The Last Straw -or- Don't bank at Bank of America

I have not been, emotionally, a "Bank of America customer" for quite some time, though I've continued to bank with them. I was waiting for a convenient moment to change banks. That moment has found me. Get this:

If you've been reading this blog for awhile, you'll know that I have an "e-bill initiated payment" set up. This means that my billers send their invoices to my bank. I have requested that my bank automatically send these payment to arrive three days before the due date on the bill. Ideally, this requires no interference with me. In the real world, during "cash poor" months, I'll adjust the payment dates the bills are paid to correspond with my having money in the bank.

Let me recap: on the ebill online page, I have checked a radio button that states "Send my payment to arrive ____ days before the due date." I filled in the blank by choosing "3" from a drop down box. This means that my request is to "Send my payment to ARRIVE 3 DAYS BEFORE the due date" for the majority of my ebills.

This weekend, Bank of America (BOA) changed their policy in sending e-bill initiated payments. To show you how I got screwed, I'll show you BOA's statement, translate what it means, and compare a before and after scenario. Then I'll tell you what happened.

Here's how I was alerted to the change:

Bill Pay just got better.

You've helped make Bill Pay #1 among online banking service. As our way of saying thanks, we're making it even easier for you to use. With our simplified scheduling, just tell us when you want your payment delivered and we'll see that it gets there on time. Even better, funds can stay in your account longer - since your money remains in your account until the payee receives the payment. Select the Bill Pay & e-Bills tab to start enjoying these Bill Pay improvements today.

This isn't real clear, so let me break it down for you.

In the BEFORE world, you would schedule when you wanted bills to be sent. BOA would give you a rough estimate of how long it took for the payment to get there (e.g., 2 days) and you would choose when your money left the bank.

So, if I wanted my payment to reach my biller by Wednesday, March 1st, then I would have to send the payment on Monday, February 27th. The money would be withdrawn from my account on the 27th, but not credited to my bill until March 1st. I would also have until the 26th to alter the amount of the payment or the date that the payment would be sent out.

In the AFTER world, you schedule for the bill's arrival. So, if I want my payment to reach my biller by Wednesday, March 1st, then I would request for it to arrive on the 1st. The money would be withdrawn from my account on the 1st and it would be credited to my bill on the 1st. A few business days before the 1st, the ebill would be shown "in process." This means that the money hasn't left my account, but I am not able to adjust the amount or date of the transaction.

If I were given a choice, I'd pick the BEFORE world. It means that the money is being taken out of my account a few days earlier, but it is more intuitive given the way the world currently works. In the world of paper, you receive a bill and write a check. You mail the check reasonably early, so that the post office has sufficient delivery time. Billers understand that there are variances in post office delivery, so they generally grant 3-5 days grace before you are considered "late." Thus, if the BOA payment arrives in three days instead of two, my biller will likely mark the bill as being paid "on time."

And, recall, in an attempt to be responsible, I have my payments sent to arrive three days before the bill is due. Given the 3-5 days grace, I have 6-8 business days to fix any problems or arrange for alternate payment before my bill is past due. The AFTER world only has an impact if you are drawing income on the money used to pay your bill, such as a business that requires tight cash flow and liquidity. Unfortunately, having $300 in my savings account for an extra two or three days does not provide enough interest to make up for the inconvenience of having to transfer the money to checking on a specific day. Remember, you can only withdraw from a savings account six times a month.

My preferences aside, I still got screwed because Bank of America took this as an opportunity to send an unauthorized draft from my account. As I have stated, my online request to BOA was to have my payment "sent to arrive three days before the due date." My bill being due on March 1st, my directions to the bank meant that my money should arrive on February 24th.

In the BEFORE world, this means that my money would leave my account two days early, on February 21st, to arrive on the 24th. I could change this date and amount anytime up to February 20th.

In the AFTER world, my money should be drawn from my account and applied to my bill on the 24th. It would be "in process" starting around the 21st, but I should be able to edit the date and amount up to the time it is "in process."

In the REAL world, Bank of America sent my payment on the 18th to arrive on the 21st. This is because, according their records, my money left my account on the 21st. So, they sent my money so they could withdraw it from my account as they had done in the past. BUT, this is not what I authorized.

I did not check a button saying "take the money out of my account 6 business days early." My request was that BOA send my payment to arrive three days early. Thus, the payment they sent was not what I requested or authorized.

I can understand their reasoning. In the past, the money left my account 6 days early but, equally, I was able to alter the payment any time up to 6 days before the due date. Given the way BOA handled this bill, I had to change the date 9 or 10 days before the due date. I think that's before I received the bill. On the other hand, who cares? Paying the bill 6 days early or sending the money 9 days early was not what I authorized.

Pop quiz:

1) My original request/authorization was based on:
a. The date the payment was to be sent
b. The date the payment was to arrive

2) How many days earlier than the due date was the payment to arrive?
a. 6
b. 3
c. 9

And, of course, they can't do anything about it. Though they won't charge me late fees. Nice of them, hunh? If I had done the same, not only would I have had to reverse my charges, but I would have had to pay BOA a substantial additional amount.

Also, being Bank of America, you can rest assured that they won't fix matters with my mortgage company if they deny payment, or take care of my credit card companies when my rates are jacked up because I have a delinquent account. In my experience, BOA takes care of what they do, but they won't take care of the consequences of what they do.

So, I'm fixing their mistake myself. One of the ways I'm fixing it is by changing my banking establishment.

Seriously, it's about time.

Pop Quiz Answers:
1) b
2) b