Kudos to ING Direct

Many Americans are quick to criticize banks for their never-ending fees and spotty customer service. The larger the bank, typically the more greedy and uncaring we assume that bank will be. This month one bank has shown us that greed is not good and that banks can be charitable. ING Direct has launched a program to voluntarily alert customers who are in danger of having their funds turned over to the state. Abandoned funds as they are called are sometimes a result of consumers who set up deposit accounts for their children or move residences and then lose track of the account. Abandoned funds can also be uncashed checks issued by the banks. Banks are not required to go find the new address or contact person on a bank accounts when account information changes, instead the banks turn over to state government the unclaimed funds after a set period of time. Most banks do this process with little or no communication to the accountholder, but ING Direct has committed to going the extra step to find the rightful owner before the funds are swallowed up by the state.

from the ING Direct press release:

“States require financial institutions to file “unclaimed property” in the Fall and Spring each year. ING DIRECT is currently notifying thousands of Americans that their savings may be in jeopardy via email, phone and snail mail. Earlier this year, ING DIRECT helped nearly 40,000 customers who were in danger of having funds escheated to their state get their money back through a careful and effective new notification process to its account holders. However, ING DIRECT has been forced to turn over nearly 15,000 “abandoned” accounts valued at nearly $4 million. Most account holders will never see their money again, and some may get it back at a loss, as escheated assets generally do not collect interest.
Minors especially tend to fall victim to escheatment, as parents leave their children’s accounts untouched for years. These accounts are often set up by parents or relatives for distant expenses like college, and they leave these funds untouched on purpose, and for good reason. In 2006, state governments collected $5.1 billion in abandoned assets, up from $3.6 billion in 2003. Nationwide, the total value of the escheated properties in state custody is more than $33 billion, and less than a third will ever wind up back with its rightful owner.
Americans can help avoid escheatment by performing annual transactions on all bank accounts and keeping their contact information current, including new or changed mailing or email addresses and phone numbers, with their financial institutions.”

In addition to their awareness campaign ING Direct also raised their CD rates. The new rates include:

6-month CD 3.50% APY

1-year CD 3.70% APY

2-year CD 3.80% APY

2.5-year CD 3.85% APY

3-year CD 3.90% APY

4-year CD 3.95% APY

5-year CD 4.00% APY

source: INGDirect.com