No Coincidences

21 04 2008

By Jill Ettinger

“Banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power (of money) should be taken away from the banks and restored to the people to whom it properly belongs.” – Thomas Jefferson

While on a trip to France last week, both of us at InnerContinental found our Bank of America Visa/debit cards unusable due to their new “fraud protection” program. This had me quite curious as my spending amounted to a total cash withdrawal of about $350 (200 euros), and a one-night hotel stay in Bourges, roughly $150. This does not strike me as an outrageous or suspicious spending spree, especially when you consider the strength of the Euro right now.

Even more interesting is that the “fraud block” came after our very first use, which was at an ATM machine in the airport when we arrived on Wednesday morning. It seems a smart thief would have 1) taken out more than a few hundred euros, and 2) tried their luck several more times. And an even (theoretically) smarter bank would have only had to look at recent purchases on the same account of France rail tickets, hotel reservations, plane tickets, etc.

When I called my bank this morning, I was notified that this consumer fraud protection is a new system that rolled out earlier this year designed to protect me. (Aw shucks Bank of America, thanks so much, but are you sure that it’s just about protecting me and not the insurance rate increases you have to pay when fraud actually happens?) I was advised to “alert the bank of my travel plans ahead of time” so as to avoid any suspicion about where I use my card causing them to turn it off, “It’s much better than being embarrassed when you try to make a purchase and your card won’t work,” the girl politely reassured me.

All of a sudden, I felt like I swallowed a bulky bank fee. Advise my bank of my travel plans? I told the script reader on the other end of the phone that my travel plans were frequent, sometimes last minute and often open to change. It’s hard enough for me to alert family and friends of my location, but now I have to add my bank to the list?

A few years ago, I got rid of all my credit cards. The system struck me as a complete scam: interest rates change without notice, and often paying monthly minimums only guarantees prolonged interest payment to these corporate bullies. The few extra frequent flyer miles seemed hardly worth the frustration. So I rely only on cash, even though it may be virtual – tucked in a bank account I’ve had for close to a decade – I spend only what I know I can afford. So having my access to money halted because the bank thinks it’s suspicious for me to leave my house is incredibly disturbing. I probed the operator about this program, and she let me know that “most banks” have implemented this security measure. Which basically means that even if I did have a credit card in addition to my bank card, I would run into the same problem if I don’t alert them to my travel plans. [ed note: I’ve asked a few of my friends about this “security measure” since we returned, and nobody has heard of such a thing. Also, my credit card DID get turned off, in addition to my debit card. DB]

I told the operator that I had a number of travel plans coming up and could she please put some sort of “frequent traveler” label on my account. (Which in theory should have happened automatically with this system installation, if they looked at my previous transactions coming from all over the country quite regularly.) She assured me there is no such designation for bank customers and the most she could do was to enter in some upcoming travel dates for me, which the system will only allow for a month at a time. I struggled to grasp this as I complied and hurried to end the call.

Seeking distraction, I surfed over to the NY Times only to find this article on the front page outlining Bank of America’s drastic drop in profits: “Bank of America’s global consumer and small business unit, its core source of revenue, reported net income of $1.09 billion, a 59 percent drop from last year. The firm said that the unit’s credit loss provisions had swollen to $6.45 billion for the first quarter, up significantly from $2.4 billion last year, tied directly to weakness in the housing markets and the general economic slump.”

So let me see if I understand this correctly. Bank of America is losing money. Lots of it. And largely in part to the state of our sluggish economy and their answer is to make it more difficult for their consumers to spend money? Clearly I am not an accountant, but something seems overwhelmingly strange about this.

It’s of no concern to me if my bank likes to know where I am. It’s obviously easy for them to track my location from day to day. But being denied access to my funds for not telling them of my travel plans ahead of time has taken our relationship to an uncomfortable new level. This is a homeland security tactic that is only going to increase interest rates, bank fees, frustrations and our country’s favorite modus operandi: Fear.

Suddenly, Europe just got a lot more appealing than as an occasional vacation destination.

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