Bank of America’s Latest Credit Card “Missed Due Date” Scam

Update February 9, 2009: The worldwide financial crisis has made it harder on banks and credit card companies are facing rising delinquency rates and defaults. The problem of the moving due dates scam has only gotten worse. New Federal rules will go into effect in July of 2010. Until then you can expect an increase in this unethical practice. Read the following article for important details and then read today’s update: Bank Credit Cards and the Moving Due Dates Scam

Original Article Starts Here:

While the Bank of America defends its program of catering to illegal immigrants by offering credit cards to those who lack both a Social Security number and a credit history, it appears to have found another way to pay for this costly policy.

The Bank of America, the 5th most profitable company in the world, is once again playing with the credit history of those American citizens who have the best credit history. The BOA is now punishing its most consistent paying and low risk customers!

RED FLAG!!! RED FLAG!!! RED FLAG!!!

If you have a very low-interest BOA credit card, this warning is for you!

You probably feel very unconcerned because you’ve set up an automatic bill pay to pay 2-3 days ahead of the due date, right? Wrong. You can easily be a Bank of America target!

The BOA appears to have deliberately designed a billing system to periodically generate payment due dates that are 5 to 6 days earlier than normal in an effort to catch automatic bill payers in a missed due date scam! As soon as the earlier than normal bill pay date is missed, your credit card interest rate will zoom up to as much as 25% and you will be assessed a whopping $39 late fee.

BOA pulled this stunt in October 2006 and again this January. A friend who knows that I’m a blogger wanted me to alert all Americans to this highly unethical practice. I was allowed to inspect his consistent payment records and saw that his last scheduled due date was January 6th, so you would expect that the next scheduled due date would have been February 6th. The BOA, however, suddenly squeezed the next scheduled due date back to January 31st. This trap generated a sudden jump in his interest rate and a big late fee.

My friend’s attempts to get satisfaction from calling Customer Satisfaction have been totally unsatisfactory. He moved up the call ladder and asked for a manager. That has been met with typical responses: “He’s not in this office today,” or “You can be assured that he will return your call.” NOT!!!

Bank of America’s ready explanation is that the due date is printed on every statement. Well, what if you happen to be out of town when this sudden due date jump occurs? I’d like to see someone in Congress sponsor a bill that would force credit card companies to give ample notice (say 3 months) before changing a due date.

Here are some typical complaints lodged this past month with Consumer Affairs.com:

David of Buford GA (01/31/07)Long term customer with BOA (5 years) and
have 7 accounts with them from Savings to LOC. I signed up for a promotional
rate on a balance transfer to their credit card. 7 months for 1.99%. Transfer
several thousand dollars and have been incorrectly billed every month for 6
months. Each month I make a 45 minute call to Credit Card Services and each
month they admit the mistake and then credit me the difference for the
mis-charged interest. This month they admitted the mistake but said that we
refuse to credit the interest because they had done it every other month. They
refused to abide by the terms of the contract.

Erin of Sterling Heights MI (01/29/07)
We have been a good
paying customer with Bank of America since 2004; in Feb 2006 they made a policy
change that if a payment is not paid AND POSTED on the due date a late fee will
be applied. Since this time I have had nothing but problems, the computer system
will not allow for same day payments and many times we are paid the same day as our due date. We have paid over $200.00 in late payments in 2006 almost all of
these payments I made the day it was due and yet it posts the next day or two
days later. Then we are slapped with a $39.00 late fee. Twice they have
increased the interest rate from 11.99 to 24.99. They have only adjusted the
late payment twice and the interest rate charge once. . .

Bruce & Cindy of Soledad CA (01/29/07)
On 1/20/06, we went online to make a direct payment from our Bank of America account to our B of A credit card. Our due date was 12/23/06, so we knew that we had plenty of time to make the payment. On 12/26/06, I checked our account online & the account was showing the payment was returned unpaid with a $39.00 return check fee & a $39.00 late fee. I promptly called them & we were told that the checking account number was entered wrong. I told them I had a confirmation number & for them to fax me the transaction. They told us they could not provide that info.

We accepted this offer because of the 0% interest through 9/07.
They are now charging us 7.9% & 19.9% interest. There is no way it should
take 6 days to process a payment that's linked directly into your bank account.
They waited 6 days to process so we would be past our due date & lose our 0%
interest rate. Our checking account number was entered correctly & they
can't provide us otherwise. This has caused extreme financial stress on us.

The list of complaints goes on, but you get the point. I wish someone out there with some knowledge could explain a simple strategy to keep this from happening. In the mean time, spread this information far and wide and either get rid of your Bank of American credit card, or set up several automatic payments monthly.

Update: My friend just told me that he finally found a manager at BOA who was able to correct the situation. After reviewing my friend’s excellent payment history, the manager agreed to correct the situation by removing the late fees and returning the interest rate to the earlier low rate. Additionally, the manager said that he understood what it looked like to consumers, but that this was not the case. He said that for accounting purposes, they must sometimes squeeze payments in order to get twelve payments within the year. My friend pointed out that BOA should give ample notice to credit card customers when they anticipate a future jump-back in due dates.

Oh you will love this . . . My friend, a big blog reader, told the manager. “I see that BOA is getting into hot water over their policies of offering credit cards to those who lack both a Social Security number and a credit history.”

The manager told him that Bank of America is really catching big heat from the Blogosphere about the illegal immigrants, and that they are reading the blogs daily!!!

Good work and Hat Tip to Uncooperative Blogger and Liberally Conservative for keeping the BOA plan for illegal immigrant credit cards on the front burner!

See Also Bank of America Sucks.com ( a forum for the multiple complaints against BOA) and H/T to Freedom Folks


Note: Kenneth D. Lewis is Chairman, Chief executive officer, and President of Bank of America.

As CEO of Bank of America, Lewis leads one of the world's largest
financial institutions, the fifth most profitable company in the world and the
sixth most highly valued company in the world by market capitalization as of
December 31, 2005. Bank of America serves 55 million consumers and business
clients through almost 5,900 retail banking offices in the U.S., corporate
banking offices in 150 countries, almost 17,000 ATMs and the #1 online banking
and bill-paying service in the nation.

Source: http://newsroom.bankofamerica.com/index.php?s=company_bios&item=7

Update November 25, 2007: More banks are pulling the following scam so after reading this article, please read You and Credit Card Due Date Roulette, which explains how you can pay one credit card late and suddenly all of your credit cards make an outrageous jump in interest rates!!! It’s called the Universal Default Clause.