Bank charged off checking account that had $0 balance?

[SSPA87]

I wasn't sure what forum to put this on, so I chose to put it here.

I had a checking account with WSFS and today I received credit alerts that I had a new charge off! This account was in the negative last year but I set up payment plans and paid it to zero so I was in good standing. I have not heard anything from them since it was paid up. Once it was in good standing, I just left it be and didn't deposit money into it since there are no local bank branches so it was obsolete to me. If they just Closed it, that would be fine. But they marked it as a Charge Off, and I don't know how or why they can do that seeing as there was no amount to charge off? 

Any thoughts? Obviously I will call them, but wonder if anyone else has heard of that?

[RobertEG]

It was likely charged-off while it was negative, per federal banking regs.

You cannot use the date that a charge-off is reported as the date of the CO.

Creditors/banks dont report when they actually did a CO, they only report the fact that they did so at some prior time.

What is the DOFD, and how long was the account at a defecit?

[SSPA87]

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@RobertEG wrote:

It was likely charged-off while it was negative, per federal banking regs.

You cannot use the date that a charge-off is reported as the date of the CO.

Creditors/banks dont report when they actually did a CO, they only report the fact that they did so at some prior time.

What is the DOFD, and how long was the account at a defecit?

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It was not delinquent for very long. They contacted me to pay it off in installments and to stop charging late fees if I paid as agreed. I paid it off in March I think, possibly even earlier this year than that. I was then told my accountwas back in good standing and could begin using my debit card again if I deposited funds. I chose not to since the bank is not local to me anymore. I'm just really confused. I'll call tomorrow and can hopefully get it sorted out. I finally had a clean credit report and now this! I'm so upset! No warning or anything, this is at least 6 months after I have had my last contact with the bank. (And at least 6 months from the last I heard from them)

[iv]

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@SSPA87 wrote:

It was not delinquent for very long. They contacted me to pay it off in installments and to stop charging late fees if I paid as agreed. I paid it off in March I think, possibly even earlier this year than that. I was then told my accountwas back in good standing and could begin using my debit card again if I deposited funds. I chose not to since the bank is not local to me anymore. I'm just really confused. I'll call tomorrow and can hopefully get it sorted out. I finally had a clean credit report and now this! I'm so upset! No warning or anything, this is at least 6 months after I have had my last contact with the bank. (And at least 6 months from the last I heard from them)

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Do you actually close the account after paying it off, or just leave it there, at $0.00?

If you left it open, the bank may have charged you monthly fees after the payoff, or a dormant account fee after those six inactive months (although a year would be more common), and then charged it off when those were unpaid.

[grillandwinemaster]

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@iv wrote:

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@SSPA87 wrote:

It was not delinquent for very long. They contacted me to pay it off in installments and to stop charging late fees if I paid as agreed. I paid it off in March I think, possibly even earlier this year than that. I was then told my accountwas back in good standing and could begin using my debit card again if I deposited funds. I chose not to since the bank is not local to me anymore. I'm just really confused. I'll call tomorrow and can hopefully get it sorted out. I finally had a clean credit report and now this! I'm so upset! No warning or anything, this is at least 6 months after I have had my last contact with the bank. (And at least 6 months from the last I heard from them)

---

Do you actually close the account after paying it off, or just leave it there, at $0.00?

If you left it open, the bank may have charged you monthly fees after the payoff, or a dormant account fee after those six inactive months (although a year would be more common), and then charged it off when those were unpaid.

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Dang!! 

This reminds me that I need to officiant call and close an old SDFCU account! 

Sorry this happened to you OP.

[SSPA87]

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@iv wrote:

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@SSPA87 wrote:

It was not delinquent for very long. They contacted me to pay it off in installments and to stop charging late fees if I paid as agreed. I paid it off in March I think, possibly even earlier this year than that. I was then told my accountwas back in good standing and could begin using my debit card again if I deposited funds. I chose not to since the bank is not local to me anymore. I'm just really confused. I'll call tomorrow and can hopefully get it sorted out. I finally had a clean credit report and now this! I'm so upset! No warning or anything, this is at least 6 months after I have had my last contact with the bank. (And at least 6 months from the last I heard from them)

---

Do you actually close the account after paying it off, or just leave it there, at $0.00?

If you left it open, the bank may have charged you monthly fees after the payoff, or a dormant account fee after those six inactive months (although a year would be more common), and then charged it off when those were unpaid.

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Wouldn't I get some sort of notification from them if it was incurring fees? I literally got nothing after it got paid up, so i thought nothing of it. It was a Free Checking with No Minimum Balance. It's so strange and hopefully just a mix up that I can get sorted out. Very bizarre! 

[iv]

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@SSPA87 wrote:

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@iv wrote:

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@SSPA87 wrote:

It was not delinquent for very long. They contacted me to pay it off in installments and to stop charging late fees if I paid as agreed. I paid it off in March I think, possibly even earlier this year than that. I was then told my accountwas back in good standing and could begin using my debit card again if I deposited funds. I chose not to since the bank is not local to me anymore. I'm just really confused. I'll call tomorrow and can hopefully get it sorted out. I finally had a clean credit report and now this! I'm so upset! No warning or anything, this is at least 6 months after I have had my last contact with the bank. (And at least 6 months from the last I heard from them)

---

Do you actually close the account after paying it off, or just leave it there, at $0.00?

If you left it open, the bank may have charged you monthly fees after the payoff, or a dormant account fee after those six inactive months (although a year would be more common), and then charged it off when those were unpaid.

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Wouldn't I get some sort of notification from them if it was incurring fees? I literally got nothing after it got paid up, so i thought nothing of it. It was a Free Checking with No Minimum Balance. It's so strange and hopefully just a mix up that I can get sorted out. Very bizarre! 

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Normally you'd expect a letter, or a notation in a mailed statement (or online statement if you'd opted-out of paper)... but since you knew the account was at $0, is it possible you may have received but not read a dormancy statement (since you knew there was no activity)?

The dormancy fees would be separate from the free/no minimum balance deal - without any transactions in or out in a 6 or 12 month period, many banks either start charging a dormant account fee (or turn over any cash in the account to the state).

[tricie17]

Going forward make sure what accounts you are not using and have 0 balances, close out.  Keep the institutions from making money off of you and if they can not help you why put your money there.