The Wealth Extraction Industry

February 19th, 2013 — 9:34am

Your bank is handing out free money! Here’s the catch: it’s your money! About a year ago, I received notice from Allstate that they would not be renewing my home owners insurance policies for the next year. They had a partner company, Universal North America, send quotes to me for a new policy, but Universal’s insurance policies were more expensive than Allstate’s overly priced insurance. I was able to get coverage from State Farm for two-thirds the price.

Before my State Farm policies were activated, I logged into my U.S. Bank (from now on, USB) mortgage account to update my insurance information. I was surprised to find that both Universal and State Farm had somehow found their way into USB’s system under my accounts. I deleted Universal from one property, but I was not able to remove them from the other. I emailed USB to inform them of the problem. Then I called just to make sure. They told me Universal would be removed from my account.

Either I failed to verify that Universal was removed from my account, or I did check, but they were later added back onto my account. In January of this year, I received notice from USB that my escrow was short by over $800. This didn’t make any sense; I should have been receiving a refund since my insurance costs had dropped. They were kind enough NOT to send an escrow statement. So I went back online to figure out what happened. Sure enough, I had been charged $604.00 the previous May for insurance I didn’t have from an insurance company with whom I’ve never done business.

Before I step into the juicy details of how it gets even better, I want to take a brief break from the story to discuss the absurdity of what has happened here. Go all the way back to the beginning. Allstate drops my policy (and many others). My information is handed over to another company that solicits me to purchase an even more expensive policy in a location were there are plenty of less expensive options. Was this a service by Allstate to ease the burden of finding another insurance company? Or should I interpret it another way? Did money flow backwards from Universal to Allstate to pick off a few new customers? It certainly seems as if it was merely assumed that all the customers whose policies were dropped would gladly accept the new, more expensive, policy to avoid having to spend a few hours finding a new insurance company.

Then I was billed for insurance I didn’t ask for. The only problem was that it was sent to my bank, a willing, albeit gullible, co-conspirator. Had the bill only come to me, I would have tossed it out — end of story. But the insurance company was clever to send the bill where they knew it had a good chance of being paid. Again, was this for my benefit? Did they really believe I wanted the insurance? Or was it an attempt to extract money from me, while hoping I didn’t notice?

Then my bank sent the money! I had no obligation even to inform them that their system was wrong. They had a fiduciary duty to protect my escrow. If there was ever any question as to how the funds were to be spent, they should have asked me before sending out the check. And there were definitely questions. Why would I want two homeowners insurance policies with similar coverage? Even if I did have two policies, why would I want the second one to be escrowed? But more importantly, I warned them before any money was laid out, and they went ahead and misappropriated the money anyway.

Why am I even required to have an escrow in the first place? It should be optional. In theory, it guarantees my insurance and property taxes will be paid, thus protecting the bank’s investment. But I don’t want to lose my house any more than the bank wants to foreclose it. I’m going to pay my taxes. I might be willing to take a risk with insurance (I wouldn’t), but the bank could easily make sure that I pay my bills. And besides that, my credit history is immaculate. The bank does not trust me, although I am trustworthy. The bank requires that I trust it with my money, although it is incompetent.

The entire system is automated. It seems as if it is so by design, not to streamline the process, but to ensure that money is easily extracted from my account and such that it can never re-enter (as we’ll see soon). I am but an unwilling participant in the scheme. If I object, or attempt to interfere in any way, I am shutdown. It is difficult to accept that an unlikely sequence of accidents led to what looks like fraud. On the other hand, it seems unlikely that all these different parties were cooperating and all had malicious intent. Perhaps it was some combination of maliciousness and incompetence. The design is such that I can never know what is intent and what is incompetence. It is a bit of genius. Errors occur frequently. The process is entirely beyond my causal influence. When an error does occur, it can almost never be in my favor (i.e. money comes out of my account in some manner). And because it’s mostly automated, it always appears to be a simple mistake (which usually goes unnoticed).

That aside, I am still trying to get my escrow refunded. I told USB I wanted my escrow fixed and a corrected escrow statement mailed. After a few weeks, I never got an escrow statement, so I called again. They had removed Universal from the system, but the escrow was not corrected. There may have been some confusion on this point because I didn’t explicitly say I wanted the escrow to be refunded. But as I spelled out in detail how the problem needed to be corrected, the bank representative refused. She insisted that the bank can’t talk directly to the insurance company (even though they were in USB’s system). She wanted me to call the insurance company and ask for a refund. I tried to explain that I had no relationship with Universal and that asking some random company for money was unlikely to succeed. Given how badly the bank screwed up, the only response to me should have been “Yes sir, we’ll fix this. Have a nice day.” Instead, I was told I need to fix their problem.

