Monday, November 17, 2008

Consider Putting Your Money Under the Mattress

A while ago, back when we had those tiresome, take-forever-to-load Pajamas Media ads, they featured a particularly interesting banner: Washington Mutual was offering three percent (if I remember correctly — it may have been higher) for those opening savings and checking accounts.

French burglarAt my urging, the future Baron took what remained of his Sallie Mae school loan (the school takes their cut first and then they leave you hanging till the last minute before they finally let go of your remaining money. Yep, Sallie Mae and universities have a good scam going there, but that’s not the reason for this post) and plunked it down in a Wa Mu account. He can thank me and the Pajamas Media ad for the resulting mess.

I won’t bore you with the details of all the problems Wa Mu repeatedly caused him, except for this crucial and rather scary bottom line:
- - - - - - - - -
When he told them he wanted to close his accounts, both savings and checking, and move them to another bank, without notifying him of their action, Washington Mutual simply moved all his money to the savings account. He only found this out because he tried to use his debit card to pay for gas and there was no money in his checking account. Zip. Nada.

Not only that, but they refuse to let go of this savings account. They won’t electronically wire it to his new bank, not will they send him a check to close out the account.

The only way they will surrender his money, they told him, was if he physically went to a Wa Mu branch and applied in person for his money. The nearest branch at the time was in the Washington, D.C. area, about five hours away. But that was last week. Now that one has disappeared and the nearest two are in Georgia or New Jersey. Or at least they existed yesterday.

So in order to attempt to retrieve his funds — the only money he has to live on — he would have to travel twelve or more hours on a class or lab day and thus lose time from his education...which would, of course, have a deleterious effect on his grades. And based on their behavior to date, I have my doubts that Wa Mu would surrender the fB’s money even if he did make that long drive.

Without this money, he has no place to live, no way to buy gas, and no food except what he can scrounge in the cafeteria when its hours don’t conflict with his lab time.

Yes, we are going to arrange a loan for him so he eat and have a roof over his head. And yes, we are going to talk to a lawyer. But legal fees will probably eat up what he has in the bank and then some.

So our Hobbesian choices are (a) pay more money to get his funds back than the funds themselves total up to, or (b) let Washington Mutual take his three thousand dollars and exit, stage left. This three thousand dollars is a loan from Sallie Mae, the lending institution which funds school loans. They are a very large bureaucratic organization and they will expect their money returned with interest. The fact that he never got to use it won't interest them.

Beware of banks. They have bigger legal departments than you do and they can play a very protracted waiting game with small savers like the future Baron.

Believe it or not, despite being taken over, as the previous link shows, they still have a web presence.

You won’t believe their motto. It ought to be CAVEAT EMPTOR. Instead, this organization proclaims on its default page: “Same Friendly Attitude. Way More Muscle.” Meaning they were taken over by another bank.

Are we supposed to be more reassured because they were bought out by JP Morgan Chase? Their friendly attitude seems to be “come and get it if you can find us.” Meanwhile, the take-over bank says they don't have any control of this until sometime next year...they're in a long transition period. Thus, they told him, he will have to deal with Wa Mu.

Yes, he does feel like he's living in a Kafka novel.

Avoid Washington Mutual like the plague because it closely resembles one, at least for this poor college student.

26 comments:

ZuppaFly said...

As my Mama always said, "Have cash on hand". Even if the US dollar becomes nearly worthless, getting money out of an ATM will prove to be a joke when the SHTF! If you can afford it, get a fire safe, hide it and bolt it to the floor.

In case you didn't know it,(well, now you do!) most banks don't have large sums of cash on hand and you will have to wait several days sometimes for them to order your money! That's what happened to me. You should have seen the looks on their faces when I cleaned out my savings account!

Dymphna said...

zuppafly--

good advice, though it makes paying your bills difficult.

ANY bank branch can transfer three thousand dollars in the weeks since he has been requesting his money.

This run-around he's gotten is a crock.

Henrik R Clausen said...

We need to shop around for banking services with the same critical sense as we apply to food, clothes or computers. Look at reputation, business practices and solidity.

Here's an interesting account of how Merrill Lynch (the one with the big bull) dropped dead in its tracks. Interesting detail: The ethnicity is listed of those two men who ordered the slackening of internal control and procedure.

