A chapter of the horror story of zombie checking accounts is closing at one of America's biggest banks.
Zombie accounts reopen without a consumer's knowledge due to direct deposits and automatic withdrawals. While some account holders have been haunted by them, Bank of America has announced a policy change that will keep those accounts closed for good. Beginning this week, if you close your BofA account, you will no longer need to worry about an errant electronic transaction reopening your account.
Plenty of customers have been parting ways with their banks throughout the past year. As fees have continued to rise, many account holders have been looking for free-checking refuge at credit unions and community banks. However, my colleagues and I have written about the potential challenges of switching banks. Closing a bank account can be inconvenient and costly.
BofA's announcement is certainly good news for forgetful and frustrated customers. Still, regardless of a bank's policy for reopening closed accounts, it's important to remember that it is your responsibility to ensure your payments are programmed correctly. If you carelessly close your account, you may wind up failing to pay your bills on time, and late payments can damage your credit score.
Chances are, your bank will remind you of this importance as you're withdrawing your money. I traded notes with Betty Riess, a spokeswoman for Bank of America, who says that the bank reminds customers to allow time for any outstanding payments to process and to make changes to electronic payments and credits before officially closing their accounts.
Have you encountered any challenges in closing your accounts and switching banks? Do you know other members of the banking industry that reopen zombie accounts?