Eventually, I was able to get a manager on the phone. She called Universal and we had a three way conversation. Universal wanted me to send them a written letter and proof that I was insured by another company during this time period. Lots more time and effort on my part so they can return the money that was stolen. It’s like having your house robbed, and upon showing the video evidence of the perpetrator to the police, they demand proof that you even owned the stolen goods. But I agreed to this solution because I’m a practical person, and I just wanted the money returned.

So I sent Universal what they asked for. Now they’re telling me they can’t find a record of the check. I explain to them that I didn’t send the check. They need to talk to USB. But they refuse. So I try to get USB to send them the check number. The money is taken so easily following an unlikely sequence of unfortunate events, but try to get it refunded and all of a sudden a series of firewalls of increasing effectiveness prevents the process from moving forward.

This is where I currently stand. I’m waiting to see if Universal and USB can work this out as they said they would. I’ve threatened to contact the Consumer Protection Financial Bureau and the North Carolina Department of Insurance if they don’t refund my account soon.

The system has been craftily architected to pull money from your account. When the system is functioning properly, money comes out of your account. When the system breaks down, money comes out of your account. Then nowhere exists the competence to return the stolen funds. Is it theft if it was an accident and nobody can fix it? So odd that the extraction process is ruthlessly efficient and the refund process, utterly inept. Nobody will ever tell you that money was accidentally taken from your account. The system just keeps on churning. If you weren’t paying attention, your account is slowly drained over time as errors build. If you were watching carefully, then you have to put up a time and resource intensive fight if there is any chance the booty is to be returned.

Comment » | Banks Behaving Badly, Insurance Companies Behaving Badly

Flu Shot

February 19th, 2013 — 9:17am

My health insurance company sent me a bill for a flu shot from a few months back. They’ve always covered my flu shots in the past. In fact, I thought they were required to, but I’m not sure. I called. They said it was just a mistake, and it was fixed.

Comment » | Overcharging

Beware Inactivity Fees

January 20th, 2013 — 4:43pm

I had about $55 remaining in my NASA FCU account, which I had never gotten around to closing. Most of that money was put in my account when I put up a fight over the change in the appraisal fee at settlement. I got a mysterious letter a few weeks ago that said I had closed my account. I called NASA to find out what happened. They said there is a $5 inactivity fee every month. My account was drained to $0, and then they closed it. Unfortunately, I get all of my statements electronically, and I haven’t bothered to log in any time within the past year, so I had no idea. This is definitely something you need to be aware of when you open an account. There may also be a minimum, above which, they don’t charge inactivity fees.

Comment » | Banks Behaving Badly

Trust Account (continued)

October 21st, 2012 — 10:40pm

Wells Fargo has agreed to refund the trust account.

Comment » | Banks Behaving Badly, Overcharging

Trust Account (continued)

October 17th, 2012 — 9:28pm

So, I’m now in a fight with Wells Fargo over $3.50. They again took $7 out of my account, even after I brought it in compliance with the $1500 minimum. After a few emails, they refunded half. I then threatened to complain to the BBB, Pissed Consumer, and Ripoff Report. They wouldn’t back down. Apparently, they are so incompetent, they would risk damage to their reputation over $3.50. I’ve also added Consumer Financial Protection Bureau. Thus far I’ve contacted the BBB.

Comment » | Banks Behaving Badly, Overcharging

NASA FCU Responds

September 25th, 2012 — 7:43pm

I sent NASA FCU my letter of intent. Here is the response. I guess I have some paperwork fill out.

I received your letter dated September 2012 and postmarked September 20, 2012 in today’s mail. Your complaint about the handling of two loans in 2010 has already been addressed. The NCUA received your complaint in February 2011 and notified you of their conclusion in a letter dated April 14, 2011.

We consider this matter closed.

Comment » | Banks Behaving Badly

Trust Account

September 25th, 2012 — 7:41pm

I store my tenants’ deposits in a trust account with Wells Fargo as required by law. It’s really just a checking account. They told me there is no difference between a regular account and a trust account. But then they decided to start charging fees on all their accounts. They would not make an exception for trust accounts. However, I was told they would lower the minimum account balance to avoid the fee to $700 on my account.

Then several weeks later, $7 suddenly comes out of that account. I yelled at them; they replaced the money, but now I have to find another bank. Rats.

Comment » | Banks Behaving Badly

A place to sleep (continued)

August 1st, 2012 — 4:37pm

See last post.