We need to be responsible citizens. Grow up. The State pretends to be able and willing to fix things, but it isn't.

pleas said...

Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.

Conservative Swede said...

Beware of banks. They have bigger legal departments than you do and they can play...

Yes, that's the bottom line here. So the solution is to get the same working for you for free. I.e. to open an account at another bank and then ask them to get the money transferred from the Wa Mu bank account. They know how to do it! They are motivated, have the muscle and the skills. For them it's just another routine task.

This is how it works where I live anyway.

Dymphna said...

pleas--

Neither a pesky scold nor trite aphorist be
For preachers oft loses their hearers’ sympathy,
While sermons dull your own humility.

++++++

IOW, stuff that trite piece of doggerel you posted in your ear... or any other orifice for that matter.

Your comment was less useful than used paper from the bottom of the canary cage.

Charles Martel said...

Dymphna,

Why so upset? Did I miss something?

Dymphna said...

Henrik--

When he joined Wa Mu it had an excellent rating. The financial news says:

Seattle-based WaMu, which was founded in 1889, is the largest bank to fail by far in the country's history. It had $307 billion in assets...

So back in June could *you* have seen this coming?

In what way was putting one's money in an old and venerable bank, one with 307,000,000,000.00 in assets not "being responsible"?

So tell us, Henrik, is all *your* money in your sock? Is that how you can afford to preach about being a grown up?

Give me a break. Preaching is one thing I sure don't need right now.

And telling us we need to grow up is insulting.

----

Conservative Swede:

In the old world of three months ago, your advice would have worked. But he tried that and his new bank can do nothing because the federal government has seized the assets of Wa Mu and Wa Mu refuses to deal with the new bank. You can send an order for an electronic transfer and your bank can say "no thank you".

Now Wa Mu has been sold to JP Morgan Chase but tJPMC doesn't take over till next year. When he called *them* he got the nice message, "So sorry, sir. Have a nice day."

IOW, in order to get his money he will probably have to go to the government -- i.e., federal court -- paying a lawyer who is licenesed to practice in federal courts -- and make his case.

And then after he "wins"? Why he gets to give his lawyer the three thousand dollars from his account and...and what? an IOU for the rest of the legal fees?

I guess he's lucky that all he had to lose was three thousand dollars. It's a good thing he didn't manage to save as much as he'd hoped in the year he worked before beginning grad school or he'd be feeling even more ripped off than he already does.

GiGi said...

I had a CD that matured at WaMu in Feb 2008 and it took a month for me to get them to release my funds to me. I went to another bank I did business with to enlist their help. A banking offical there actually tried her best to get WaMu to release my funds, they would not. They pulled every dirty trick in the book and then a dozen more, to keep my money. I contacted every State and Federal agency I could and none helped. I had the Office of Thrift Supervision look in to it and they said WaMu denied they did it. That was all they did, just asked them. I found out later one of the main presidents at WaMu was also on the board at the Office Of Thrift. You have my deepest sympathy I know from my horrible experience with them you are in for it with the bank from hell. I am sorry to hear they are doing this to you. I wish you good luck, I really do.

GiGi said...

dymphna: Maybe this website can give you an idea on what to do, I doubt it but it will verify everything I said about the "fox in the hen house" OTS/WaMu.
http://www.wamufraud.com/

Conservative Swede said...

Dymphna,

Wow, is this how bad things have gone! I hadn't realized.

pleas said...

Dear Mrs Dymphna:

Perhaps I should have given the source for what you term a "trite piece of doggerel".

From Shakespeare's Hamlet, 1603:

LORD POLONIUS:
Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.

senatortombstone said...

Dymphna,

I work for the mortgage division of a major financial lending institution that owns thousands of bank branches. While I am not an expert on banking procedures, I think that there should be some way for the future Baron to get his money returned to him without having to drive to a branch. You need to call the manager of the branch you have been dealing with and ask them to fax or email you the form that future Baron would sign were he there in person to cancel his account. You will also want to ask for them to draft a form authorizing them to cancel the account and have it completed in front of a notary. You will probably need to send them two forms of ID - state issued and credit card or perhaps a student ID. With all of this, they should have everything they need to complete your request to cancel the account. You can them have them wire the balance into another account or FedEx you a certified check.

Trust me, even with banks, where there is a will, there is a way. There is no reason to travel, hire a lawyer, or abandon these funds. With a phone call or two, you can get them back.

