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An intolerable level of incompetence


If tort reform ever returns to the national or local stage, it ought to exclude organizations that are truly irresponsible.

For example: my former bank--and others like it.

My ordeal began with a phone call from a fantastic customer representative with Alaska Airlines, which has a code-sharing arrangement with Delta Air Lines. She questioned whether I, an Arizona resident, authorized another individual to use my debit card to book travel in the Midwest on Delta for a third person through an Idaho travel agency affiliated with the airlines.

Expletive deleted.

At that point, though, the damage to my bank account was minimal. I jumped on the phone with the bank to make sure it stayed that way.

My instructions could not have been clearer: Cancel the debit card and immediately freeze all activity on the account.

So imagine my surprise when the bank the next day processed thousands of dollars in additional fraudulent transactions that were submitted for payment after my account had been frozen. The bank's explanation: There is no way--technologically or legally--that banks can stop fraudulent activity, even against a frozen account, once a payee accepts a debit or credit card purchase. What if legitimate payments were denied?

Thanks for telling me--a day late and thousands of dollars short.

I then instructed the bank to close the account immediately, transfer all remaining funds to a new account and not link the accounts in any way.

So imagine my surprise when the bank the next day opened my new account to thousands of dollars of additional fraudulent transactions that initially targeted my now-closed account. The bank's explanation: It had to honor the authorized fraudulent transactions somehow.

I decided to go straight to the top of the bank's middle management. The problem was that Borat speaks more eloquently than this guy. When I asked him to clarify a particularly garbled statement, he replied indignantly: "You do realize that you have a checking account with us, don't you?"

Not for long, bank vault boy.

I pulled my funds from the bank and asked when I could expect a reimbursement of the stolen funds. I wanted them back in a cashier's check.

The bank, however, wanted to deposit them into my account, which was still under attack. Another bank rep understood my concern about this bit of lunacy and promised to handle the reimbursement as I wished. And two weeks later, there was the reimbursement--in the closed account.

Don't know how that happened, the bank rep said.

Systemic incompetence? I offered.

Meanwhile, my new bank assured me that accounts can be frozen to thwart illegal activity. A rep still trying to court my business for the former bank asserted that the new bank lied.

So I asked the American Bankers Assn. A spokeswoman said "operational challenges" may not allow some banks to stop fraudulent activity--which means others can stop it. She wouldn't admit it, but that also means some banks--including national institutions--have opted to not be secure.

The ABA spokeswoman said that linking my new account to my closed account as my former bank did was "an unusual case."

No matter, she assured me. Whenever such fraud occurs, the law mandates customer reimbursements within 10 days.

And what do bank customers do if they need those funds in the meantime?

That problem, I was assured, just hasn't arisen.

Well, my dog has never bitten anyone, but I still keep Hannibal leashed when I walk him. That's called risk management.

And if you don't practice it, tort reform shouldn't protect you.