BANK CAUSES HEART ATTACK?

BOL Guru Sam Ott

A customer was rushed to a hospital after she opened a letter from her bank which said that her accounts were frozen as a result of her death. The customer, a seventy-one year old woman who was very much alive, immediately tried to contact the bank, but spent hours battling an automated phone message system. She ultimately was rushed to a hospital with chest pains. The bank's erroneous conclusion about the state of her health, coupled with the customer's inability to get through to a bank employee in order to quickly rectify the situation, was a recipe for disaster.

What can you learn from the trauma needlessly suffered by this elderly lady?
First, before a bank acts on information, it should be certain of its source and validity. Here is an example: A woman went into a bank where her father had an account on which she was the POD beneficiary. The grief-stricken woman told the teller that her father had just passed away and she, as the POD beneficiary, wanted to close the account. They could not imagine that someone would lie about such a thing, so they allowed her to have the funds. Turned out pops was alive and kicking -- and ready to sue the bank unless they gave back his funds.

Second, question everything. Mistakes are made. Some information may not be reliable. The bank error in the death letter incident apparently occurred at a bank office that processed the customer's pension payments and resulted in the letter that stated "We regret to learn that Mrs. Smith has passed away. Law requires us to return all government benefits paid after the date of death". Read more about it here.

Third, make sure you ask the right questions. We just placed a new case in the Secured Transactions section of BOL's Court Watch that illustrates this point. The law at the time a loan was made required the bank to file a financing statement with the town clerk of the town where the debtor was conducting business. By chance the debtor's street address was the SAME as the street where the business was being conducted but was in a DIFFERENT town. The bank asked only for the debtor's street address and simply assumed that was also the locale where it was conducting business. The court held the security interest was not perfected. The court also determined the debtor did not try to mislead the bank due to the fact the bank did not ask where business was being conducted. It just assumed it was at the mailing address.

Fourth, when you first become aware there may be a problem, move swiftly to investigate the facts and remedy the situation. The longer it goes the greater the potential damage. Automated answering systems are great, but your AVR system should provide the customer the option to speak to a "live person". The bank in the death letter case could have solved the problem by simply providing a contact person's name and number in the notification letter. Instead the frantic customer was subjected to "phone hell" which greatly aggravated the problem and could lead to a lawsuit.

REMEMBER
The old axiom "haste makes waste" usually is applicable. Confirm facts. Verify everything. The accuracy of all correspondence with customer or regarding the customer should be verified and thoroughly reviewed to insure that you don't have to visit your customer and her attorney at the hospital.

First published on BankersOnline.com 07/25/02