topic Re: What to do to reverse the damage in Credit Cards

What to do to reverse the damage

bluest — Fri, 11 Oct 2013 23:10:49 GMT

So I had a Bank of America credit card for over 2 years, which I closed last May. 3 weeks after this, they still accepted a payment which was on autopayment but failed to notify me. How I realized that I have a balance was my credit score dropped from 740s to 620 in a single day !! Now I've been dealing with them for a month to resolve this issue but finally they said it wasn't bank's fault and they can't do anything. I also tried to contact the merchant to refund the payment and charge me again but they won't do that either.

I know closing a card affects your score but I assume it wouldn't affect this bad so I think main problem is the 4 month late payment ( which was for $50 + $12 late fees).

I would really really appreciate anyone who can explain me what I did wrong and any advices on what to do to reverse the damage. Thanks!

Re: What to do to reverse the damage

Anonymous — Fri, 11 Oct 2013 23:17:26 GMT

I would keep calling BofA over and over and over. In my experience their customer service is awful, and they are an awful company to deal with. I had a similar problem to yourself a few years ago. It took forever but I finally wore them down and they did the right thing. Don't take no for an answer.

Re: What to do to reverse the damage

red259 — Fri, 11 Oct 2013 23:19:40 GMT

@bluest wrote:
So I had a Bank of America credit card for over 2 years, which I closed last May. 3 weeks after this, they still accepted a payment which was on autopayment but failed to notify me. How I realized that I have a balance was my credit score dropped from 740s to 620 in a single day !! Now I've been dealing with them for a month to resolve this issue but finally they said it wasn't bank's fault and they can't do anything. I also tried to contact the merchant to refund the payment and charge me again but they won't do that either.

I know closing a card affects your score but I assume it wouldn't affect this bad so I think main problem is the 4 month late payment ( which was for $50 + $12 late fees).

I would really really appreciate anyone who can explain me what I did wrong and any advices on what to do to reverse the damage. Thanks!

I think I understand what you are talking about. What you did wrong was not removing the credit card info from your auto payment. I'm sure lots of people have done the same thing. I haven't had this issue because normally credit card companies will just refuse the charge if the card was closed out. The only thing I can think of is maybe a goodwill letter to the credit card company? You could try disputing the late charge with the credit reporting agencies, but I don't kow that it will go anywhere. My issue isn't so much with them approving the charge as that is partially your fault (although they really shouldn't be approving anything on a closed card IMO). My concern is that they did not notify you of the charge. Did you have paperless billing? If not, then why wouldn't they send a new statement out?

Re: What to do to reverse the damage

bluest — Fri, 11 Oct 2013 23:28:13 GMT

Thanks for your message.

I've been actually calling them like twice a week for the past month and they finally said they will open a case and look into it but after that their attitude and answer was 100% the same.

The only way they say they can make a difference to remove the late payment history but they only do that if there is a bank error. I think it's their fault to accept that payment but they say it was a courtesy and it's not an error. So they won't remove the history and I don't know what else I can ask them to do..

Re: What to do to reverse the damage

youngandcreditwrthy — Fri, 11 Oct 2013 23:29:48 GMT

Dispute it with all the CRAs imo.
Now, others will chime in and holler fraud for my suggestion,
But it was an honest mistake.
Perhaps even file a complaint with the CFPB. They are very helpful and your situation will immediately become of utmost importance to BOA.

Re: What to do to reverse the damage

bluest — Fri, 11 Oct 2013 23:45:21 GMT

That was my assumption too, after all what does it even mean to "close" the account if it's still active and accepting payments?

I received statements in mail before but never relied on them since I always do everything online. And they closed my online account the day I closed the card. They said they sent those after the payment went through, which I'm not sure since they still send me promotional stuff and I don't remember receiving anything like a stament. Although I'm not 100% sure. I also pointed them out if I changed my address after that, I would never be notified since they haven't called me or sent an email, even though they had all my contact info.

Also I just don't understand how come a balance so small ($50) can affect my score so bad!

Re: What to do to reverse the damage

red259 — Sat, 12 Oct 2013 00:00:42 GMT

http://consumerist.com/2008/02/04/your-account-is-never-really-closed-at-bank-of-america/

Just so you know your not the only one. BoA is a horrible company and has been doing this for years. I refuse to deal with them. I have also seen this same thing happen with Amex.

