Phantom Bank Regulations

Question

I was power of attorney for my mothers account. I closed the account at the time of her passing away and received a cashiers check for the balance. A credit came in for 42.00 and the bank reopened the account. Immediately after the account was reopened, Medicare tried to deduct their premium. Now they have taken the balance of the account and created a 132 dollar NSF and the associated fees. I was told by the Bank that even if the account had not been active at the time of the Medicare debit, it would have been re-opened. I was told this was a Banking Regulation. I asked, as you suggested for a citation of the regulation. The person I was talking to not only could not answer the question, but could not tell me where the regulation originated. So, what the heck is going on here?

user27684 · Answer

First, I'm not surprised the customer service representatives you were speaking to couldn't cite the regulation. They're not the bank's lawyers. The bank's lawyers, working with upper management, will dictate these policies, and everyone in the bank will follow them because the lawyers say that's what's required. (I don't have specific experience in the banking industry, but that's basically how it worked when I was a federal contractor. We had a bunch of legal requirements, but no one "on the ground" in the company knew where they came from other than "corporate handbook says so.")

I can't personally speak to regulations about re-opening bank accounts in response to debits, but I do see a potential source of your troubles. You say you had power of attorney, and used that power to close the bank account after your mother died. As far as the bank is concerned, then, your mother is still alive and simply closed her account. It sounds like maybe medicare doesn't know she's dead, either. What you need to do is inform that bank that your mother died, and go through their process for resolving the matter. This will involve at least providing a death certificate.

Phantom Bank Regulations

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