Table of Contents
In this time of great economic worry and stress, Bank of America is sending out an offer they call their Clean Sweep® – Bank of America® Debt Consolidation Plan.
I thought it would be beneficial to take a close look at this offer and use it to help educate readers about what to look for and how the marketing message and reality can be two completely different things.
Once we finish reviewing this offer you will find that rather than a great tool to help you to get out of debt, the offer actually encourages you to use the line of credit to go even further into debt.
“Or think about taking that well-earned vacation or remodeling your kitchen. Then request any amount up to $50,000.” – From debt consolidation offer.
The Debt Consolidation Offer Envelope
It was the envelope that caught my eye and made me wonder. I could see from the back of the envelope that the mailer was from Bank of America but the front had some interesting statements:
- One Phone Call
- One Predictable Monthly Payment
- One Fast Way
- to help you get out of debt.
Of the marketing inducements made on the envelope I knew that only one of the four items was probably true, “One Phone Call”. The rest were probably very stretched statements at best or just simply outright deceptions.
The envelope says “One Predictable Monthly Payment” but the details on the inside tell me that the interest rate offered is variable and can be adjusted regularly and go way up.
“We may adjust your APR on a monthly basis due to changes to the Prime Rate.”
“Repayment term and payment amount are estimates which may change if, for example: your APR changes, you make late or partial payments, we access fees, you enroll in Credit Protection, or you take additional advances.”
So how can my monthly payment be predictable if the interest rate is variable and we already know that the Prime Rate will almost certainly go up from the low today? It would be ridiculous for Bank of America to say that the supporting fact for their statement is that the monthly payment can be predictable because they have a formula to calculate it.
The statement is obviously designed to make you believe that it will be a fixed monthly payment in the enclosed offer.
Is the statement “One Fast Way” true? I’m honestly not sure because while taking Bank of America up on their offer by filling out a few lines or calling them might get you approved fast, it would be a bold stretch of the imagination to say that this loan will get you out of debt faster unless you are currently being charged much higher interest rates.
The issue here is that when we get to the stuffer inside the envelope you will see that Bank of America is advertising an 8.99% interest rate but they also say that the rate could be up to 21.99% interest.
It is likely that the higher interest rate will be extended to someone that has a poorer credit report or a lower credit score. That means that for the person that might already have higher interest rates because of their credit, then they will most likely get an initial interest rate that is higher, or up to 21.99%.
Making a blanket statement that taking advantage of the Bank of America CleenSweep debt consolidation plan is going to get you out of debt faster is grand hyperbole. There is no way of knowing if you would even get out of debt faster even with the initial minimum APR since the rate is variable rather than fixed and it is impossible to predict what changes to the interest rate will be during the period of repayment.
The bolded statement “to help you get out of debt” is a wish at best. Taking advantage of this offer does not mean that you will get out of debt. in fact, if you use the credit to pay off other debts then rather than getting out of debt you are simply trading one debt for another.
I am sure that Bank of America would argue that by taking advantage of this variable interest rate offer that is subject to penalty interest rates of 27.99% and other fees and charges, that it is possible for someone to get out of debt. Yes, but not until the entire loan is repaid, and at what total cost?
The Debt Consolidation Offer – Front
Below you will see the top part of the front side of the Bank of America CleanSweep Debt Consolidation Plan offer.
Let me first start with the asterisks and referenced statements and then we’ll get to specific statements made in the offer.
Next to the statement “A loan amount up to $50,000” there is an asterisk that refers to the following clarification.
Approved accounts will have a credit line between $500 and $50,000 based on creditworthiness.
Next to “..pay off high interest rate debt” there is an mark that refers you to this statement.
We may prohibit use of this account to pay off or pay down any account issued by FIA Card Services, N.A.
FIA Card Services is the name taken by MBNA when it became a subsidiary of Bank of America. So this means that even if some of your debt is debt now owned by Bank of America, they may prevent you from paying a debt off owned by Bank of America so this offer can’t be used to shift just any debt. Does this mean that even though I might have a higher interest rate debt with Bank of America that they’d prevent me from consolidating that debt into this offer, why yes it does.
