Often when I talk about the unprecedented potential of cryptocurrency (and more specifically Blockchain technology) I speak about the financial freedom it gives you versus the strangle hold that traditional banking has had over most of us since we upgraded from the piggy bank. A life of "banker controlled wealth" is all we have ever known. Recently I had to close my Bank of America account after they froze my funds without any reason given. Unfortunately, banks are still necessary on a daily basis, but if I could go 100% crypto I certainly would do it in a heartbeat. There is nothing worse then the fear of not being able to pay your bills because your bank account has been frozen. Follow The 'Stache as I lay out all the nasty details, why they really froze my account, and how YOU can avoid the same mistake.
Banking with Bank of America
I had been a "BofA" customer since 2008 when I first started my web development business, Long Beach Web Design. I chose Bank of America because, at the time, they were one of the only banks that offered a business account where if you spent a certain amount of money on your debit card they would waive the monthly account fee. While I had a few issues with them over the 10 years as a customer, it was never anything so damaging that I needed to leave (although I got close a few times!). Ultimately, when they released their mobile banking app I couldn't be happier as it meant I did not have to traverse the lines and second-rate customer service I had come to hate at Bank of America. With the mobile app I could just deposit my business checks from the phone and avoid walking into the bank or ATM altogether.
Money Services Monkey Business
I run a pretty low key web development business where I do hosting, build websites, develop e-commerce solutions. This had not changed in the 10 years I was with Bank of America, but on September 18th, 2017 I received a very curious multi-page document in the mail asking me to return 8 pages of information about my business by October 18th, 2017 "to avoid any interruption of service" to my business account.
The document came from the Money Services Business department of Bank of America. I had no idea what a Money Service Business was when I got the notice. The first page of the notice stated:
During a recent review, we found that some of the activites in your business accounts appear to be Money Services Business (MSB) activities. Typical MSB activities include check cashing and issuing or redeeming money orders and/or traveler's checks. You can refer to the enclosed form for more detailed definition of an MSB.
After reading this and the detailed description of an MSB, I certainly didn't engage in anything that would remotely be considered an MSB. Regardless, the notice was pretty clear that if I did not submit 8 pages of very detailed information on just about every aspect of a business that you could inquire about, they "may have to restrict or close accounts that don't have all the required information".
Here is the entire PDF that I scanned and as you can see the information and documents they requested was extensive.
I read through all the requested information, none of which applies even remotely to my business until I got to page 4.
Part 6 - Virtual Currency
This basically stopped me in my tracks...
In comparison to all the other questions and information they were asking this seemed like a square peg in a round hole. It really didn't fit within the context or even within their OWN description of what a Money Services Business was. As you can see, even if you are just a "User" of cryptocurrency, this may qualify you as a Money Services Business. I have only ever made 3 total transfers of fiat to Coinbase from my Bank of America business account. The first was in late 2013 (my first BTC purchase ever), the second two where both earlier this year for $400 and $1000 respectively. I have never sent any funds from Coinbase back to my BofA account to "cash out" as I like to keep my profits in crypto. The fact that I had done this quite a few years ago and never received this notice, but was now receiving it just a month or two after my 2nd and 3rd fiat conversions, was a tale-tell sign that there was some fishy business going on...
Turns out, I was right.
"This Is A New Policy Sir"
Reading the rest of the document I was kind of insulted by the fact that they wanted this massive amount of information from me with the threat of closing my account if I didn't comply by October 18th. I decided to call the provided MSB Customer Service phone number to see if I could get to the bottom of it.
My first interaction was with "Diego", who didn't give me a last name or any sort of reference number (even though I asked). He told me all would be recorded on my file for the next person so there was no issue of our conversation being lost... I told him about the document I received and that I did not engage in any Money Services Business as defined in the very same document. He then preceded to look up my info and after about 10 minutes finally asked me about my Coinbase purchases. He attempted over and over to clarify how and why I was using cryptocurrency and ultimately I asked him why does that even matter as it did not seem to fall in the definition of what a Money Services Business was. After quite some back and forth, where he basically could tell me nothing about WHY any activity in crypto was now considered MSB activity,and I daftly avoided admitting I purchased any crypto, he slipped up...
