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.