Very upset with PenFed

[Surfdaddy]

So I had opened a 3 year CD with PenFed almost 4 years ago. It matured and rolled over to a new 3 year CD this past January. I periodically had gone online to check my balances during this time. I even signed up for and received email updates that interest was posting to my account -- the most recent email in August.

I went online today to check my balance again and when I tried to log in it said that I had no active accounts!

I called PenFed, and to make a long story short, they had a bad address for me (wrong city, perhaps zip was incorrect?), and had been sending notices that my primary share account was inactive (since I had not been using it). On October 15 they closed the share and CD accounts and sent my funds (over $60K) to the state of Virginia Treasurer as unclaimed funds! They claimed that this is the law regarding dormant accounts and how they handle funds.

So now I have to go to the Virginia Treasurer website and try to submit a claim and wait 8-10 weeks while they "try" to find my funds!

I am upset -- partly because this is a very large sum of money - but moreso because of how PenFed handled it. It's not the address error - it's the fact that they had my email and phone number. I never received any notice online or in email; there was no indication of any problems on their web site in regards to the dormant account. To all online viewing everything was just fine - but apparently via land mail they were sending letters that I of course could not receive, given the bad land address.

So I have sent an email to the Chairman of the Board (on their web site) about the situation and the fairly simple steps they could take to improve their customer service. I'm sure I'm not the only bad address they've ever had.

I'm NOT happy.

 

[dgoldenz]

Ouch, I'd be pissed too...

 

[73ss454]

OMG, what's up with them? That's about the stupidest thing I've ever heard.

I need to call them and go over my name and address. Do they really think that someone would just forget about 60K?

 

[ERD50]

Does not sound good.

Did you ever get snail-mail to your correct address? If so, this is a triple concern. Anytime an address change goes through, you should be alerted via your email addresses. Otherwise, a scammer could intercept your snail-mail, send a change of address notice in, and then bad things could happen. Like, 'send a check to the address of record'.

Please get as much info as you can, post it here, and let them know about the post. Lots of good PenFed customers here who might be very 'interested'.

-ERD50

 

[REWahoo]

Yikes!

It does seem reasonable they should have taken further steps to attempt contact you, especially given the amount of money in your account. How the heck did they have a "bad address" anyhow?

I assume from your post you were signed up for monthly e-statements, not paper/snail-mail, which should have tipped you off to a problem once they stopped showing up. If so, here is another example of why I am very reluctant to "go green" and save a few trees. Too many holes in the e-communication line for my comfort.

 

[Surfdaddy]

I had never received any paper statements. With me in CA and them in VA it just seemed to make sense. I received emails whenever interest posted, and I could go online and see my accounts.

They apparently had my correct street address but the wrong city. So I don't know whether I made the mistake in filling out the initial paperwork, or if they keyed it in wrong. I don't have a copy of what I sent them.

I called the VA treasurer and they are already of course out of office until next Monday. I guess they get Wed (today) off?!

 

[martyb]

Damn. I was thinking I might open an account with them...now...probably still will but you can believe I'll mention this. Thanks for the warning, and I hope you quickly get your money back.

 

[REWahoo]

S
So I have sent an email to the Chairman of the Board (on their web site) about the situation and the fairly simple steps they could take to improve their customer service. I'm sure I'm not the only bad address they've ever had.

If you do not get an immediate, satisfactory response, I'd follow up with a letter via Certified Mail to both the CU and the NCUA.

This is very troubling for any of us who do business with PenFed.

 

[REWahoo]

I had never received any paper statements. With me in CA and them in VA it just seemed to make sense.

This should have sent alarm bells ringing. I cannot recall any bank or CU that does not provide a monthly statement in some form.

However, it still doesn't excuse the fact they failed to try to contact you by phone or email when those statements were returned as 'undeliverable' - for four years!

 

[Surfdaddy]

This should have sent alarm bells ringing. I cannot recall any bank or CU that does not provide a monthly statement in some form.

However, it still doesn't excuse the fact they failed to try to contact you by phone or email when those statements were returned as 'undeliverable' - for four years!

I'm so used to getting my banking statements online from other institutions that the lack of mail didn't even ring a bell. And another credit union I had used for a long time didn't send anything monthly, either.

 

[FIREd]

Yikes!

I hope that Virginia returns unclaimed money faster than its neighbor to the south. I have had a claim pending with the North Carolina state treasurer for almost 8 weeks, and I haven't heard word one from them.

