two week banking nightmare appears to be over

TL;DR

I deposited a check. The sending bank acted squirrelly¹, confusion ruled the land, my bank (Ally) suspected foul play and locked all my accounts on Feb 29th.

During the lockout my direct deposits and 2023 tax refund were deposited in the inaccessible accounts, so I couldn’t use them for damage control or to access cash. Luckily I still had my Amazon Prime credit card for short-term needs. Unluckily the payment date was coming up and I had no accounts to pay it from….

I scrambled to open accounts elsewhere and moved all my direct deposits over. I had Chase pay my Prime CC from the new savings². All those emergency maneuvers were completed by yesterday. This morning (Mar 15) the two banks finally talked to each other and the sender; it was resolved within an hour. grrrrrr……

lessons learned

1. if things go awry, have a new check cut instead of redepositing (even if CS says it’s ok to do so)
2. have accounts in different financial institution so one bank can’t do critical damage to your liquidity
3. have some cash on hand³ in case you need to deposit something to open another account
4. have any direct deposits go to separate institutions for the same reason
5. you can’t pay a Chase CC balance with a Chase savings account
6. you can’t Zelle from a Chase savings account although Zelle itself allows it
7. USAA “disables email verification 1x/year”, which may result in being locked out of the website.

There were also some subjective lessons. Ally and USAA customer service is exceptional; Ally fraud department ranges from unhelpful to bizarrely hostile. Chase’s in-person lobby experience continues to feel predatory, like walking onto a used car lot.

conclusion

I really like Ally and I am glad they reopened my account[s]. My Ally savings account yields ~44x (times, not percent) what my new Chase savings yields. My Ally checking yields the same as Chase savings.

I will keep the new checking and savings (different institutions) open just in case.

silver lining

I didn’t realize it at the time but my new checking might be eligible for a $200 incentive. I opened the account on the last day of the offer:

A qualifying direct deposit is a single Automated Clearing House, also known as ACH, electronic deposit of $100 or more of your United States military salary pay, retirement pay, military disability pay, or annuity pay for a surviving beneficiary from Defense Finance Account Service….

My VA disability benefit is small but should meet those requirements. If so, it feeds the emergency fund. If not it’s no harm, no foul. I’ll report back in ~June when the payout timeline appears to be satisfied (next direct deposit + 60 days).

Update: my VA deposit hit on 3/28, so the alleged bonus should show up in late May or early June.

update to CFPB complaint

On Mar 29th Ally responded:

Restriction Removed/Unsuspended account

The CFP wanted feedback on the now-closed complaint, so here it is:

The response that they unsuspended/unrestricted the account is representative of the entire experience. It is incomplete (they locked ALL the accounts, not just “the account” in question), devoid of explanation, and significantly delayed. I strongly encourage all consumers to HAVE ACCOUNTS AT MULTIPLE INSTITUTIONS so all your accounts cannot be locked on a whim or by automation, without explanation, and without reasonable timeline for resolution.

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1. they made one attempt (!) to contact the check sender for verification on a phone number from the 90s instead of what’s on their account (!!) then marked it Refer To Maker (!!!). A snowballing shitshow ensures. ↩

2. funded by a replaement check which went through with zero drama ↩

3. I had $12 cash, not enough to meet the CC $35 minimum at least.. Normally I’d have a bit more but I’d expected the check to be deposited so I hadn’t made a routine withdrawal from my retirement account. I couldn’t make a withdrawal now because it too would be direct deposited in the locked account. Then I remembered: I had pesos in my passport pouch. I had ~700 pesos which was ~$40 after conversion. I used that cash to pay the minimum and paid off the rest a few days later when the new savings balance was available. ↩