Very upset with PenFed

[Dawg52]

Thanks for sharing your experience and the followup. I am VERY relieved with the response from Penfed, although I am sure some would feel they could/should do more.

I think we all got a wake up call to double check our contact info.

Same here. Glad things have worked our OK for you. And I double checked my info on all accounts, not just PF.

 

[Surfdaddy]

All right! We all like a good ending.

About the missing 1099-INT, does that mean you did not put that on your past tax returns? No worry though. It is most likely the IRS already knows about it, and will be contacting you soon to ask for the missing tax, plus the interest on it. It may take them 2 or 3 years, but they will get to it. Don't ask me how I know.

Yes, I also have many accounts, and one 1099 form got lost in the mail one year.

Well, uuuhm....

So I am still out the $140 or so for a missing month's interest, and then I will end up paying back taxes and a penalty. I assume the interest will be straightened out.

It is still annoying that this was their mistake and I am going to be penalized (re: the IRS) for it. But I guess I should have noticed that the statement was missing for the 1099.

 

[Bestwifeever]

So glad it was resolved so quickly, SD. What relief you must be feeling!

 

[Dave J]

Well, uuuhm....

So I am still out the $140 or so for a missing month's interest, and then I will end up paying back taxes and a penalty. I assume the interest will be straightened out.

It is still annoying that this was their mistake and I am going to be penalized (re: the IRS) for it. But I guess I should have noticed that the statement was missing for the 1099.

You would not be able to complain about the taxes,( you would owe them anyway) but you might ask them real nice to cover the penaltys and interest for you. It might happen.
I doubt they would be a large amount.

 

[NW-Bound]

Well, I dunno. It is the responsibility of the account holder to know that taxes are due. I don't know about PenFed, but nowadays, the 1099 form is usually available on the Web of most or all financial institutions for downloading, in case you lose the snail-mail copy.

In my case, I redeemed an I-bond one year, and as taxes on I-bond interests are deferred, the I-bond account is not something I usually have to worry about taxes at year ends.

I don't know if the Treasury did not send one to me, or if USPS lost it, or if I tossed it out with the junk mail. So, I completely forgot about that until I received the letter from the IRS 3 years later saying I owed them money. So, I sent that in, and that was it. As I recall, there was no penalty and only the interest on that tax amount for 3 years. As I held that I-bond for quite a few years, there was quite a bit of deferred interest income that was taxable, and I had to write a check for a couple of grands.

 

[kaneohe]

Surfdaddy,

I also am glad this situation had a relatively quick and painless conclusion for you. I would suggest however that this should not be the ending and that you should leverage your power now to request/demand(nicely) via a supervisor that PenFed send you a corrective action report detailing what went wrong and what they propose to fix the problem so that it does not happen in the future. Usually what happens is that they will "fix" the current problem and then either due to not caring, corporate culture, or the press of other crises carry on business as usual...........which usually means it will happen again, maybe even to you. On rare occasions though, you may actually find a willing and caring ally who will implement a more permanent fix and actually improve matters. All too rare, unfortunately, but it does happen.

You mentioned specifically that this should have not happened bc you still had a CD w/ them. There should be some specific discussion in their report of what happened and how to correct that. btw....your admission of some culpability in not recognizing the city error and 1099INT omission was quite refreshing and will help others.

 

[JohnDoe]

However, I'm curious about PenFed's treatment of your funds during a time when they thought you had an inactive account. What credit union bucket did they put the money in if it wasn't in your account and it wasn't sent to the State?

Probably a GL account in preparation of ACH transfer to the state.

I'm curious if they escheated other member accounts in the same situation. This seems like a major screw up on a yearly process.

 

[clifp]

My faith in PenFed is pretty much restored.