 

[FUEGO]

This should have sent alarm bells ringing. I cannot recall any bank or CU that does not provide a monthly statement in some form.

Apparently they do not produce statements for their mortgages. I have asked multiple times, and asked them if this is a common question, and they have told me that it is.

I get e-statements or emails for online notification for my other accounts there.

Not that I would mind much if they sent my mortgage and HELOC debt to VA Treasurer's office as unclaimed.

 

[Ronnieboy]

Don't they have some kind of tracking to see how often you log into your account online? One of my CU's show a line up at the top "last logged in on Nov 1, 2010 2:14pm". You would think that they could see a history of you logging into the account, so hey, we should send an email to Mr. Surfdaddy about his about to be inactive account he keeps logging into.... I would be p.o.'d too

 

[Surfdaddy]

Don't they have some kind of tracking to see how often you log into your account online? One of my CU's show a line up at the top "last logged in on Nov 1, 2010 2:14pm". You would think that they could see a history of you logging into the account, so hey, we should send an email to Mr. Surfdaddy about his about to be inactive account he keeps logging into.... I would be p.o.'d too

Apparently they don't do that.

 

[SunsetSail]

You clearly have a right to be upset from a horrible customer service standpoint, but I also think you have a valid complaint that they did not follow proper escheat compliance. They are required to make a good faith effort to find you - this is generally considered to include not just a physical mailing address. In addition, online activity should be considered payee generated activity which would prevent the tolling of the dormancy period for the unclaimed property. Throughout the 90s this became a huge source of revenue for the states because even though they hold the funds in trust, most use them as part of their general funds and pay claims out of future general funds. Companies just turn over everything to avoid liability. Unfortunately you probably have no recourse because you will get your money back from the state eventually.

 

[Dawg52]

That is unbelievable. Can't believe they didn't try calling you. I do business with them and it is concerning that they don't have their ducks in a row any better than that.

 

[Rustward]

Surf, sorry to hear of this and the inconvenience it is causing you.

This may not be a popular read: Not defending PenFed, but try to see this from their point of view. Their website says there are 992,369 members with assets of over $15 billion -- there might be two or three million accounts or more. What happened to your account is probably 100% automated and it is unlikely a human decision maker or even a monitor was ever involved. It is easy imagine PenFen say something like "Gee, this one is over $50K so maybe we should try to call him or something." They mailed the notices and got no response. I seriously doubt that PenFed has a pool of people that can call customers whose accounts are on the brink of dormancy. If they did it would increase their expenses or lower the rates they can offer. I don't want to speculate how many accounts might go dormant every month, but there is probably a steady stream or them, given the number of accounts. They should have tried to make phone or email contact, though, as those can be fully automated these days.

Personally I still take paper statements on everything. When one is missing I call and resolve why it is missing. I do use electronic bill pay and automated credit card payments, but for the important ones I verify that the payments actually got made, with whomever was supposed to get paid, not merely looking to see that the money left my checking account -- i.e. call the insurance agency to see if my ebill pay went against my account.

I would suggest you ask PenFed if the snail-mail statements and notices were being returned to sender, and if so, they take a more appropriate action before closing accounts. Again, I would bet that a lot of pieces of mail get returned to them every month. You might be able to make a suggestion that improves their process for the other 992,368 other members.

 

[Surfdaddy]

I appreciate everybody's comments and sympathies. I'll call Virginia on Monday. I suspect it is going to take a couple of months to get my money. I'll keep you all updated. Let me know if you think of anything else.

 

[Surfdaddy]

Surf, sorry to hear of this and the inconvenience it is causing you.

This may not be a popular read: Not defending PenFed, but try to see this from their point of view. Their website says there are 992,369 members with assets of over $15 billion -- there might be two or three million accounts or more. What happened to your account is probably 100% automated and it is unlikely a human decision maker or even a monitor was ever involved. It is easy imagine PenFen say something like "Gee, this one is over $50K so maybe we should try to call him or something." They mailed the notices and got no response. I seriously doubt that PenFed has a pool of people that can call customers whose accounts are on the brink of dormancy. If they did it would increase their expenses or lower the rates they can offer. I don't want to speculate how many accounts might go dormant every month, but there is probably a steady stream or them, given the number of accounts. They should have tried to make phone or email contact, though, as those can be fully automated these days.

