For a few years now, I've been using Bank of America's online bill pay to pay most of my monthly bills. Before last month, when I paid a bill, the money was taken out of my account right then, and a payment was sent to the payee. That payment, whether it was an electronic transfer or a check issued by the bank, was guaranteed funds. No worries.
Now, instead of taking the money out of the account right then, BofA leaves it in the account until the payee cashes the check. Essentially, they now write the payee a personal check from my account, and the funds stay there for 4-7 days (it takes 4 days for BofA to deliver the payment, and usually a few more days for the payee to process the payment--it took a week for my last utility bill payment to leave my account from the day I made the payment online).
Why on earth would I want that money to stay in my account for an extra week? I'm not earning interest from my checking balance, and the money is already committed to the bill I've paid. All this change does is drastically increase the chances that my account will be overdrawn.
BofA has destroyed any incentive to use their online bill pay system, and with it, online banking. I might as well pay my bills with personal checks, since that's all BofA is doing now. At least if I write the checks myself, I'll have my hand-written register to tell me what funds are available to me. I can't count on my online balance any more, since Bill Pay doesn't remind me what bill payments are still pending. (Even after I commit to making an online bill payment, the debit isn't listed on my main account page along with other "pending transactions." Think about that--if you were banking normally and writing personal checks, would you wait until the checks cleared to record that transaction in your checkbook register? That's what BofA is doing now.)
What galls me the most about all of this is BofA is touting these ruinous changes as big improvements--"Bill Pay just got better" they say, over and over again. "Even better, funds can stay in your account longer-since your money remains in your account until the payee receives the payment."
How is this "better?" I suppose if you pay bills from your interest-bearing savings account, the extra week those funds sit there can earn you .0013¢. But really, this is better for Bank of America, since they're far more likely to reap more overdraft charges, now that your online balance is meaningless if you use online Bill Pay.
I'm switching to BB&T as soon as I can. Good riddance to Bank of America.
I have been using online bill pay for years now. It has really helped me in my journey to become debt free. I am nearly there, so check out my progress below.
Slave To the Lender Blog
http://slavetothelender.blogspot.com
Posted by: Freedom | February 08, 2006 at 08:27 AM
Excellent blog! Thanks for stopping by. I agree that online bill pay is a great tool for consumers struggling to overcome their debts. Unfortunately, the changes BofA made to their online bill pay service last month have turned it into more of a liability. I'm going to find a bank that does online bill pay right and move my accounts there.
Posted by: Jeff Michael | February 08, 2006 at 01:26 PM
Here is the text I just sent Bank of America. I am really upset about this change. If someone finds a better banking solution, I'd like to know about it. -----
The new bill pay features just implemented are a great inconvenience. I used to be able to use the online account register as an up to date and accurate reflections of the transactions I had initiated. Everything was integrated in one place. Since now some checks will not post until cashed, I cannot depend on the balances on your site. I am in the process of converting all my banking transactions to QuickBooks so bills paid through online banking will automatically post to a check register within Quickbooks. On your sight, there is no way to easily view a group of pmts to see which ones are still "open" and not posted to the bank account. One has to click each one individually. I feel like we’ve taken leaps and bounds backwards in this electronic age. Additionally, the timing of such a change during tax season is incredibly short sighted and troublesome.
Posted by: Betty Beckham | February 16, 2006 at 07:02 PM
This is incerdible! Bank of America has done it again! Issues like this can lead to troubled credit problems as well. I have found this site to be helpful in clearing those issues http://www.brokencredit.com
Posted by: PJP99 | March 04, 2006 at 01:04 PM
I couldn't agree more. See my blog:
http://thecanes.blogspot.com/
Same exact conclusion as you (I just posted today). Let's do something about it (write a letter)!
Posted by: Dave | March 25, 2006 at 04:09 PM
I am so glad to see I am not the only one who is heart broken about this change- what is BOA thinking? I have been with them sine 1985-But I think its time to move on.
Posted by: chip | April 24, 2006 at 05:11 AM
I am feeling the same way as you. I don't understand it. When I spoke to BofA today they said they made those changes because other people were complaining about the old way. I incured about $350 in overdraft fees this month all on the same day because I thought the money was swept out of my account and it wasn't. The money was still sitting there and I transferred it to a savings account.
I just opened up new accounts at Wells Fargo. They have assured me that the funds will be withdrawn from my account on the day after my scheduled delivery date. I hope they aren't full of it.
Posted by: trish | October 15, 2007 at 02:34 PM