When I asked him about how Virtual Currency became part of MSB activities he told me very specifically that "This is a new policy sir". As soon as he said this we BOTH knew he basically screwed up and was not supposed to leak that information. Instantly the tension on the phone was palpable and he quickly tired to back peddle on what he said. I pressed on like a honey badger and asked him when this change occurred and why, if a change was made to my account, was I not notified of this change? He had no answers for me. How could Bank of America make such a large change to the terms and conditions of my account without my knowledge? Still no answers, just restating that BofA needed me to comply and send in all this information. Clearly this was no small change as they were threatening to close my account if I did not comply in just 30 days! From this point he would just repeat the same line as I asked him multiple questions about when, where, why, how, and what this was all about.
This is when I asked to speak to his supervisor.
I stayed on the phone with him for over an hour "waiting" for a supervisor to get back to him. No one ever came to help or talk to me. Ultimately, to get rid of me, he gave me the number to the Team Manager in the Compliance, Processing, and Monitoring Department saying that she could answer any questions I had. I hung up with "Diego" and called (602) 464-0077 and got the voice mail for "Lacey" (I believe that is her name as the voicemail message is a bit garbled). I left a voicemail that day with her, but did not hear back before close of business.
The next day I called again.
Voicemail yet again, so I left a second message with all my details. I let that day and another go by with no call back. I called a third time, voicemail again. I left a third voicemail. The fourth time I tried, I wised up and installed a phone call recorder on my phone hoping to finally catch this elusive Team Manger. No such luck. I left yet another voicemail, hoping to convey some urgency as I was trying to comply with their request, but needed a few questions answered. Below is the recorded call of my leaving my fourth voicemail.
Now over 8 days into this journey I had still not gotten a phone call back. I waited another couple of days and then I received the second document from Bank of America.
Winter Is Coming... Early
On October 13th, 2017 I received a 1 page letter from Bank of America saying "Your business accounts listed above have been frozen and will be closed if we don't hear from you within 30 days from the date of this notice".
I WAS FURIOUS!!!
Here is that document in full:
Not only did they freeze my account 5 days sooner then they said they would, they made it seem like they had NEVER HEARD FROM ME! Clearly the almost 2 hours on the phone with Diego and the 4 voicemail's to Lacey in the Compliance, Processing, & Monitoring Department meant absolutely nothing.
At this point I knew that a phone call was pretty pointless so I grabbed both documents and headed down to my local branch to get more information and hopefully just close my account.
The Saga Continues
I got to Bank of America, sat down and waited to be helped. A personal banker by the name of Eddie Perez called me over when he finished up with the client he was already with when I walked in. I told him I wanted to close my account, and grumbled a bit about how I doubt he could even help me at this point. Of course he gave me the generic spiel of how he is here to help if only I would let him. So I complied and gave him my info to look up... mistake # 2.
Apparently even if you work at Bank of America you have to wait on hold to talk to anyone in another division, because I sat there blankly staring at him for almost 20 minutes before he actually talked to another representative on the phone. They went back and forth, then some more waiting for another 20 minutes. He tells me that my account has been frozen and we can't close it.
I ask him "why" it was frozen. He talks more with the person on the other line and waits another 10 minutes or so. After an hour and a half he finally gets off the phone and tells me that Bank of America made a "business decision" to close my account. I asked him what does that even mean? He repeated the exact same phrase. I tried to ask my question in a different way, and was met with the same exact response. It was like "Diego" was standing before me where personal banker Eddie Perez once stood... I told him this was an unacceptable answer and if they could not give me an actual reason as to why my account was frozen then I needed to close my account immediately. He made yet another phone call and then ultimately told me that someone was going to call me about it the next day.
I left even more furious then I walked in.
