Very upset with PenFed

[REWahoo]

Quote:

Originally Posted by Rustward 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/foru...oes-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]

Quote:

Originally Posted by Curly 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.

[jazz4cash]

I sure hope this works out in the end for you. I guess we should all double check the contact info on our accounts. I think PenFed should take a good look at thier procedures and make some changes. I had something similar happen to me at another credit union, so I don't think it is strictly a PenFed problem....more a lack of common sense on the part of the financial institutions...and poor business practice to push a large depositor out the door!

[Rustward]

Quote:

Originally Posted by Curly 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 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.

Surfdaddy will be along to provide details. It sounds like what happened is because his share account became inactive, he lost his membership in the CU, and therefore is no longer eligible to hold any accounts there. Not having accounts, the CU had to send the money somewhere, and chose the VA Unclaimed Money Fund -- probably standard procedure. Still doesn't excuse not trying contact by phone or email but I doubt if they are required to do that. You used the word "forfeiture". I don't think he forfeited anything, but it will take some action and time to get his money back.

At the very bottom of the list, Bad Address/Inactive Accounts $15/quarter.
https://www.penfed.org/pdf/serviceFees.pdf.

I use a different credit union. The day I joined in the 1980's I funded my share account and have not touched it since. Either my CU just doesn't care about inactivity of the share account, or they consider other account activity as qualifying. Just for fun, I checked my CU's fee schedule and they charge $5.00 for each piece of undeliverable mail and $5.00 per month when a share account is 6 months inactive and below $25.

Edit to add: It'll be interesting to see if PenFed charged Surfdaddy an early withdrawal penalty or those Bad Address/Inactive Account fees. They might not have.

[Curly]

A quick review of PenFed's membership agreement is at:

https://www.penfed.org/aboutUs/priva...asp?adcode=401

The following is Sections B&C of the Membership Disclosure referenced above. (I added emphasis - why didn't they try to locate SurfDaddy?):

B. BYLAW PROVISIONS. The par value of a share is $5.00. If my account has a balance of less than $5.00 and is not increased within six (6) months, my account will be absorbed by a late charge. If my account becomes dormant, the account is reportable and funds are remitted pursuant to state unclaimed property laws. If I am delinquent on any loan, I may not withdraw any shares below the amount of my loan balance
C. CURRENT ADDRESS. I agree to keep you informed of any change in my postal mailing address. I understand that if I fail to do so you may charge my account a locator fee paid to obtain a current mailing address. I understand that my account shall be subject to a quarterly fee should there be no activity on my account for one year in addition to having a bad address. In addition, if I sign up for e-statements, I agree to keep you informed of any change in my e-mail address so that I continue to receive notification that my statement is available for viewing online.


If the account holder doesn't know that the postal address is wrong, I would think there is no duty to advise PenFed of the error.

The implication of the last sentence is that an email address is adequate for notification. Did he pay a quarterly fee for no activity? If he paid a late fee, was that fee shown in the online statements that he says he got.


Further, does accrual of interest on a CD constitute "activity" on an account, or does the account need to have "activity" in it's Share Account cash value to demonstrate "activity"? To avoid this problem is it then prudent to advise PenFed by certified mail, with a required reply confirmation, that they have the correct address for the account - and that there is "activity" on the account, and that it won't become dormant unless you are notified by postal mail, email and telephone.

[jazz4cash]

Quote:

Originally Posted by Rustward At the very bottom of the list, Bad Address/Inactive Accounts $15/quarter. https://www.penfed.org/pdf/serviceFees.pdf.

I would think this fee would get the attention of the member and cause them to take action. That's what happened to me at another credit union. Also, shouldn't it take several quarters of inactivity before the account is considered abandoned?

[NW-Bound]

Same as the OP, I had a Money Market account that I opened on the Internet (not with PenFed but a bank), and logged in every month to make sure that the monthly interest had been properly posted.

As this was my emergency cash, I did not add to the account, nor withdraw from it. One day, I received a notice that I had to reply to, in order for them to not flag my account as inactive and to turn it over to the state.

My ass! Same as the OP's situation, didn't they have a computer record of my logging in periodically over the Internet?

So, if an account activity was what they needed, I gave them one. I withdrew my money!

[Nords]

Quote:

Originally Posted by Rustward 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. 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 wonder which is more expensive--
- snail-mailing statements, or
- posting a note on the account for the next login, or
- sending an e-mail, or
- OFGS pick up the phone.

I'm puzzled how they got the address wrong. Whenever I've signed up for a CD online, even if it's a renewal, PenFed has followed up with a snail-mailed contract for me to sign & return. They had two chances to get it wrong or right. Did they do the same for you?

NFCU has no trouble e-mailing me scads of spam important notifications of member specials and timely announcements...

[NW-Bound]

Quote:

What happened to your account is probably 100% automated and it is unlikely a human decision maker or even a monitor was ever involved...

Or the "human" is just too stupid or most likely does not care...

I just read this story in Time, Nov 29, 2010. A reporter looked into a typical case of home foreclosure where the bank "lost" the promissory note and could not foreclose for more than two years. The reporter called around, and was able to find the warehouse where that note was stored. It took him all of 4 hours, being an outsider.

The bank's agent did not even know where to call! And this is about THEIR money, not someone else's!

No wonder our country is in such deep doo doo. Fewer and fewer people know how to do their job anymore!