Re: What to do to reverse the damage

Anonymous — Sat, 12 Oct 2013 00:08:22 GMT

@bluest wrote:
That was my assumption too, after all what does it even mean to "close" the account if it's still active and accepting payments?

I received statements in mail before but never relied on them since I always do everything online. And they closed my online account the day I closed the card. They said they sent those after the payment went through, which I'm not sure since they still send me promotional stuff and I don't remember receiving anything like a stament. Although I'm not 100% sure. I also pointed them out if I changed my address after that, I would never be notified since they haven't called me or sent an email, even though they had all my contact info.

Also I just don't understand how come a balance so small ($50) can affect my score so bad!

The mistake is kinda on your end here, since you did authorize those charges. However, the main purpose is to get this fixed, not to point fingers at whose fault it is.

There are clauses in T&C for credit and checking accounts that allow the bank to reopen the account whenever there is a new charge / credit going in there, which is what happened. This, in a way, helps to alleviate issues where people closed an account, but returned an item to a store that would only refund back onto the same card. However for you, it's harming you instead.

Before you do anything, pay off that $50 and any late fees right away, before it goes into collections. It's going to be much harder to fix once it get sold off to a collection agency.

Your best solution right now is to keep calling that merchant. If they are a local mom and pop store, you probably will have better luck since they're usually more negotiable. Offer to pay them the $50 first, and then have them credit that payment back onto your account. As long as they're willing to process the refund, it will be much easier explaining to BofA and having everything else corrected, since everything started from this charge.

If that doesn't work, call BofA and also send in goodwill letters. It will take some perseverance, but if you're lucky and happen to get the "right guy" who's willing to help, then your issues could be resolved. Just try to be really nice about it and hopefully the person on the other end will be willing to help too.

If both the merchant and BofA are unwilling to budge, then that's pretty much it. A honest mistake is still a mistake on your part. BofA simply reported the information accurately to the CRAs. You can't dispute a charge that you knowingly authorized. It might just result in more undesirable implications. So, just keep contacting the merchant and BofA until they're willing to budge. Worst case scenario you just have to let it age off on its own.

Re: What to do to reverse the damage

09Lexie — Sat, 12 Oct 2013 00:10:28 GMT

I agree with enharu. Filing a complaint with CFPB because OP made an honest mistake is not what that program is for.

Keep trying to get it resolved through the proper channels.

Re: What to do to reverse the damage

maiden_girl — Sat, 12 Oct 2013 00:14:37 GMT

I would keep calling BofA and fixing the issue with them. Try calling them with one of the backdoor numbers on the forum. Transactions for closed accounts should not have gone through. I guess the case is different with most banks.

Re: What to do to reverse the damage

Anonymous — Sat, 12 Oct 2013 00:18:19 GMT

Well I guess I'm a sucker for not reading the fine print (I have a BofA checking account), didn't know they would "re-open". Kind of seems silly, since I believe closed should mean closed.

This is one of the reasons its important to turn off e-statements before you close a checking/credit card; instead receive statements by mail, that way if the account gets charged for whatever reason at least you will find out quickly when an envelope bill arrives in your mailbox.

Re: What to do to reverse the damage

bluest — Sat, 12 Oct 2013 00:21:23 GMT

Yes, I did it right away after learning the issue and prevented it from getting into debt collection..

Merchant was ATT, their customer service is as bad as BoA if not worse, the guy tried to sell me a TV package for 20 min after telling him the situation and kept going even after telling that I don't have a TV I will give it another go on monday.

I really appreciate your comments and suggestions. It aligns with my current understanding. Do you have any idea how long would it take me to build my score to where it was again? It just doesn't seem fair to me to getting it decrease so bad for a debt so small This is definitely the last time I will ever close a credit card account.

Re: What to do to reverse the damage

Anonymous — Sat, 12 Oct 2013 00:29:33 GMT

@Anonymous wrote:
Well I guess I'm a sucker for not reading the fine print (I have a BofA checking account), didn't know they would "re-open". Kind of seems silly, since I believe closed should mean closed.

This is one of the reasons its important to turn off e-statements before you close a checking/credit card; instead receive statements by mail, that way if the account gets charged for whatever reason at least you will find out quickly when an envelope bill arrives in your mailbox.

You should have been able to access your online statements even after the account is closed.

A lot of people have similar problems like you pretty often. They close an account, only for the bank to reopen it due to residual interest charges, and they don't notice it until the deliquent balance is reported to the CRAs. In cases like this, you pretty much just have to "beg" with the bank till they budge.