So let’s turn back to the offer again. On the left we see a series of bullet points that Bank of America wants to draw your attention to.
Even though this offer is sent in the guise of being a debt consolidation plan and a prudent financial tool to help you to get out of debt, let’s look twice at one bullet point in particular.
So while you may be approved for up to $50,000 you don’t actually need to use the money to get out of debt or reduce your liabilities, you are being openly told that you could use the money to go further into debt.
So this statement and inducement does not make this offer a benevolent gesture by Bank of America to help the consumer to better handle their finances in these troubled times. It is designed to allow Bank of America to also extend even more debt, to get you further into debt, even though it is called a debt consolidation plan and promoted on the envelope to help you get out of debt.
I’ve highlighted some of the statements on the front that got my attention. Let’s look at those.
“There’s never been a faster, easier way to get the extra cash you need to help pay off high-interest debt or to use however you decide”
That is just a blatantly false statement. The majority of credit offers sent can be approved over the phone in a short amount of time. How is this offer faster?
“…for a loan up to $50,000.”
So how is it that I’m getting out of debt by swapping one loan for another and we now from looking at the asterisk that our approved credit limit may be as low as $500.
“Or think about taking that well-earned vacation or renovating your kitchen.”
Here we are back to the encouragement to not use this credit offer to get out of debt but in fact to do just the opposite.
“APR increases or additional advances will lengthen term or increase payments.”
So this isn’t even close to being a fixed monthly payment debt reduction offer if when the APR changes, which it will, it will cause my payments to increase and the repayment period to become longer. There isn’t anything that is set in stone that I, as a consumer, could depend on to judge what my monthly obligation would be under this credit offer, even though there is a large and nicely presented table. The table is irrelevant to the final terms and interest rate fluctuations over the life of the loan.
“All payment amounts and terms above are estimate based on an APR of 8.99%. Your APR may be higher.”
If 8.99% is the best interest rate to be offered then the majority of people taking advantage of this offer will have a interest rate higher than 8.99%. Think about it like this, only the select group, the best credit people will actually get the best interest rate. So all the rest will get a rate between 8.99% and 21.99%. If the majority of people will get a rate higher than the interest rate used to calculate the repayment table, it make the figures used in the table inaccurate and not representative for the majority of new customers. I wonder what percentage of people that receive this offer will actually get the 8.99% rate? Logic would make me believe that that number will be the minority of all acceptances.
“…the U.S. Prime Rate applicable using this formula was 5.00% and the APR range was 8.99% to 21.99%. We may adjust your APR on a monthly basis due to changes to the Prime Rate. For approved accounts, we also reserve the right to change your APR, fees or other credit terms at our discretion. Additionally, if you fail to pay your minimum monthly payment by its Payment Due Date on any two occasions within 12 consecutive months, we may increase your APR up to a Default APR of 27.99%, which will no longer be variable.
I hope you saw what I consider to be on of the most important statements made in this offer, we also reserve the right to change your APR, fees or other credit terms at our discretion.
When you take Bank of America up on this offer, you are giving up all control and all future certainty to what this offer will cost you over the life of your repayments. There is nothing that is fixed or predictable about this offer, even though that is what is promoted. Let me be clear, Bank of America is clearly stating that they can change everything about this agreement at any time and for any reason and you will be bound by those new terms.
“You will pay a 3% transaction fee on each advance (minimum fee $5; there is no maximum)”
If you were approved for the entire $50,000 then you would have to pay a fee of $1,500 to consolidate your debts into this offer.
I must point out a critical and very important part of this part of the application.
“BY SUBMITTING THIS APPLICATION I AGREE TO THE CONDITIONS ON THE REVERSE SIDE OF THIS FORM AND TO BE BOUND BY THE TERMS OF THE ACCOUNT AGREEMENT, INCLUDING ARBITRATION, WHICH WILL BE DELIVERED TO ME BEFORE USING THIS ACCOUNT.“
This simple little statement could be the subject of an entire article in itself. An unsophisticated or desperate consumer in debt may simply take advantage of what appears to be a predictable monthly payment debt consolidation loan to get out of debt.
