A man by the name of Richard Palmer died at the age of 78. Like many Americans, Palmer owned a Bank of America checking account. Upon his death, his surviving family members attempted to close the checking account on July 6. However, his surviving family members were unsuccessful, and a month later the account was re-opened as a “zombie checking account” and still remains open to this day. His son and mother were unaware at first and were surprised to learn that their late-family member’s account was still open. The family members learned that payday lenders were making withdrawals from Mr. Palmer’s account. In this case, the lenders were withdrawing hundreds of dollars from his account each month to settle his outstanding loan debts. The problem is that these withdrawals can cause legal problems for his surviving spouse, including overdraft penalties and other types financial liability. The account was finally closed when a bank representative attempted to withdraw a ridiculous amount of money ($888,888.88) to trigger a fraud alert leaving the account in limbo.
The main problem here is that this was not an accident. Bank of America has a policy that keeps checking accounts open or reopens the accounts if automatic bills or deposits are sent to the bank. This policy makes it more difficult to close a deceased loved one’s account than ever before. This could become a problem for the executor of an estate whose job it is to settle the debts of the estate.
See Catherine New, Zombie Bank Account: $888,888 Withdrawn From Dead Man Richard Palmer’s Account, Huffington Post, Aug. 23, 2012.
Special Thanks to Brittany Taylor (Candidate for J.D and M.S. in Financial Planning, 2013, Texas Tech University School of Law) for bringing this article to my attention.
