthly payments. They then said, "Well, I see that the customer banks at our branch at XXX so they would have to go in to that particular branch and talk to someone there if they have a problem..." I said "I am calling you from branch XXX!" And they continued to say, "Well, we can only go by what is on the computer...." I found another job and quit shortly thereafter.