Chase will keep taking your money after your account is closed

Earlier this month I paid off a car loan I had through Chase. You may remember that I’ve had a few problems with Chase before, so I was happy to finally be finished with them. Unfortunately Chase was not finished with me.

According to Chase’s website, my loan was paid off in full on July 6th and the account was closed on the 8th. On July 9th, I received a letter from Chase notifying me that the account had been “fully satisfied”, along with a small overpayment refund check.

On July 21st, 13 days after my account was supposedly closed and 12 days after Chase had informed me in writing that the loan was fully satisfied, Chase withdrew a payment of $687.10 from my checking account (which is at another bank).

I noticed the withdrawal late Thursday night and immediately filed a transfer inquiry via Chase’s website telling them to refund the erroneous charge. Friday morning I received a response saying that the payment was not erroneous and had been submitted according to my instructions. I was told to call a 1-800 number to request a refund.

I called the number immediately, waded through the usual onerous phone menus, and eventually reached an operator only to discover that I had been given the number for Chase’s mortgage division, not the auto finance division. The operator gave me another number, which turned out to be the credit card division. Finally, after realizing Chase couldn’t be trusted even to get their own phone numbers right, I found the correct number on the website and reached a human being.

It was clear as soon as I explained the situation that this was not an uncommon occurrence. The representative I spoke to told me that Chase had withdrawn the payment because I had not deactivated my automatic loan payments after paying off the loan. I pointed out that the automatic payment authorization I had given authorized Chase to withdraw payments “for the life of the loan”, and that since I had paid off the loan and Chase had informed me the account was closed, I expected the “life of the loan” to be complete. I’ve paid off three other auto loans through various banks over the years, and this has always been the case.

She countered that Chase’s interpretation of “for the life of the loan” is actually “for the original terms of the loan”. Since it was a 72-month loan and I had paid it off in 13 months, Chase would continue withdrawing payments for the full 72 months unless I manually canceled the automatic payments.

“So, if you keep deducting money from a customer’s account when there’s nothing for that money to actually pay for, where does the money go?” I asked her.

“It goes into a holding account until the customer calls and asks for a refund,” she replied.

I pointed out that that’s exactly what I was doing, and she said that I needed to fax an explanation and a copy of my bank statement showing the withdrawal to Chase’s research department, which would “investigate my claim”.

“I’m not making a claim,” I told her. “I’m telling you to return the money that you stole from my bank account without authorization. That’s a fact, not a claim.”

She launched into another scripted explanation of the meaning of “for the life of the loan” and how it’s the customer’s responsibility to cancel the automatic payments.

“So you’re saying that because Chase is too cheap to develop working software, it’s Chase’s policy to hold customers’ money hostage until the customer proves, to Chase’s satisfaction, that their money is rightfully theirs?”

“No, you just need to call and ask for a refund.”

“I just did that and you told me I have to file a ‘claim’ with the research department so that they can ‘investigate’.”


I gave up on the conversation, got the fax number for the research department, faxed them the required information, and have naturally heard nothing back. My money remains in limbo and, according to the woman I spoke to, may remain in limbo for seven business days before the research department concludes their “investigation”, if in fact they even received my fax in the first place.

If I don’t hear from Chase within the promised seven business days, I plan to contact my bank and dispute the withdrawal as fraudulent.

Update (2009-08-05): Chase says the check's in the mail.