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Media Resources


Release Date: 08/22/2012

Bank of America to Stop "Zombie Account" Practice on Closed Accounts

Consumers Union Hails Decision But Bank Switching Obstacles Remain
SAN FRANCISCO, CA—In a victory for consumers, Bank of America announced this week that it will no longer reopen accounts when electronic deposits or debits post to accounts that have been closed by consumers.  In its May 2012 report, Trapped At The Bank, Consumers Union denounced the practice of banks creating “zombie accounts” as one of many issues that can make switching bank accounts a hassle. 

When banks unilaterally reopen closed accounts, typically without notifying consumers first, these “zombie accounts” can result in customers unknowingly being charged hundreds of dollars in penalty fees or even monthly maintenance fees. 

“While this is a welcomed change in policy, consumers at Bank of America and other banks continue to face a myriad of obstacles that can make switching to a new financial institution a time-consuming mess,” said Suzanne Martindale, staff attorney for Consumers Union, the policy and advocacy arm of Consumer Reports.   “That’s why we need Congress and the Consumer Financial Protection Bureau to enact reforms that make it easier for consumers to move their money.”

Public outrage over unfair bank practices and rising fees has prompted more and more consumers to consider switching to new financial institutions in search of better deals.  According to a recent Consumer Reports National Research Center national survey, nearly one in five customers said they considered switching banks in the last year, but the challenge of transferring automatic payments and other factors kept half of them from making the switch.  Sixty-three percent of those who considered switching said concerns about the trouble it would take to transfer all their automatic payments and deposits to a new account kept them from switching banks.

Consumers Union has called on Congress and the Consumer Financial Protection Bureau to consider a number of policy changes to enhance consumer choice and bank competition, including:

  • Banks should be required to bear the responsibility for transferring a customer’s automatic payments and deposits from the old account to the new account within 14 days

  • Banks should provide same-day electronic fund transfers at no cost to consumers

  • Check hold times should be reduced so consumers can quickly access deposits in new accounts

  • Banks should be prohibited from assessing unfair fees for closing accounts

  • Banks should be prohibited from reopening accounts after consumers close them

  • Banks should be required to provide consumers with clear and accessible account closing procedures

  • Bank regulators should examine the feasibility of portable bank account numbers to facilitate easier bank switching.

For tips for consumers who are unhappy with their bank, see Consumer Reports' More Bank Fees Are Coming: How To Fight Back Or Flee.

Michael McCauley, Consumers Union, 415.902.9537 (cell) or
David Butler, Consumers Union, 202.462.6262 or

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