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Attack of the ‘zombie’ bank account

Some banks reopen accounts—and impose fees—even after they've been closed

Consumer Reports magazine: August 2012

Illustration: Christoph Hitz

The last thing you might expect after closing a bank account is for your bank to resurrect it without permission and start charging the pesky fees that may have led you to close the account in the first place. But a recent study by Consumers Union, the advocacy arm of Consumer Reports, found that two of the nation’s 10 largest retail banks, Bank of America and Chase, reserved the right to reopen a closed account if there was a subsequent deposit; and Bank of America might also reopen an account after an attempted withdrawal. Chase told us later that it no longer reopens closed accounts, but it had not amended its policy online as of June. And banks smaller than the top 10 might still resuscitate old accounts.

You typically won’t realize your account has risen from the dead until you get your first statement. By then, you may have incurred fees of up to hundreds of dollars, for failing to keep a minimum balance or bouncing checks, for example.

Bank of America spokeswoman Betty Riess said that if the bank doesn’t reopen the account, “a deposit that you want to be there could be rejected” and that the bank notifies customers about its policy when they close an account.

What you can do. Unfortunately, you can’t drive a stake through your old account’s heart. But you can ask a bank representative whether the bank would reopen your account under any circumstances. (Asking by phone or in person is a good idea: Our study found that websites for the 10 banks lacked clear, easy-to-find closing policies.) In addition, make sure there are no outstanding checks, automatic payments, or direct deposits that could bring your account back to life.

Consumers Union is calling on the federal Consumer Financial Protection Bureau and Congress to keep zombie accounts in the grave.