[Rustward]

Quote:

Originally Posted by Curly If the account holder doesn't know that the postal address is wrong, I would think there is no duty to advise PenFed of the error. The implication of the last sentence is that an email address is adequate for notification. Did he pay a quarterly fee for no activity? If he paid a late fee, was that fee shown in the online statements that he says he got. Further, does accrual of interest on a CD constitute "activity" on an account, or does the account need to have "activity" in it's Share Account cash value to demonstrate "activity"? To avoid this problem is it then prudent to advise PenFed by certified mail, with a required reply confirmation, that they have the correct address for the account - and that there is "activity" on the account, and that it won't become dormant unless you are notified by postal mail, email and telephone.

Thanks for posting the excerpt from the membership agreement. It all seems to be in there.

As for accrual of interest I once had an account at an S&L that accrued interest monthly, and almost went dormant, several times. So there, accrual of interest was not considered activity. They send you a form, you sign the form and mail it back and the account gets another lease on "being active". But if you never receive the form -- that could be problematic.

[Rustward]

Quote:

Originally Posted by NW-Bound Or the "human" is just too stupid or most likely does not care...

Maybe, maybe not. They can't do the volume of business they do with a lot of human interaction.

[haha]

I think their organization is a little loose, at least compared to any other financial institution that I have ever dealt with. I avoid them unless what they are offering is quite a bit better than I can find at other places that I like better.

Ha

[NW-Bound]

The computer takes care of the 99.99% of the cases. There should be some "humans" to take care of the 0.01% that is out of the ordinary.

[Curly]

So, I'm kinda curious about the issue someone posted earlier - did PenFed invoke an early withdrawal penalty when they sent the "dormant" account to Virginia? If so, that sucks. But wait! On second thought, if they didn't charge for early withdrawal, that might be a nifty way to break a CD. But, of course, the hassle and risk of recovery makes this "Dormant Withdrawal Strategy" aka "DWSa") fairly problematic. It would also seem to me that if SurfDaddy can prove that PenFed was negligent, that he could seek to recover all the interest he was due in the CD (without redepositing the funds), plus a penalty for his aggravation. Depending on the amount of lost interest, that might make an entertaining small claims court suit.

[aldo]

Quote:

Originally Posted by haha I think their organization is a little loose, at least compared to any other financial institution that I have ever dealt with. I avoid them unless what they are offering is quite a bit better than I can find at other places that I like better. Ha

So do I. Shortly after I opened a CD with PenFed 2 years ago, I was checking my account online and noticed that the beneficiary of my CD was a complete stranger. I resolved matters with PenFed but have been leery since

[SkisALot]

This incident if appalling. PenFed should reimburse your money with interest immediately. I was going to get another CD with PenFed, but now I'm not.

[NW-Bound]

Quote:

Originally Posted by aldo ...I was checking my account online and noticed that the beneficiary of my CD was a complete stranger...

This reminded me of a similar thing that happened to me a few years ago. This was with a large brokerage house, with whom I still have several accounts and have been happy with otherwise.

One day, I logged into my accounts to check my stocks. As all my accounts were linked together, on one screen I could see the balances of my IRA, my Roth, my after-tax account, my children's Coverdells. But what the heck was this account with some name that I never heard of? So, of course, I had to click there to open it up to "inspect". My, it was some woman's IRA account, over which I had full authority to buy and sell. How did that happen?

I was going to call the brokerage house the next day to ask, but was busy and forgot all about it until the next night, when I tried to log in. What do you know? I could no longer log in.

Now, this of course got me more concerned than being given authority over a stranger's account!

So, I called their service desk the next day. The operator couldn't explain how that happened, but said he would reset my password. OK! So, I was able to log in again, but there was that woman's IRA account again. The operator looked on their computer, and said that was because I was given "custodian authority" over it. Of course, I said I did not know anything about it, and did not want it. He said he would look into it.

The 3rd night, I tried to log in. No can do! My password failed again! This time, I got so upset I sent them an E-mail, explaining what happened and said that if this did not get resolved soon, I was going to transfer out all of my accounts, and would let the media know that perhaps somehow their computer system had been compromised.

This escalated the problem up to an "Account Recovery Specialist", who contacted me and explained the problem, and guaranteed that the problem had been fixed for real this time.

What transpired was that there was another man with a name similar to mine, who filed a form to get power of attorney for his wife's account. Somehow, some stupid clerks granted that right to me. And when the husband found out that he did not get access to the account, he called them, and they changed my account's password for him. And then, I called and regained control. Back and forth a couple of times, until this specialist pinpointed the problem.

Since things appeared to be fixed, I calmed down and went on my business. But it did not end there!

A few months later, I wanted to transfer some money to fund my IRA for the year, and as I was over 50, my contribution limit was higher than that for kiddos. But, but, but, their Web site would not let me.

So, I sent an E-mail to their service desk, saying that their software appeared to be out-of-date, hence did not recognize the higher limit for people of my age, due to a recent law.

The reply that I received said that their software was not at fault, and that the reason for denial was that I was not of the right age. He added that if I was really older than the age I first claimed when opening the account, I had to supply a copy of my birth certificate to prove it.

I then remembered about the identity mix-up earlier. Obviously, the other man was younger than me. And apparently, they did not correct all of my records.

So, I went ballistic again, and sent them another angry letter. I attached all the previous E-mail correspondence, and told them that my birthdate had not been changed ever since I was born, and they better fixed it for real this time.

Of course, they got apologetic again, and things seemed fine now, but who the hell really knows?

It takes a computer to really foul things up. No, it takes an idiotic fast-fingering data entry clerk to really, really foul things up. Sigh...