I have gotten banks to agree to wire transfers of over $100,000 by a phoned or faxed request.

Paul Green said...

"Some will rob you with a six-gun, and some with a fountain pen."

-- Woody Guthrie, "The Ballad of Pretty Boy Floyd"

Or these days, with a computer.

Dymphna said...

Oh, fiddlesticks, pleas. So what if you quoted Shakespeare??

Surprise! Old Will right now is rolling over in his grave LHAO...

Those words are spoken by one of the biggest windbags in the history of drama.

The character is Polonius, a nattering old fool of a father. He is giving a farewell lecture to his son, Laertes, who is often shown rolling his eyes as Dad blathers on and on.

It is Act 1, Scene 3. Polonius comes into the room where his son and Ophelia, Laertes' sister, have been discussing Hamlet's intentions.

Polonius interrupts them to hurry Laertes along. Of course he also slows him down with this barrrage of foolish advice:

Yet here, Laertes! aboard, aboard, for shame!
The wind sits in the shoulder of your sail,
And you are stay'd for. There; my blessing with thee!
And these few precepts in thy memory
See thou character. Give thy thoughts no tongue,
Nor any unproportioned thought his act.
Be thou familiar, but by no means vulgar.
Those friends thou hast, and their adoption tried,
Grapple them to thy soul with hoops of steel;
But do not dull thy palm with entertainment
Of each new-hatch'd, unfledged comrade. Beware
Of entrance to a quarrel, but being in,
Bear't that the opposed may beware of thee.
Give every man thy ear, but few thy voice;
Take each man's censure, but reserve thy judgment.
Costly thy habit as thy purse can buy,
But not express'd in fancy; rich, not gaudy;
For the apparel oft proclaims the man,
And they in France of the best rank and station
Are of a most select and generous chief in that.
Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
This above all: to thine ownself be true,
And it must follow, as the night the day,
Thou canst not then be false to any man.
Farewell: my blessing season this in thee!


Go read more Shakespeare, pleas.

For heaven's sake, please read Hamlet and study Polonius' character. When he's not being a dithering idiot, he's interfering.

Dymphna said...

Senator Tombstone--

Been there. Done that.

Go to gigi's link. As she said, it's FRAUD.

Google WA MU sucks. Enjoy the revelations...

Henrik R Clausen said...

Easy now, Dymphna. Two points:

- Some of my money *is* away from bank accounts. More is to go.

- That 'we' need to grow up was a very collective statement, inspired by Diana West. Also a subtle hint that much more like this is going to come, we ain't seen nothing yet.

This will get worse before it gets better. I'd expect more dirty tricks. But as usual, doing what you do - publishing it - is a very healthy way to set things right.

pleas said...

Dear Mrs Dymphna:

This is the first time I ever heard anyone claim that "to thine own self be true" is foolish advice. In the passage you denigrate, the elegantly expressed maxims are all good rules for living, no matter how timeworn the sentiments expressed. (One of the beauties of Shakespeare is that profound truths are sometimes uttered by less than admirable characters. Take your own advice, and read more of the Bard.)

That said, debt is slavery - there is no way around it. An unfortunate aspect of our modern civilisation is the illusion that debt is affordable for every man and woman. When most people become convinced of that, and it becomes normal for everyone to saddle themselves with debt, those few who practice thrift - i.e., those who actually save to buy a house or automobile or household goods - are left in the lurch. Larger and and larger amounts of (credit-fuelled) money entering the economy have the effect of punishing those who are prudent with their cash - their hard-earned savings are suddenly (in terms of purchasing power) made paltry by credit inflation. Those who are improvident and unwilling to defer today's pleasures for tomorrow's - the borrowers, in other words - are rewarded.

So, to keep up with the Jones's, most of us end up borrowing, hoping that everything will go well even though there remains a lingering, nagging residue of doubt telling us that history is something that also happens to us, not only to others. By borrowing money, however unwillingly, we put our fortune in the hands of others, in the hope that things will turn out right.

Seen this way, borrowing is a form of gambling. We have rules that govern the lending of money, and hope that they will work, but every now and then, someone comes along (sub-prime lenders this time) and upsets the gaming table, scattering players into confusion.