So the service guy came out. He was able to lower the bed portion of the sofa an inch, which was as far down as it would go. Then he found some cylindrical legs, which were slightly shorter, that look like they belonged to a different type of furniture. After making those changes, the bed is only elevated slightly. We have decided it’s good enough. What boggles my mind is that even with the bed screwed in as low as it can possibly go, it’s still clearly not right. The only possibilities I can think of are either (1) they put the wrong model bed into the sofa, or (2) the sofa has a fundamental design flaw, and they’ve just decided to sell it that way.

Comment » | Shoddy Merchandise

A place to sleep (continued)

July 19th, 2012 — 7:09pm

See last post.

VCF set a time. They called the day before, but it turned out they wouldn’t go to my address. After hanging up, I did some research and found out that there was another store close by. I had to make numerous calls to two different stores. Every VCF seems to have a different system for handling calls. Store 59 has a particularly obnoxious call waiting sound. It’s a loud beep every few seconds. I guess they really don’t want your call.

Eventually, I thought that they were going to call back to set a new time, but after calling a couple of times, I thought maybe they were avoiding me instead. So that evening, I sent a nasty email through their website. This may have been a little premature.

Hello, I waited a week and a half to have a service person sent out to fix my new sofa. Then I was told store 59 doesn’t go to [removed]. After several more phone calls, I found out that store 74 does service [removed]. I’ve called twice and was supposed to receive a return call.

Please take a look at the wonderful quality of this Value City Furniture product! I was not expecting luxury for under $1000, but is it too much to ask that it at least be functional? These photos go up on my blog next week.

In the mean time, I spent a lot of money on this nearly functional sofa bed, and I plan to use it. It’s really wobbly though; I hope I don’t get hurt. I don’t suppose you know what jury awards for product liability torts go for these days? It’s probably a little more than the three dollars in gas it will take to send the service tech out here. Anyhow, give me a call.

I provided links to the following images.

I called again the next morning and they finally agreed to send a service technician. There was also some whining about how they weren’t really supposed to do this since I picked the sofa up myself rather than paying for the delivery fee. Later in the day, someone called about the email I had sent. I told him store 74 had agreed to send someone out; he sounded relieved. Now we’ll find out if they can actually fix the problem.

Comment » | Caveat Emptor, Shoddy Merchandise

A place to sleep

July 18th, 2012 — 9:30pm

My girlfriend followed me to Maryland. She hired MBM Moving Systems to move her stuff. For the most part, everything went fine. But her sofa showed up with oil stains on it. She didn’t pay for an extended insurance policy, so her damages were limited to 60 cents per pound, or $180 for the sofa. This covered slightly more than the cost of having the stains removed.

Unfortunately removing oil stains from fabric is really hard, and the company she hired to do it wasn’t very successful. We decided to flip the cushions over and live with the remaining stains. They weren’t that noticeable. But then we got a big surprise. The bed in the sofa was wrecked beyond repair. I have never even been able to figure out how it was damaged so badly. It must have taken some immense force, like say dropping it a story, yet somehow the exterior of the sofa was not damaged. In any case she was screwed.

But it gets better. In order to get the $180 for a sofa that cost around five times as much, they made her sign a document that said they had no further obligations and that she would not report them to any reporting agencies such as the BBB. And she had to get it notarized. I doubt that such a document would hold up in court if it was challenged, but they still withheld her money until it was signed and notarized.

I needed a cheap sofa for my house. So I bought her a new sofa bed, and took her still-functional-as-a-sofa sofa bed. Value City Furniture (VCF) has lower end furniture that you can get at good prices. We found a sofa bed that I thought was comparable to, but maybe not quite as nice, as what she had, and it was on sale for $500. When we picked it up, I made sure it was intact and that it included the bed. It was possible to buy the same sofa without the bed for $100 less, so I need to make sure they didn’t screw it up. Everything looked good.

And yet it wasn’t. After we set it up and attached the feet, I found out that the top of the bed was three to four inches higher than the bottom of the bed. Basically, it was unusable. I don’t understand how such a thing ever could have even left the factory. It would have take 10 seconds to pull it out and look at it and see that it was not fit for sale.

By now I’m getting upset. She spent around $900 for a sofa that only lasted a few years. Then she spent another $100 on an air mattress to replace the bed. I invested another $500, and we still don’t have a working sofa bed, never mind the time we’ve invested. I drove all the way back to the store to verify the demo model they had shown us did in fact have a bed that was level with the ground. I was told to have the service department have a service technician come out and take a look.

More to come.

Comment » | Caveat Emptor, Shoddy Merchandise

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