Personal Banker Number 2
Two days and a weekend go by and I head back into my local branch to confront Eddie about not receiving a phone call. This time he was not there and I ended up with a different associate. He went through the same hoops, also having me wait while he was on hold with his own organization. Ultimately I was told that, when Eddie called last week, they actually "unfroze" my account for one day so it could be closed, but because I did not close it in that 1-day window it was "re-frozen". I told him that Eddie NEVER mentioned this and that he just told me to expect a phone call...
This new guy attempted to get my account un-frozen again. After waiting another 30 or 40 minutes he tells me that they have put it in for processing and if I just come back the next day it should be un-frozen and I can close out my account and get my funds.
I returned the next day right when they opened. This time Eddie was back and I sat down with him and updated him on the situation. I straight out asked him why he lied to me. He didn't have an answer for me. I told him that his own organization was making him a liar. Still no answer for me. He once again made phone calls while I sat there waiting with steam venting out of my ears and nostrils. Turns out that no, the account was STILL frozen and he could do nothing to help. I demanded to talk to a manger. After waiting another 15 minutes for the manager to come out she talks to me and gives me a sticky note with a phone number to call. She said that the analysts would be available at 2pm for me to discuss my account and they should be able to tell me why it was frozen and how I can un-freeze it to get my funds. I reluctantly took the sticky note and left to wait at my house to make the phone call.
Please Call Back During Business Hours
At 2:01 I called the number I was given only to get a recorded message saying that they were CLOSED for the day! I could not believe the incompetency! I rushed right back to down my Bank of America branch and went up to the same manger, telling her that they were close already at the time she had me call and this was being to seem like a very bad joke.
She took the sticky note from me and preceded to call the number herself, only to find out exactly what I did. That they were closed. She said that it must be new office hours that she did not know about... I waited for another 30 minutes while she made phone calls and ultimately she came back to me telling me that YET AGAIN they would un-freeze my account the next day and to come back. At this point, I still have no reason why my account was frozen in the first place. I tried very hard to comply with their request, short of giving them 8 pages of unnecessary information (most of which I couldn't even give because 95% of it didn't apply to my business), only to be told multiple times that "Bank of America made a business decision to freeze your account" and that is it.
The Last Straw
I came back first thing in the morning the next day (my 5th trip there in 2 weeks) and headed straight to the manger. Sure enough, my account was finally un-frozen!!! I instructed them to cash me out and close my account. I realized after the fact that I didn't even recall one apology for all the inconvenience. All totaled I spent well over 10 hours across 3 weeks trying to resolve this issue only to be roadblocked, ignored, lied to, lied to again, and placated with a "pass-the-buck" mentality as I tried to get a solid answer from over half a dozen individuals from Bank of America.
All of this because I sent a small amount of funds from my business bank account to Coinbase. All of this because they made a policy change to business banking accounts to include cryptocurrency as a Money Services Business without notifying customers. They used this to try to strong arm me into admitting I was purchasing cryptocurrency so they could some how classify it as a Money Services Business. I was utterly disgusted by the way I was treated and the lack of accountability, professionalism, and adherence to US law.
- Only trust a bank as far as you can throw them.
- Financial laws mean absolutely nothing to a large bank like Bank of America
- Don't purchase Bitcoin or Cryptocurrency with a Bank of America account (business or personal)
- Always have a phone recorder app active when you make important calls regarding money
- It takes 5 bankers to unscrew a frozen account (there's a good joke in there somewhere!)
- Lacey from the Compliance, Processing, & Monitoring Department will never call you back no matter how many voicemail's you leave.
I have now moved all my business banking to Farmers & Merchants bank and am very happy (so far). I decided to do all my crypto purchases from my local credit union account instead. If you have a Bank of America account I highly advise you to look else where if you are interested in cryptocurrencies. Bank of America is NOT cryptocurrency friendly it seems. This very true tale is yet another reason added to the plethora of reasons why institutionalized banking needs to be on it's way out. Let the nightmare I went through be a lesson to all!
Still waiting for that call Lacey!