Personally I still take paper statements on everything. When one is missing I call and resolve why it is missing. I do use electronic bill pay and automated credit card payments, but for the important ones I verify that the payments actually got made, with whomever was supposed to get paid, not merely looking to see that the money left my checking account -- i.e. call the insurance agency to see if my ebill pay went against my account.

I would suggest you ask PenFed if the snail-mail statements and notices were being returned to sender, and if so, they take a more appropriate action before closing accounts. Again, I would bet that a lot of pieces of mail get returned to them every month. You might be able to make a suggestion that improves their process for the other 992,368 other members.

Rustward, I did mention in my email to their Chairman that they should revise their procedures. Certainly if they are getting a bad address return (as their CS rep told me), you would think they could also automate an email saying that "we hare having trouble contacting you by ground mail, please call us...."

 

[Stevewc]

I just opened a new account and a new CD.
I happen to notice yesterday that they had taken my address wrong over the phone. Luckily I was getting the snail mail because there was only one word missing in the addy. I have received 2 letters from them and expect at least a couple more just getting the cd and cc card going. Everyone is advised to check the addy, names & ss numbers closely. Especially since this thread is pointing problems out.
Glad I caught their mistake early in my case.
Steve
PS. You should and will be getting snail mail from them when setting up a new account. For signatures and such. Look it over closely.

 

[REWahoo]

I would suggest you ask PenFed if the snail-mail statements and notices were being returned to sender, and if so, they take a more appropriate action before closing accounts. Again, I would bet that a lot of pieces of mail get returned to them every month. You might be able to make a suggestion that improves their process for the other 992,368 other members.

I see a 'failure to take responsibility' issue here. Perhaps PenFed will "man-up" in response to Surfdaddy's complaint, but for now...

I worked at a corporation with a similar base of customers and mistakes of this magnitude would have resulted in serious consequences for those responsible. The fact there are a million members at Penfed is no excuse for failing to have a system in place to handle returned notices - I would suggest it is precisely the opposite.

And when you consider the returned statements likely showed up every month for a period of four years, they don't just have a 'bad process', they are guilty of gross negligence.

I'm happy I have no money on deposit at Penfed, only a CC - and that has been far from trouble free: http://www.early-retirement.org/forums/f28/penfed-credit-card-woes-52448.html

 

[chinaco]

This sort of thing happens. I have read about it.

I do not rely on confirmation of transactions between me and my financial service providers using electronic means. I want the paper sent to me on any meaningful event or transaction.

Email is good, logging into the website to check things out is good, doing transactions on line is great... but I still want the paper statements and confirmation of the activity.

If I ever have to prove it... I can produce it!

 

[Curly]

SURFDADDY: After reviewing this thread I'm concerned about PenFed's definition of "an inactive" account - and how that definition applies to CD's that have maturity dates longer than 4 years (by definition I don't "do anything" to a CD until it matures, other than monthly monitor the account balance). Does my failure to reply to a written document from PenFed constitute "an inactive" account and thus open my acdount to forfeiture of my funds? I am going to call PenFed and find out just what the heck is going on - and find the written documentation that applies to this issue. I want to see EXACTLY what their Disclosure Agreement says about notifications and inactive accounts.

 

[Contrarian]

Well that does it for me. As my CDs mature I am moving it out. Thanks for the heads up. That truly is unbelieveable!

 

[Surfdaddy]

SURFDADDY: If you don't mind, could you tell us how your $60k was held by PenFed, i.e. cash or CD's? After reviewing this thread I'm concerned about PenFed's definition of "an inactive" account - and how that definition applies to CD's that have maturity dates longer than 4 years (by definition I don't "do anything" to a CD until it matures, other than monthly monitor the account balance). Does my failure to reply to a written document from PenFed constitute "an inactive" account and thus open my acdount to forfeiture of my funds? I am going to call PenFed and find out just what the heck is going on - and find the written documentation that applies to this issue. I want to see EXACTLY what their Disclosure Agreement says about notifications and inactive accounts.

I had a minimum amount of money in a share account.
I also had the big money in a 3 year CD opened January 2007, matured January 2010, and rolled over to a new 3 year CD maturing January 2013 (automatic rollover).
I had been getting quarterly emails as to interest posting on the CD, most recently in August 2010.
I'm thinking of asking them for a copy of the application that I sent them (if they have it). I'd like to know where the error was made.

They definitely have my email, they know I've logged on multiple times in the last 3 years, and they also have my phone number.