Before I get to today's post, I want to invite all my readers to come back tomorrow when I'll be talking about a new hack that I've been exploring – because I need your help. Normally I only post about a new technique once I've had a chance to explore all the nuances and share my findings, but this one is a little bit different and I think it'll benefit from as much reader feedback as possible. And yes, it is going to upset some people that I'm writing about it publicly, so if nothing else you should come back to check out the fireworks in comments.
With that out of the way, on to today's news. When I got back from Wisconsin last night I found a letter from The Bancorp Bank in response to my FDIC complaint about my second frozen MyVanilla Debit Card account (the one with all the money in it). Then this morning I received another letter from the Federal Deposit Insurance Corporation, Bancorp's main federal regulator. I thought I'd share the details of those responses with my readers.
There were several interesting sections in the Bancorp letter. First, the explanation of the initial account blockage on November 21:
Your account was blocked on November 21, 2013 due to activity that was considered suspicious. The account received several loads which mimic a fraudulent transaction pattern that InComm, the program manager, sees on a day-to-day basis during phone scams.
Presumably the phone scams they're talking about are when you're asked to buy a reload card and send in the PIN number in order to receive a prize.
Next, there was an explanation for the runaround I was given:
All of the requested information was received and on December 2, 2013 the card was reopened. We appreciate you sending in the requested information in such a timely matter [sic]. The turnaround time to review submitted documents is anywhere from 24-72 hours. In this case the documents you submitted were sent to the wrong folder which resulted in a delay in reopening the account. The documents were reviewed on December 2, 2013 and the account was reopened.
Then some commentary on their federal banking supervision:
Please understand that our ultimate goal is to protect the security of your account. We are obligated by federal banking regulations to follow a process known as the Customer Identification Program (CIP). The CIP regulations make it mandatory for a bank to take the proper steps to confirm the identity of its customers. The CIP process is necessarily stricter with accounts that are opened via the internet. While we must always comply with all banking regulations, we make every attempt to do so with as little impact to you as possible. We appreciate your patience and understanding while we assisted you with your concern.
Finally a little customer service boilerplate:
This issue has since been discussed with the customer service department to ensure the review requests and escalations are being sent to the correct individuals. We apologize for any inconvenience you experienced. We truly regret the delay that was caused by the mishandling of your request.
In other words, they seem to be saying there were two separate issues:
- Possibility of me being a phone scammer, getting Vanilla Reload PINs from unsuspecting victims and quickly loading and unloading the value;
- And federal banking regulations which require them to conduct identity verification for accounts opened over the internet.
That being the case, it's still impossible to say what "directly" led to my account being frozen.
The FDIC's Response
Besides including a copy of Bancorp's response, the FDIC also expanded a little on the regulations Bancorp was claiming to be following:
The USA Patriot Act rules require each financial institution to adopt a Customer Identification Program (CIP) to ensure the bank has a reasonable belief that it knows each customer's identity. That is why financial institutions engage in more rigorous customer identification procedures when opening new accounts, especially for accounts opened over the Internet. The FDIC and other regulatory agencies encourage banks to use the basic principles set forth in the rule (31 C.F.R Chapter X), which includes obtaining customer information, such as a name, date of birth, address, and for U.S. residents, a tax payer identification number. In addition, banks must verify the identity of customers, through the review of documents or through non-documentary methods, such as information obtained from consumer reporting agencies or checking references. The bank's CIP must also provide customers with adequate notice that the bank is requesting information to verify their identity.
So there you go. I don't think it will necessarily help keep anyone from being shut down, but it's good to know that if you file a complaint with the FDIC, they will listen and respond in a more or less timely manner. Your tax dollars at work!