When I was 18 Macy's sneaked in a $2 fee after I paid off my balance. I didn't notice it and they reported it as 1 30-day late, and they were unwilling to budge to have it removed. It's my fault, but I was hoping that they'd be nice about it since it's really just a couple bucks. No dice, and that late finally fell off my CRs this year. It does suck, but there's really nothing that can be done about it either other than to prevent such occurrences from happening again in the future.

Try talking to the merchant again. Offer to pre-pay them before they process the refund.

@bluest wrote:
Yes, I did it right away after learning the issue and prevented it from getting into debt collection..

Merchant was ATT, their customer service is as bad as BoA if not worse, the guy tried to sell me a TV package for 20 min after telling him the situation and kept going even after telling that I don't have a TV I will give it another go on monday.

I really appreciate your comments and suggestions. It aligns with my current understanding. Do you have any idea how long would it take me to build my score to where it was again? It just doesn't seem fair to me to getting it decrease so bad for a debt so small This is definitely the last time I will ever close a credit card account.

Try going into an AT&T store and see if those guys can call corporate and help you out. Otherwise try to contact someone in the upper management at AT&T. It's going to be a tad hard though since most large corporations are pretty inflexible about this, mostly because their CSRs do not have the authority to override the system.

Was it reported as a 30-day late? or what did BofA report it as?

Re: What to do to reverse the damage

Anonymous — Sat, 12 Oct 2013 00:57:12 GMT

@Anonymous wrote:
@Anonymous wrote:
Well I guess I'm a sucker for not reading the fine print (I have a BofA checking account), didn't know they would "re-open". Kind of seems silly, since I believe closed should mean closed.

This is one of the reasons its important to turn off e-statements before you close a checking/credit card; instead receive statements by mail, that way if the account gets charged for whatever reason at least you will find out quickly when an envelope bill arrives in your mailbox.
You should have been able to access your online statements even after the account is closed.
A lot of people have similar problems like you pretty often. They close an account, only for the bank to reopen it due to residual interest charges, and they don't notice it until the deliquent balance is reported to the CRAs. In cases like this, you pretty much just have to "beg" with the bank till they budge.

When I was 18 Macy's sneaked in a $2 fee after I paid off my balance. I didn't notice it and they reported it as 1 30-day late, and they were unwilling to budge to have it removed. It's my fault, but I was hoping that they'd be nice about it since it's really just a couple bucks. No dice, and that late finally fell off my CRs this year. It does suck, but there's really nothing that can be done about it either other than to prevent such occurrences from happening again in the future.

Try talking to the merchant again. Offer to pre-pay them before they process the refund.

I'm not the OP, and this never happened to me I'm just discussing that pre-closing a account, one may consider starting to receive paper statements in the mail as a "just in case". Though if you move, then that's another topic.

I knew someone with a Wells Fargo Buisiness account that re-opened after a fraudelant $1,200 charge went through. Bank of America has re-opened accounts after "earned interest", only to start charging a $5/10 or whatever so monthly maintenance fee. I personally don't agree with the big bully bank tacktics.

Re: What to do to reverse the damage

bluest — Sat, 12 Oct 2013 01:05:48 GMT

I believe it was reported as "not later than 2 months", at least that's what I see in the BoA alert here. Technicaly the missed payment was for june and I paid it after receiving august statement.

Thanks for your suggestion on ATT, I will do that!

Re: What to do to reverse the damage

parakleet — Sat, 12 Oct 2013 01:07:44 GMT

OP - I'm sorry that you're going through this but I don't know if "never closing an account again" is the lesson to take away from this situation. Good luck and keep us posted.

Re: What to do to reverse the damage

navigatethis12 — Sat, 12 Oct 2013 01:16:18 GMT

@youngandcreditwrthy wrote:
Dispute it with all the CRAs imo.
Now, others will chime in and holler fraud for my suggestion,
But it was an honest mistake.
Perhaps even file a complaint with the CFPB. They are very helpful and your situation will immediately become of utmost importance to BOA.

I wouldn't say fraud, but what would the reason for dispute be? They'll just ask Bank of America who will come back and say it's accurate. The Consumer Financial Protection Bureau isn't for this case, in my opinion. Every card I cancel says to stop recurring charges because if I don't they will come through, just like payments will come through to the accounts. Bank of America did nothing wrong here and I don't see why a complaint would change anything.

