unautoritized charges on bank account
Complaint
Edwin D. Cheatham
Country: United States
This has been an on going problem. I was told that this was a free then they started charging my bank account. I have tried numerous times to get this stopped but it is still occuring. It is stupid that you have to close an account in order for these charges to be stopped.
Comments
Bank of America apparently only requires a recorded "verbal authorization" which is easy to fabricate, and no one can check anyway since no one knows what you sound like. In addition, it is easy to fabricate doctored recordings differing from what was actually said in the sales pitch, to make it appear that you agreed to buy their "insurance", rather than some deceptive misrepresentation that it was "free". This allows scamming telemarketers to falsely claim "authorizations" to sign up "customers" when no such authorization was given.
Since they already have your account information (from your bank) they don't need to ask you for it, which allows them to alter their sales script so that it doesn't sound like you are agreeing to buy anything. Asking for account information would tip off most consumers that they are going to be charged.
Dispute the fraudulent charges with your bank IN WRITING. Your bank and Smart Step are already giving you the run-around, since you have attempted to stop the charges numerous times. Yes, you WILL have to close your account, and you would be wise to file GLB privacy "opt-out" requests with every financial institution you have accounts with to prevent similar fraud.
If your bank does not refund the money, file a complaint against your bank with the Office of the Comptroller of the Currency (www.occ.gov). Include in your complaint the dates and contact information on the many times you have attempted to stop the fraudulent charges. Consumers have reported that OCC complaints have been the most effective at producing refunds.
Make sure you submit your dispute to BofA IN WRITING to invoke your FCBA dispute rights. Send your dispute IN WRITING to the dispute address from the credit card statement, and do it immediately (probably Certified Return Receipt Requested, since they are already trying to get out of handling your dispute). Under FCBA, you must submit your dispute within 60 days of the statement date on the statement showing the disputed charge.
Don't let them claim it is 60 days from the charge date. It is 60 days from the statement date, which was when they sent you notice of the charges for your review to allow you to dispute them.
Complaints to OCC (www.occ.gov) have been reported to produce some results.
Furthermore, note the various ways in which Smart Step may be falsifying authorization, in violation of the FTC TSR. Since BofA is selling customer account information to SmartStep/Chartered Marketing/Intersections Insurance, this alleged transaction is covered by the TSR authorization requirements that apply to "pre-acquired account information" as well as "free-to-pay" conversion. In summary, that prohibits authorization by written confirmation, requires recording OF THE WHOLE TELEMARKETING CALL INCLUDING CONTEXT, requires that the consumer provide at least the LAST 4 DIGITS of the account number AS PART OF THE AUTHORIZATION PART OF THE CALL, on top of the usual disclosure requirements and prohibitions against misrepresentation.
Odds are, the recording doesn't meet TSR's requirements, either being deceptive, an incomplete recording, or failing to include the requirements for authorization. Odds are the recording disappears. With no recording, there was no authorization. Claims to have sent written confirmation don't meet the TSR requirements for authorization. Hence, odds are, the charges are entirely unauthorized, but you already know that.
Chartered, as a separate contracted telemarketer, is NOT a financial institution for purposes of TSR, even when they telemarket in connection with BofA customer information, and is specifically covered by the TSR provisions governing telemarketing authorization.
Chartered Marketing Services, also known as Chartered Benefit Services, in concert with DMA and other telemarketers, actually attempted to block FTC's implementation of the TSR rules restricting authorizations involving pre-acquired account information and free-to-pay conversion back in 2003, when the FTC released the TSR Final Amended Rule. It appears that FTC won on all issues except Do Not Call applicability to telemarketing connected to financial institutions.
http://fl1.findlaw.com/news.findlaw.com/wp/docs/ftc/donotcall92303ord.pdf
Hence, they "knew or should have known" what the applicable TSR requirements are. They can't even plead ignorance.
Other complaints here.
https://complaintwire.org/Complaint.aspx/tYc4K1wNsACmMAjLZ-BuTg
Don't let them claim it is 60 days from the charge date. It is 60 days from the statement date, which was when they sent you notice of the charges for your review to allow you to dispute them.
Complaints to OCC (www.occ.gov) have been reported to produce some results.
https://complaintwire.org/Complaint.aspx/tYc4K1wNsACmMAjLZ-BuTg
Contact your bank immediately to dispute the charges, and follow up with a written dispute, referring to your phone dispute and the date you called, and sent certified to your bank's dispute address from your statement, to establish the date for "constructive notice" of the fraudulent charge to your bank.
1) There may never have been any telephone contact with the defrauded consumer at all, with the charges having been made using account information already in the possession of the telemarketer.