But this offer and application does not contain all of the terms of this loan and you won’t get those terms that you will be legally bound to or see them until you apply for the account and are approved. How can anyone make a fully informed decision about the merits of this debt consolidation loan offer without seeing all the terms?
Credit card companies have been under a lot of heat about their binding arbitration clauses in the credit card agreements. If there is a dispute under this agreement and you challenge it the case will not be handled by the court, but by an arbitrator appointed by the creditor. For more information about the unfairness of arbitration and the reality of fair and accurate representation of the consumer, read Banks vs. Consumers (Guess Who Wins).
In the interest of actually finishing this review I’m going to skip reviewing the very short application part of the front of this offer and move onto the back. In a future review I’ll concentrate on the application part of another credit offer.
The Debt Consolidation Offer – Back
The back of the offer consists of two parts. The top part is a continuation of the marketing message and the bottom half contains mostly terms and some marketing messages. The top half is below.
I’m already getting weary of pointing out all of the inconsistencies of this offer but here are some more.
“If you like, we can pay your others creditors directly, deposit the funds right into your checking account, or send you blank checks to use as you please.”
So now we learn that not only can we use the debt consolidation offer to take a vacation but that Bank of America will even send you blank checks to use as you please, and not just to get out of debt or to consolidate your debt or to lower your payments. If you take on new debt through this offer, your overall debt payments actually go up.
“The funds have a reaccess feature, so you can ask us to “refill” your account up to your available credit line over and over as you pay it off.”
I’m confused how a loan marketed as a plan or way to get out of debt, really gets you out of debt if you can just keep adding to the loan as you pay it off.
The bottom half of the back contains more of the same terms and conditions that I’ve already covered above. so in the interest of actually being able to end this article. I’m going to skip it for now.
Summary
Bank of America promotes its CleenSweep debt consolidation offer as a way to get out of debt with one predictable monthly payment. A quick examination of the offer easily shows us that the intent of the offer is not to get us out of debt, but to in fact encourage the extension of more credit and cash to use how we see fit to use it. Maybe even for drugs, gambling, compulsive shopping or some other purpose that is not in our best interest.
The idea that this offer will actually be as shown to the majority of people who apply is very suspect. The majority of people will not be able to repay their debt in accordance with the repayment table shown and there is nothing fixed about the monthly payment when the terms, fees, and APR can be changed at will by Bank of America.
In fact, the repayment table is completely misleading, false, and inaccurate even for the most qualified of applicants. The table shows a monthly repayment amount for 96 months, that’s eight years. There is no recorded time in the history of the prime rate where it has held the same interest rate for anywhere near that time period.
If we look at the prime rate adjustments over the last eight years you can see that the rate today, the rate that the repayment chart is based on, is at the bottom of the prime rate trends. That means that there is a significant chance that both the prime rate and your “fixed and predictable” monthly payment will rise during the period of repayment and be neither fixed nor predictable.
This offer appears to be nothing more than a ploy to push more credit to people that might be concerned about their current financial situation, looking to consolidate their debts or get a grip on better managing their financial situation. However, almost everything about this offer does none of that.
My vote about this offer – Avoid It.
- Lexington Law Credit Repair Gets Hammered in Lawsuit Settlement. If You Sell Credit Repair – Wake Up! - August 28, 2023
- People That Got Scammed by Robocall Debt Relief Company Life Management Services of Orange County to Get Money Back - July 7, 2023
- Consumers Charged Illegal Student Loan Relief Fees to Get Some Scratch Back - July 7, 2023
dang, too good to be true
Hi Steve, me and my soon to be ex- husband are 25,000 or 28,000 in debt and we are trying to see what will be the best program or thing for us to do before we get a divorce. Basically, we trying to pay off the debt that we accumulated together, before we start another journey of our life. We dont want to leave each other credit being mess up. Do you think debt consilidation will be best? and if not do you have any suggestions ?
Start with this online calculator https://getoutofdebt.org/31365/introducing-the-amazing-how-to-get-out-of-debt-calculator
what does keeping ur balance under 30% of ur credit line do for you?
what does keeping ur balance under 30% of ur credit line do for you?