We can of course demand yet more layers of regulation upon our own actions and those of rats like Washington Mutual. Unfortunately, the end result is more governance by Big Brother, ever more creeping or not-so-creeping socialism, and a further cozy settling in to a nest of debt by those who can't afford it, until the wheel spins once more round again.

Henrik R Clausen said...

Much better than the ever-increasing demands for 'regulation' and 'control' are sites like WaMu Sucks.

Citizen awareness beats big government any day.

pleas said...

Dear Henrik R Clausen:

You are absolutely right.

Has anyone got together a class action lawsuit against Washington Mutual yet?

livfreerdie said...

Don't know if WaMu falls under the Fed Reserve, but found this:

http://federalreserveconsumerhelp.gov/?District=14

Tom

SouthernFriedBear said...

I can't really add anything on how to get your money back now, but I can speak on bank reasearch.

Sites like Calculated Risk have saved me from bad losses.

Here they are starting to sound the alarm about wamu at the end of 2007.

PM said...

sounds to me like another citibank .... I personally am aware of a few such cases, even dating back to the 2005-2007 period, when no financial crisis was evolved...

anyways have you noticed one special thing! all those bank that are facing currently financial problems, as well as doing such stuffs also have a special department of Islamic banking, or are deeply involved in sukuk...

so the big point is, they can do this and really get away very easily... because they have a very big black hole of draining money out, which is known as Islamic banking... a arena which is not governed by any real state regulators, and is neither controlled...

lets hope that the money he will loose will not land up in terrorism, 20% of money swallowed by this black hole goes to zakat... and official terrorism funding infrastructure.. and document regarding that can be located in almost every court around the globe....

Dymphna said...

playing catch- up here:

Live free or die...many, many thanks for the link. I have sent it on to him so that he can call that Federal Reserve office and start the ball rolling.

Thank you for saving me time on Google. Don't know if I'd have gotten anything as good.
______

PM --good point. I wonder how far the Muslim inroads are into *all* of American finance are and how we'd even find out...you're talking about the top of the food chain there, with our elitists making sure they get their cut, no matter who is doing the deal.

_____

Southern Fried Bear...thank you. The news is too late to save his account -- or at least to get it returned to him in the near future -- but at least it's a heads-up.

I wish there were an accurate way to check out the banks which hold our savings. Only two, but I thought they were solid:

Ever Bank in NY

and

Bank of America. An employee at BofA told the Baron that her pension has simply gone away. Must've been BofA stock.

_____

Henrik--

My understanding is that these class action suits are about mortgages. He had a checking and savings account. When he asked to close both accounts and send the money, they moved his checking money into the savings account and then froze it. All without telling him.

That's why the Federal Reserve link that Live Free or Die provided will give him a place to start -- i.e., to ascertain whether moving his money without permission is against regulations.

I have an idea that since it's a savings account, he now has to deal with the FSLIC rather than the FDIC. There may have been some advantage to the bank in making that move and dealing with the former rather than the latter.

This has left me paranoid, and tht's not one of my characteristics, though it was during the Chazzer imbroglio. That died down as issues resolved themselves, though -- and as his impact on our blog's functioning became nil.

I think part of the paranoia derives from the larger, global financial crisis and the fact that no one really knows what is going to happen --

---other than the fact that the US will become mini-me Europe with everything nationalized. And probably the EU will totter and fall for lack o' funds. That is, unless it suits the Saudi's plans to prop them up for the forseeable future.

So much new territory that every expert has his own opinion and few of them agree on the details. And we know where the devil is, don't we?

Thanks y'all for the practical help.

Anonymous said...

Over a month later, and Christmas has come and gone. I'm reading this late, but did you ever resolve this? Is this something you could use paypal to transfer from the savings electronically like other banks would, into a closer account with a more stable bank? Right now I have Wachovia and Bank of America, but in 6 months I could be in the same spot.

Living in NJ, I'm not sure the trip up here would have been fruitful. I think some of those locations have closed.

Baron Bodissey said...

ernieoporto --

The situation has been resolved. Dymphna or I should have said something about it — what probably happened is that each of us thought the other had posted an update.

About six weeks or so after he made his request, the future Baron received a check in the mail for the balance left in his account. He had to live for a while on a loan from the Bank of Ma and Pa, but otherwise he made it through OK.

Let’s hope his new bank doesn’t fail.