2) They may have recorded a deceptive "authorization", possibly misrepresenting the terms of the offer, or what the consumer would have to do to activate charges, when they were actually setting up charges that the consumer would have to explicitly cancel (known as "negative-option" or "free-to-pay conversion") and indicating deliberate telemarketing fraud.
3) They may have recorded an "authorization" that fails to meet FTC's Telemarketing Sales Rule regulations for a "verifiable authorization", as explained below. They may still attempt (and usually succeed) at convincing either the consumer or BofA that this "recorded authorization" is legally valid, or that only one or two payments need be refunded.
4) There are even several reports indicating that they appear to have either accidentally called someone else with a similar name (or just claimed to have called them) and claim to have obtained an "authorization" from some stranger, and started charging based on that.
You have a fifth possibility, where they may have deliberately taken advantage of an elderly person with diminished capacity. You should consult with your local District Attorney regarding this, since in a number of states such elder abuse, even by telemarketing, may be a criminal act.
The "recording" of that call, should they actually produce it, may make evident that they were aware of and took advantage of your grandmother's diminished capacity, or even attempted to "fill in" missing parts of the "authorization". And if they somehow won't or can't produce that "recording", then there is NO FTC-defined "verifiable authorization", hence a basis for nullifying the "contract" and demanding a refund of the charges.
Since it is so easy for telemarketers to put through fraudulent charges when they already have consumer account information, FTC in its TSR Final Rule in 2003 required that in such cases telemarketers MUST obtain "verifiable authorization" consisting of a FULL RECORDING of the whole call to capture all representations, and MUST include recording of the consumer disclosing at least the LAST 4 DIGITS of the account number, not just repeatedly saying "yes" to what the telemarketer is reading.
A "mailed confirmation packet", often claimed by fraudulent telemarketers to have been sent (and often reported by scammed consumers to have never been received) is specifically NOT acceptable "verifiable authorization" under FTC's TSR in these cases, although it is a common tactic of fraudulent telemarketers to allege having sent such "confirmation" in responding to consumer disputes of fraudulent charges.
In releasing this regulatory rule, FTC recognized that telemarketing fraud involving "pre-acquired account information" (such as that provided by BofA to Chartered/Intersections) was resulting in a substantial amount of fraud against consumers, and attempted to put in place mechanisms to block it. Many complaints indicate that telemarketers still try to work around these rules, or attempt to scam consumers who don't know what they are supposed to comply with.
The FTC rules also place requirements that those recordings be maintained and available for review and audit for a period of time.
Note that BofA is selling their customer account information to a number of telemarketers, including this one, and unlike some other banks (Chase, Citibank) that are under settlement agreements due to earlier "problems", no other consumer provided information is needed to set up charging of customer accounts.
Consumers can block such sales of account information to telemarketers by "opting-out" under the provisions of GLB (remember those "privacy statements" you keep getting), but in most states you have to actively notify your bank to opt out. California is an exception, as it has state law requring you to "opt-in", otherwise by default you have opted out.
Additional links to complaints here.
https://complaintwire.org/Complaint.aspx/tYc4K1wNsACmMAjLZ-BuTg
Contact your state Attorney General, local District Attorney, and FTC.
http://www.ftc.gov/os/comments/dncpapercomments/04/lsap4.pdf
Pretty much, fraudulent telemarketers think consumers will believe anything, but that isn't surprising when they spend all day conning them. The ones who handle the disputes are the next level up from the ones doing the original script-driven deceptive calling (often careful alterations of the "official approved scripts"), so they have practiced tayloring their deceptive, incredulous, or abusive response.
Disputes beyond the regular 60 days from statement date allowed by FRB Reg. E may be allowed in cases where the bank customer is incapacitated and incapable of disputing for medical reasons.
Also, you are disputing due to FRAUD. Push for a copy of the alleged "recording", as it may fail to show proper "verifiable authorization". They are required by FTC rules to record the WHOLE call. If they refuse to provide the recording contact FTC due to violations of "pre-acquired account information TSR rules, and your state AG or local DA for fraud and financial abuse of a senior.
Do NOT accept a "transcript", as there are reports they may provide alleged "transcripts" that have differed significantly from what consumers remember of phone calls. Not only are there complaints suggesting doctoring recordings, but possible indications of substituting questionable "transcripts" when asked to provide recordings.
A transcript, altered or not, would hide the state of mind and coherence of your grandmother, as well as the clarity of the recording or attempts to hide or fake actual consumer responses, so attempting to substitute one for an actual recording would indicate their awareness of a problem with the recording such as questionable "authorization".
BofA was aware of your grandmother's age, and may even have been aware of her condition, or have become aware of her condition as a result of your grandfather's attempt to dispute the unauthorized charges. Regardless of whether they were aware that specific charges were fraudulent at the time they occurred, once they became aware that they may have been fraudulent, based on state law they may have had a duty to report.
