Asbury Park Press

TD Bank Snafu Illustrates Lesson

Consumers can't stop paying attention

Asbury Park Press — Friday, October 2, 2009


TD Bank customers this week have learned that just because more financial transactions are taking place online doesn't mean they can stop paying attention.

Instead, they should contact their creditors to ensure their bills were paid on time. And, if a creditor says they are late, they should check their credit reports at Consumers are allowed at least one free annual credit report from each of the three major credit-reporting agencies — Equifax, Experian and TransUnion.

"This is a perfect example of why" bank customers need to stay on their toes, said Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, a consumer group.

TD Bank officials Friday said they have yet to pinpoint what is causing a glitch that has delayed how quickly transactions get processed and has left customers unclear how much money they have available to spend.

The problem began last weekend, when workers integrated TD Bank's computer system with the computer system of Commerce Bancorp, the Cherry Hill-based bank it acquired last year for $8.5 billion.

The problem has been keenly felt at the Shore, where TD Bank is the second-biggest in terms of deposits. Peggy Belenets of Keyport stopped at the Tinton Falls branch on her way home from work Friday afternoon to check her balance.

"I don't know how much money I have in there," she said. "I call the 800 number and they say, "Please be patient.' I had to come all the way to the bank to find out what's in it.

"Bitter taste in my mouth for this one," she said.

David Flaherty, a TD Bank spokesman, said transactions that normally would have been processed overnight instead were processed by about 2 p.m. Thursday. He said the money was available for customers, but the transactions weren't being reported in real time.

"They just don't know what the balance is," Flaherty said.

The company has said the bank would cover any penalties consumers are forced to pay because of the disruption. And Flaherty said consumers shouldn't worry about negative marks on their credit scores since creditors likely wouldn't report a late payment for 30 days.

The confusion is a cautionary tale. Four in 10 Americans use the Internet for banking, according to a 2008 study by the Pew Research Center, up from 27 percent in 2005.

The benefits are obvious. Money is deposited and withdrawn from consumers' accounts on a strict schedule. Bills get paid on time. The account is balanced without mistakes.

But there are risks as well. Namely, what happens if the computer goes down? It remains wise, if a bit old-fashioned, to continue to record your transactions by hand. And it is wise to call creditors to ensure the transaction has been completed as scheduled, Salowe-Kaye said.

"Knowing there's (a potential) for problems, you have to keep track of this," she said.

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