Re: What to do to reverse the damage

red259 — Sat, 12 Oct 2013 01:21:43 GMT

@navigatethis12 wrote:
@youngandcreditwrthy wrote:
Dispute it with all the CRAs imo.
Now, others will chime in and holler fraud for my suggestion,
But it was an honest mistake.
Perhaps even file a complaint with the CFPB. They are very helpful and your situation will immediately become of utmost importance to BOA.
I wouldn't say fraud, but what would the reason for dispute be? They'll just ask Bank of America who will come back and say it's accurate. The Consumer Financial Protection Bureau isn't for this case, in my opinion. Every card I cancel says to stop recurring charges because if I don't they will come through, just like payments will come through to the accounts. Bank of America did nothing wrong here and I don't see why a complaint would change anything.

I wouldn't say Bank of America did nothing wrong. Maybe nothing illegal, but lets not kid ourselves. Bank of America has this policy so they can jam people up and charge extra interest. They are counting on people to forget to remove all their automatic payments. If the bank wanted to do the right thing by their consumers they would refuse to honor transactions on closed out cards. Instead they take advantage of their customers who may not be savvy to this practice. So while they did not do something illegal, I would suggest that they are morally wrong for this type of business practice.

Re: What to do to reverse the damage

Anonymous — Sat, 12 Oct 2013 01:35:22 GMT

@red259 wrote:
@navigatethis12 wrote:
@youngandcreditwrthy wrote:
Dispute it with all the CRAs imo.
Now, others will chime in and holler fraud for my suggestion,
But it was an honest mistake.
Perhaps even file a complaint with the CFPB. They are very helpful and your situation will immediately become of utmost importance to BOA.
I wouldn't say fraud, but what would the reason for dispute be? They'll just ask Bank of America who will come back and say it's accurate. The Consumer Financial Protection Bureau isn't for this case, in my opinion. Every card I cancel says to stop recurring charges because if I don't they will come through, just like payments will come through to the accounts. Bank of America did nothing wrong here and I don't see why a complaint would change anything.
I wouldn't say Bank of America did nothing wrong. Maybe nothing illegal, but lets not kid ourselves. Bank of America has this policy so they can jam people up and charge extra interest. They are counting on people to forget to remove all their automatic payments. If the bank wanted to do the right thing by their consumers they would refuse to honor transactions on closed out cards. Instead they take advantage of their customers who may not be savvy to this practice. So while they did not do something illegal, I would suggest that they are morally wrong for this type of business practice.

They do tell you to stop / change reccuring charges........ If a customer refuses to listen, there's nothing they can do about it either.

The way some recurring payments work is that they're already pre-authorized, so a charge will still be able to go through. New charges on the other hand will not go through, because those charges cannot get past authorization stage.

This policy is a double edged sword. Now imagine you bought a $5k TV at Best Buy and it turns out to be defective. You bring it back to Best Buy, who can only refund it back to the credit card that you already closed. Now, if the refund wasn't going to go through, it means you could either return the TV to Best Buy and get nothing back in return, or you can head back home with a broken TV. Most stores will process refunds only to the same card that was used for payment.

@bluest wrote:
I believe it was reported as "not later than 2 months", at least that's what I see in the BoA alert here. Technicaly the missed payment was for june and I paid it after receiving august statement.

Thanks for your suggestion on ATT, I will do that!

So it was just a 30-day late? If so, your scores should fully recover within 1-3 years. Some people recover faster, some slower, depending on what's in your CR.

Most lenders do not care as much about minor derogs such as these though once they are past 24-36 months. In a way, it will be affecting you, but the damage done tapers off pretty quickly as well.

Hopefully you can get something worked out with AT&T.

Re: What to do to reverse the damage

navigatethis12 — Sat, 12 Oct 2013 01:40:06 GMT

@red259 wrote:
I wouldn't say Bank of America did nothing wrong. Maybe nothing illegal, but lets not kid ourselves. Bank of America has this policy so they can jam people up and charge extra interest. They are counting on people to forget to remove all their automatic payments. If the bank wanted to do the right thing by their consumers they would refuse to honor transactions on closed out cards. Instead they take advantage of their customers who may not be savvy to this practice. So while they did not do something illegal, I would suggest that they are morally wrong for this type of business practice.

So it's their fault you decide not to cancel all recurring charges and check statements to make sure everything is as it should be? Everyone is always so quick to blame banks just because they're banks. There comes a time when people should stop blaming others and accept they are at fault. The governement should not have to baby people just because they refuse to be responsible.