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.

At 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:
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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.