Wait. What? (My bank is retarded edition)

I didn’t want to make a formal “Things That Bug Me” post on today’s topic, because in general I am very very very pleased. But after an episode this morning, I have to at least post something.

So, I’d like to talk about my bank. Doesn’t matter what the name of my bank is, I’m sure you’ve all dealt with a situation of your bank being challenged, regardless of where you handle your finances. The reason I’m not putting my bank on the list of things that bug me, is because they generally don’t. Today’s occurrences were either the work of one idiot person, or one idiot policy [which I guess is from one idiot person who ok’d it]. But either way, hilarity.

Background story: Ok, Mrs. HokieJayBee and I have a son. He’s 2 and a half now. We managed to do something right for a change, something mature and proper, and we started him an ESA when he was like 6 months old. [Education Savings Account] We put a monthly stipend into the account for him and hopefully it will grow to help us pay for his college in 16 years. It’s not a lot, but with 18 years to work with the interest compiling, we hope we’ll be ok. We ask relatives to chip in when they can, like on his birthday and Christmas. It’s all turning out to be a pretty boring story thus far.

The current story started this weekend, where I got a letter from our bank. It seems to be a standard form print letter, not written just for our case – but it’s still pretty threatening and ridiculously harsh. The basis is this. The ESA we have for lil’ HokieJayBee is essentially, at least to the banking world and the IRS, a modified IRA account. Which has special tax laws, or lack of taxes due, on the earned dividends in a formal ESA account. The letter is essentially stating that we are in default of an IRA account and owe 28% taxes and a possible $5,000 fine if we don’t properly file the account holder’s Social Security Number and/or Tax ID to the IRS and claim these dividends properly. Do what?

First sign for me that someone is not doing their due diligence to research what the hell they’re talking about in these threatening letters, it opened with:

“Dear [my son’s name]; [BANK NAME X] has made several attempts to contact you, the account holder, in regards to a missing Social Security Number/Tax Identification Number (SSN/TIN) associated with your IRA/ESA account #XXXXXXXXXX. Without this information…..”. So, first, I ask. Please define “several attempts to contact the account holder”.

He’s……………2. Did you try and call him? Did you call his cell phone or his work phone? I know he sometimes turns his cell off at the sitter’s as to not disturb the other children during nap time. And if you left him a voice mail, he is horrible at checking those. I’m always emptying his voice mail box for him. And after he ran up a large bill recently, we cut off his texting privileges, so if you tried to reach him that way, it might not have gone through. ……….Several attempts to contact the account holder……..my 2 year old son.

So, even if you want to defend the letter, and they meant me, the parent as the account holder, I can say that no they haven’t tried once to contact us regarding the IRA/ESA account, or his SSN. And, and, and…..we started this account at the end of 2007. And there would have already been two tax year events (January 1, 2008 and January 1, 2009) which would have required his “missing” SSN. So last year and back into 2007 and 2008, everything was fine with the account and the SSN and the IRS. Only now, the third year we’re hitting a tax year event (January 1, 2010) is there a problem?

Now normally I guess I’d just call the bank and try and politely decipher the problem with them. But this letter was all but rude. It’s very threatening and negative, and frankly I wasn’t in the mood to be spoken to in this manner or threatened over an issue at which I am not at fault. Especially the part about the fine being for a FELONY for perjury for avoiding/lying/misleading the IRS in regards to withholdings of dividends for my son’s account.

How am I so sure I am not at fault? Other than the vault of a near-photographic memory I am lucky enough to possess?

Because when he was about 6 months old, near the end of 2007…………is when I had to go get his SSN set up and get his SSN card,…………….SO THAT WE COULD OPEN THIS ACCOUNT. Because you can’t open the kind of IRA/ESA we did,………………WITHOUT A SSN OR TIN. Yeah. That’s why I was a little put off by the tone of this letter. Humor notes aside about them making several attempts to contact my 2 year old son.

So. To open this account, we had to get his SSN and card, or we couldn’t open the account. We filled out all forms and paperwork in a branch, in person. We survived two tax year events already without incident. And now suddenly there’s an issue with his SSN, his account, the withholdings, the IRS, and now threats of fines and felonies?

Ok, let’s duel. Standard letter mailing or not – you don’t just mail crap like this to your members without researching the problem.

So I call the bank this morning. Surprisingly only on hold for like 3 minutes after navigating the fancy menu, and I even got straight to the correct department. Hooray me, pressing 1 for English!

I get a very polite young lady, entirely too chipper for a Monday morning, and politely apologize in advance for my tone and demeanor, but I’m unimpressed with the handling of the issue thus far and frankly a little angry at the tone and threats in the letter. You all can imagine the next 5 minutes of the call as I explain to her everything I did for you above, about them ‘trying to contact’ my 2 year old, about how we already successfully navigated two January 1's without issue, about how I couldn’t start the account without the SSN, etc.

After some wrangling, she put me on hold to discuss the situation with her supervisor and came back with some lame excuse about department A not talking to department B within the bank and department B reports to the IRS and needed to get the information from department A and they must not have it from me and I need to go into a branch with my son (they need to visually confirm his existence?!?!?!?!?!) and fill out the paperwork to start an IRA/ESA, and then department A will forward it to department B and department B will forward to the IRS and I “shouldn’t” (her words) have a problem or be fined, and all future dividend earnings will not be withheld like the previous ones were being withheld.

Wait. What? Back up ma’am.
[1] Your two internal departments can’t talk properly, so that’s why I got a threatening letter and such?
[2] I have to go to a branch and bring my son to prove I have a minor so that I can open an account like this?
[3] I have to fill out the paperwork AGAIN to "start" an IRA/ESA?
[4] I “SHOULDN’T” have a problem or be fined????
[5] And all FUTURE dividend earnings will not be withheld like the previous ones were? You’ve been withholding my son’s account’s dividend earnings?

“Well yes sir, since your son’s account did not have proper SSN/TIN identification to be qualified for the tax-free IRA/ESA rules.”

“Yes it did.”

“No it didn’t, or you wouldn’t have gotten this letter.”

“Ma’am. Please define for me the process with which was required for me to start this account for my son.”

“Well, as I described for you now, you would have had to go to a branch in person, with your son, and present his SSN/TID card, and make an initial deposit.”

“So I couldn’t have started this account for my son had I not completed that task?”

[long pause]
[like, I didn’t talk. I was letting it settle in.]
[at this point I think I literally saw the lightbulb come on through the phone.]

“One second sir, let me speak with my supervisor again.”

[3 minutes]

“Please destroy the letter sir. We will notify the IRS of the situation and correctly file your son’s SSN with them for 2009 and all future year’s dividends. We will rectify any previously withheld taxes on the dividends earned and you will not be subjected to any future withholdings. You are also not at risk for any fines or felony charges. I do apologize for any inconvenience. Is there anything else I can help you with today?”

[click]