That Time I Got into a Fight with Ally Bank

I’m not in the habit of getting into knock-down drag-out fights with my financial institutions. I prefer to reserve my WWE style skirmishes for cell phone and internet providers.

But every once in a while, a bank will do something so egregious that I cannot help but screw my teacher voice to the sticking place and make some very stern phone calls. And that’s what happened two weeks ago, when Ally Bank decided to mess with the wrong financial expert.

Pictured: Someone not to mess with

Here’s how I went from blandly approving of the bank holding my online savings accounts to ready to burn it to the ground in the space of a couple of days:

The Background: Targeted Savings

One of the most complex-but-reassuring money tasks I engage in is targeted savings. This means I set aside a specific amount of money each month into a savings account named for its purpose.

For instance, each month, we automatically send $350 from our checking account to a savings account entitled “New Car.” This works like a kind of reverse car payment, so that the account will have enough to either pay for or put a major down payment on a car the next time we need to purchase one. (We also use the New Car fund to pay for any expensive repairs we might need to take care of on our current cars).

Because I don’t do anything by halves, I maintain nearly 25 targeted savings accounts into which I have automatic transfers deposited monthly. Each account represents an expense that does not occur monthly. The point of these targeted savings accounts is to have the money already set aside when the expense occurs. My targeted accounts include the following:

· Emergency Fund

· Home Repair/Improvement

· Vacation

· New Car

· Synagogue Dues

· The Boys’ Bar Mitzvahs

· New Computer

· Property Taxes

· My Dream Trip to Hawaii

· Husband’s Midlife Crisis Motorcycle

· New Furniture

· Eyeglasses

· Summer Camp

· Auto/Homeowners Insurance

· Bathroom Remodel

While this may seem like overkill (because it probably is), this kind of set up works well for me. Having our money earmarked for its specific purpose means I’m not tempted to spend the property tax money on a vacation, nor do I have to wonder if I have enough money set aside in a giant slush fund to handle all of our expected expenses.

I’ve been doing this kind of targeted savings for a long time—since 2004. My original online savings was set up with ING Direct, which became Capital One 360 about 8 years ago.

And last August, prompted by promises of higher interest rates, I decided to move all my money to Ally Bank’s online savings accounts—a decision I now regret.

Switching to Ally

I’ve been aware of Ally Bank for many years now. They are a regular sponsor of the financial conference I attend each year, and they are well-known among FinCon attendees for giving away white-chocolate covered Oreos, emblazoned with their logo, at every conference. So, I had a pretty positive impression of Ally for quite some time, since such delicious treats are a decent way to my heart.

Well this catchphrase feels awkward right now...

So, with dreams of higher returns on my savings accounts dancing in my head, I started the arduous process of opening Ally accounts, transferring the money over from Capital One 360, cancelling the automatic transfers to Capital One, and setting them up with Ally.

This took a lot more work than I anticipated. While switching banks is never a giant bowl of cherry Jell-O, I was surprised at how much time this took.

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I had to make phone calls to Ally to make sure I could open all the accounts I wanted. (They claimed you could open unlimited accounts, but after opening 5 in a row, Ally started requiring me to call. Which, okay, isn’t that unreasonable. I mean, who other than me needs and opens 24 different savings accounts all at once? But it still added to the work I needed to do to switch to Ally).

Sadly, as I was in the midst of switching, Ally lowered its rates.

Cue sad trombone.

The lowered rates were still better than what I was getting at Capital One, but it was below the threshold I needed to feel good about doing the work to switch. Ah, well. All’s fair in love and interest rates, right?

Trouble in High Interest Paradise

Despite that lowered rate, I was initially happy with Ally Bank. The accounts earned interest in satisfying ways. The automatic transfers occurred without a hitch…

Well, not quite.

Ally, unlike every other bank I have worked with, asked me to set the date I would like an automatic transfer to arrive in my Ally account, rather than set the date I would like the money to be debited from my external account. Since I want automated transfers to be debited on the Friday my husband’s paycheck arrives in our checking account, I had to set the transfer date as the following Tuesday to get the debit date I wanted.

I thought this was kind of weird, but didn’t worry overmuch about it. Money danced from our checking account into our Ally accounts per my automatic transfer preferences, and I enjoyed the feeling of my finances being a well-oiled machine.

Yes, there were a couple of instances of the money being debited on Thursday instead of Friday because of an oddly-timed bank holiday, but we always had enough of a buffer in our checking account, so it didn’t matter. It wasn’t my preference, but things were working out fine.

Until October 8, 2020.

The Day That Will Live in Infamy

On Thursday October 8, I logged into our banking accounts to discover that our checking account was overdrawn by over $1,500. Ally had debited all of our scheduled automatic transfers on Thursday instead of Friday. Unlike previous early transfers, I could not make heads nor tails of why the money was gone before I expected it to be.

(What’s additionally infuriating is that it wasn’t yet in the Ally account. It was just yeeted out of existence for several days, which may be normal procedure, but it felt especially galling when it meant my checking account was overdrawn).

I called the customer service line and was informed by a condescending representative that the transfer was initiated early because of the federal holiday falling on Monday October 12, which I had completely forgotten about because it did not affect either school schedules or my husband’s corporate schedule, and because it’s a holiday that needs to be forgotten since it is named for someone who is in the Bad Place.

I explained that initiating an automatic transfer a day early in response to an upcoming bank holiday makes no sense whatsoever. Condescending Representative informed me that Ally believes its customers need the money to appear in their Ally accounts on a specific day in order to pay their bills, so this policy allows that to happen. When I pointed out that this may be the case if money is being transferred to a checking or money market account, it’s a ludicrous claim for savings accounts, since you are limited to 6 withdrawals from an online savings account per month. NO ONE is paying bills out of a savings account—and who needs money to appear in their savings account on a specific day?

When I asked Condescending Representative what Ally could do to make this overdraft right, she informed me that I could change my automatic transaction schedule. I reiterated that I wanted ALLY to do something (like an ally) to make up for the fact that their policy had caused my account to be overdrawn.

I was pretty heated at this point and mentioned to Condescending Representative that she did not need to talk down to me, as I was a personal finance expert and the author of four books. She responded by saying, “While that is very impressive, I think you have a fundamental misunderstanding of how this process works.”

You may have heard the sound of the fireball coming out of the top of my head, if you were wondering what that FOOOM was that you heard coming from the direction of the Midwest around 10am CT on Thursday morning.

That’s when I successfully requested a transfer to Condescending Representative’s supervisor. (Yes, I pulled that card). The supervisor was a gentleman named Ben who seemed to understand my concern. I requested that Ally reimburse me for any overdraft fees I am charged—a suggestion he demurred. He invited me to send a screenshot of any fees I ended up being charged as a result of this, and Ally might possibly think about maybe perhaps sorta reimbursing me maybe.

Lest We Forget the Emails

While I was on the phone with Condescending Representative, I quickly opened my email account that is associated with my Ally account. Ally helpfully sends me a separate email alerting me of an impending automatic transfer every time one is initiated. Since I have 24 accounts and have transfers occurring at least every two weeks (not counting other transfers that come from my separate checking account and any manual transfers I make to pay for the targeted expenses I’m saving for), I don’t necessarily look these emails over with the level of examinatory vim one reserves for legal documents with the Devil.