As in many cases of affiliate telemarketing, the contract between BofA and Chartered probably provides for BofA refering problems back to Chartered before taking other actions to resolve dispute. This tends to hide levels of telemarketing fraud, as they get handled as "billing errors", rather than "unauthorized charges", skewing the chargeback statistics, and concealing patterns of unauthorized charging from audits.
However, if your state law requires reporting of possible elder financial abuse of which bank employees become aware, their failure to do so may bring them into noncompliance with state law in an area where state law would not be preempted by federal regulation. Contract terms designed to underreport unauthorized charges would be little defense, both legally and morally.
If you need leverage, you might wish to discuss this matter with your local District Attorney.
"Class Says BofA Targets Latinos for 'Joke' Insurance
By BRIDGET FREELAND
(CN) - Bank of America conspired with "predatory expert" Intersections Inc. and AIG to make tens of millions of dollars by coercing poor, Hispanic depositors to authorize automated withdrawals for purported insurance policies, whose benefits are so paltry they are "almost a joke," and whose real purpose is to fatten the bank's coffers, according to a RICO class action in Houston Federal Court.
The insurance coverage provided is "a pitiful excuse for insurance protection," and the "amounts that supposedly will be paid are small, and the conditions to their being paid at all are highly unlikely to ever occur," according to the complaint.
The class claims that since 2006 Bank of America has profiled its customer-victims, disclosed their confidential information to Intersections, and in turn received "almost $45 million out of the checking account deposits of its poorest customers."
Lead plaintiff Jorge Gonzalez, a native of Mexico who has limited education and English language skills, says he was a typical victim of the scam.
The class claims that when someone who fits Gonzalez's profile opens a Bank of America checking account, the bank sends the customer profile and deposit information to Intersections, "a predatory expert" whose main goal is to "increase the (bank's) bottom line."
Intersections hires a telemarketing company with native Spanish speakers, who call the BofA customers, claiming to represent the bank, to persuade them "to authorize, over the phone, the purchase of some form of insurance, usually ... accidental death or disability," the complaint states.
Once the telemarketer receives an OK from the customer, Intersections begins taking a "so-called 'premium'" out of their checking account, under the name "Smart Step," according to the complaint.
"Most of those withdrawals are divided among Bank of America, Intersections, and the telemarketing firm that made the first call," and a small amount goes toward an insurance premium, the complaint states.
Intersections "derived over $236 million in revenues in 2007 and over $361 million in revenues in 2008," which does not include what was paid to AIG or its subsidiary, according to the complaint.
...
Defendants include Bank of America, Bank of America Insurance Services, BA Insurance Services, Intersections, Intersections Insurance Services, Loeb Holding, Global Contact Services, American International Group, and National Union Fire Insurance Company of Pittsburgh.
..."
"Thursday, February 18, 2010Last Update: 7:16 AM PT 'Privacy Assist' My Eye, Class Tells BofA
By MARIA DINZEO
SAN FRANCISCO (CN) - Bank of America takes money from customers' accounts to pay for services they didn't order and don't want, a class action claims in Federal Court. The class claims the bank charges for "Privacy Assist" services without informing them, and refuses to refund the money when customers catch on.
The class claims Bank of America has been withdrawing $8.99 from their accounts every month for "Privacy Assist," which includes credit monitoring and free access to online credit reports.
Privacy Assist Premier offers identity theft insurance for $12.99 a month, and Privacy Assist Complete includes anti-virus software for $18.99.
Some plaintiffs say they have overdrawn on their bank accounts because of these automatic withdrawals, also known as "electronic funds transfers."
Lead plaintiff Steven Chavez says he was charged for several months of Privacy Assist before he noticed the withdrawals from his account in September 2009, when he became suspicious of a $17.99 charge on his bank statement labeled "Privacy Assist."
When he complained to Bank of America, it denied affiliation with Privacy Assist, Chavez says, though the complaint identifies Privacy Assist as a "wholly owned subsidiary of Bank of America."
Chavez says he contacted Privacy Assist directly, but was refused a refund.
Chavez says he was never provided with any anti-virus software from Privacy Assist, and before he saw the charges on his bank statement, he had never even heard of Privacy Assist.
He said he asked the bank to cancel the service but Bank of America and Privacy Assist are still taking his money, and have "drained his bank account and even caused him to incur several overdraft fees from Bank of America."
The class seeks the return of all money withdrawn from their accounts and damages for unfair business practices, unjust enrichment, conversion and violation of the Electronic Funds Transfer Act. It is represented by Kevin Ruf with Glancy, Binkow and Goldberg of Los Angeles.
..."
Complaint:
http://www.courthousenews.com/2010/02/18/BofAPrivacy.pdf
Also note that California is an "opt-out default" state with respect to GLB permission to disclose bank information to third parties.