This is unbelievable! Back in Oct. 06, my husband and I helped our 22 yr. old son with some bills and debt he got himself into thinking he was ready and mature enough to be out on his own. He acquired just over $300 in service fees from the bank for bad checks. Bank closed his acct. Each payday I took him to this bank and little by little he pd off the fees. I know this because I myself took him there EACH time, and saw the bank receipt each time he pd. The last pmt on the acct was on 11-01-06 in the amt. of $33.11 He came out with a bank rect. that said service charge paid. It was computer generated. Now, about 3 wks ago, my son tried to open a ck acct and was denied. We ordered a copy of his credit report and found that the bank sent him to the credit bureau on 11-08 and they in turn reported him to all 3 credit agencies for non pmt of the entire $300! When I contacted the bank, they finally found the $33 pmt after hunting for 15 minutes. It was put on their general ledger because they didn't know where to put the pmt since his acct was closed. Thus, here 5 months had gone by and we didn't even know there was a problem. They could not find where any of the other pmt were made. Of coarse, the only receipt that I had was the last one which said-service charge paid. I even went to the main branch and explained the situation to the manager. She said there was literally 100's of ledgers in which these pmts. could have been put, but yet there were ways to track it down. After much looking, the bank has not been able to locate any other pmts made. I also spoke with the credit bureau, who now wants their money now. Their stand is that since he can't come up with any receipts to prove that pmts were made, then he owes the balance. I can see their point, but my arguement is that the bank already "lost, or misplaced" the $33 pmt. and never would have applied it to the original debt had I not discovered this problem in the first place, so it stands to reason that the other pmts most likely were also put somewhere in "bank outerspace!" I [b]know as I know[b]that[b] he [b] paid this debt because I personally drove him there each and evey time. But, no receipts, other than the last one. Also, what are the laws in regard to a bank sending you to the credit bureau when a pmt had been made just 7 days earlier? It's obvious that this bank has some problems with their record keeping. So, is his only option to pay this debt all over again in order to get it off his credit record? And, since the 30 limit has passed, do they have to provide him with validation of debt upon request? Thanks for any info you can offer. Terry

gogosean

Hi, I have experience in the financial services industry and I am somewhat amazed that in this day and age, they can not apply paymets to closed accounts. If you have a credit card and closed your account , they would know where to send your money. This excuse of theirs sounds awfully fishy to me since it is CLEARLY against regulations.

Banks are so tightly regulated, that deposits on their ledger with no known source are literally against the law. You can thank anti money laundering legislation and regulations for that one.

For the payments they will admit to:
The bank MUST provide the credit reporting agencies a notice of their error. You are entitled to get a copy of this letter in writing.

For the payments they wil not admit to:
Take your letter and make a complaint to the Better Business Bureau. See if you can find similar complaints and write a letter to the CEO and demand a reply within seven business days with your complaints , your findings from the BBB , and your observation that deposits from unknown sources, of any size, are in violation of Anti Money Laundering legislation. It sounds lofty, but there are people who do nothing all day but read complaints to the CEO of banks. Rest assured, anti money laundering fines are much more than a puny $300 debt. Check it out on Wikipedia. Send the letter registered mail.

Next time?
Maybe you could loan the money to your son in a lump sum and get one receipt for that single transaction.

lexiegam

Thank you so much! I never drempt anything like this would ever happen. The reason for not loaning the money was because we were trying to teach our 22 (!) yr. old son responsibility and accountability-and we are not much for 'helping' him take the easy way out. But, I certainly see your point, as it certainly was not worth this mess! We will do just what you advised. Thanks!

lexiegam

GOGOSEAN-
Question- The receipt that this bank gave my son was a regular, typical deposit ticket. It had a different acct. # on it because as I said, his checking acct had already been closed. I think the acct # on the deposit ticket was that from the general ledger. I have a copy of the CREDIT GENERAL LEDGER DESCRIPT. from the bank in which they put his name, address, date, service charge, amt. paid, acct. #, andl ledger acct. #, also the employees name-all hand written. This was not given to my son, but given to us during this investigation. Now, is this still what you consider "no known source?" Thanks.
*It still was never applied to what he owed until just 2 weeks ago when I brought this problem to their attention!

ScottGem

First, I have one modification to Gogo's suggestion. Forget the BBB, most states have a Banking dept that regulates banks within the state. Any correspondence should be sent to them. You want two things to happen. First, for the bank to acknowledge the debt was paid, which includes getting the collection agency off your back (I'm assuming there is one since credit bureaus don't ask for money). The second is to remove the entries from the credit bureaus.

Now, for future reference, NEVER pay a debt with cash if you can avoid it. Even if you get a receipt its often not enough. You want to pay by check or Money Order. Something that is traceable.

lexiegam

yes, we are contacting the banking authority financial and insurance services for Michigan. And, yes there is a credit bureau that is on his back expecting the amount minus the now discovered $33.11 to be paid immediately! Of coarse, they should not have this debt to begin with!

gogosean

Okay,

Here is one last approach. Each bank, by regulations, has an anti money laundering czar. A big buzzword in banking is "know your customer".

The fact that they can not find numerous transactions and have simply blamed it on the "general ledger" is not only a lame excuse, but is also unacceptable to regulators as "knowing your customer".

What you want to do, without spending too much time, is to trigger an audit of this "magic account". When you send the letter to the anti money laundering person at the bank, copy the IRS and the someone you can find from the link. The feds don't like magic accounts at banks.

Focus on triggering the audit, while you should mention the trouble they put you through, you are just a concerned citizen who is trying to report suspicious behavior.

Contact FinCEN

Remember, focus on triggering the audit by describing this "magic account" where customer money can go without any record. If they tell you that only transactions above a certain dollar ammount require reporting, simply respond that this kind of acoounting practice can be used as a form of "placement" in the phases of money laundering. Do your best to trigger the audit. They will likely not come to your defense directly, which is why an audit really is the last stand.

If you do help your son again, even though you are trying to teach him a lesson, a loan will help his credit repair more quickly and it will reduce the need to write out checks every month. Even after you work out a plan with creditors, they can get pretty mean spirited. Don't forget your copy of the letter your bank sent to Equifax, or whoever.

Good Luck!!!

P.S. As ScottGem alluded, make a clear distinction between your interactions with Credit Reporting agencies and Collections.

lexiegam

You all have been SO HELPFUL! and I appreciate it. Thanks so much. Terry