Thanks for this post! Got it in writing via postal mail that I would be an “exception”
and am allowed to opt out. It states that I am allowed to do so
“provided I do not reaccess” my account. So, if I tried to use it
again, the exception will not hold, from what I can tell. I will
certainly not be using this again and am glad to have this in place.
Its windows look upon tropical trees in one direction, and up to the cool mountains in the other. Piles of bananas, guavas, limes, and oranges, decorate the tables at each meal, and strange vegetables, fish, and fruits vary the otherwise …… What we did see was one irregularly-shaped lake, possibly 500 feet wide at its narrowest part and nearly half a mile at its broadest, almost divided into two by a low bank of lava, which extended nearly across it where it was ..
A great post, thanks for taking the time to share, continued success to your site in the future! GOOD Work!!
Looking at the sample solution tables on their website I noticed they don’t show bankruptcy as an option and that is misleading. If they did, the total cost would show as being around $1,500 instead of $11,000 to $15,000 with their solutions.
Looking at the sample solution tables on their website I noticed they don’t show bankruptcy as an option and that is misleading. If they did, the total cost would show as being around $1,500 instead of $11,000 to $15,000 with their solutions.
Thanks for adding the new information, as well as your analysis. This is why your blog is one of the few I read and even bother to comment on. I don’t do it to hear myself talk – I do it because I know you actually listen. And welcome to my site http://www.mycosplayclub.com. More activites are waiting for you.
This can be a smart blog site. I mean it. You have a lot information about this problem, and so much passion. You also know the way to make people rally behind it, clearly from the responses. Youve got a style below thats not too flashy, but makes a statement as massive as what youre saying. Great job, indeed. And welcome to my site http://www.mycosplayclub.com. More activities are waiting for you. Good luck.
Start first with reading this article, The Honest and Unvarnished Truth About How to Get Out of Debt.
Hi Steve,
Your article really shed a great deal of insight to the corrupt banking world.
Our business failure left us with over $350,000.00 in debt. We are actually $550,000.00 on paper with $200,000.00 in reserves because we maxed out all our lines and took advantage of 0% credit card offers. I know this is very expensive money but my husband is not working and I don’t want to run out of money yet.
We have been on time with all our payments.
We own 10 properties with 3 mortgages and 7 we own free and clear.
We are in the process of short selling one of our Florida property because it is so underwater.
There is one property we own free and clear we can refi/cash out to become debt free.
We are not sure if we can get that type of financing being in our situation.
What do you suggest?
Thanks
Hi Steve,
Your article really shed a great deal of insight to the corrupt banking world.
Our business failure left us with over $350,000.00 in debt. We are actually $550,000.00 on paper with $200,000.00 in reserves because we maxed out all our lines and took advantage of 0% credit card offers. I know this is very expensive money but my husband is not working and I don’t want to run out of money yet.
We have been on time with all our payments.
We own 10 properties with 3 mortgages and 7 we own free and clear.
We are in the process of short selling one of our Florida property because it is so underwater.
There is one property we own free and clear we can refi/cash out to become debt free.
We are not sure if we can get that type of financing being in our situation.
What do you suggest?
Thanks
Start first with reading this article, The Honest and Unvarnished Truth About How to Get Out of Debt.
Well great news to all of you who were able to get it reversed:) Unfortunately, BOA found an new way to get us. Well here is my story with my gold option LOC… not only did they close my acct about a year ago, (which was fine because I only was paying it off, not charging more, actually I didn’t have a way to charge so I don’t know why it was called a LOC) Well last week I guess they found a new way to get us..I received a new bill and my payment went up, yet my interest rate was the same. So I called and they told me due to the economy, they are changing the terms of the note to be paid off in three years instead of eight years. So although I have paid faithfully for the past two years, my loan is now shortened to three years and forced my payment to go up. I am struggling to make the one I have due to the economy and lack of work for our business and now this. I made this loan over the phone and was told this rate and term would remain the same. I never signed anything before receiving the funds. I have over a 760 beacon but they gave me a 14.99% interest rate because I am self employed, I was told I could have a review in 6 months and when I called back they said they couldn’t lower it. I have paid over $11,000 in two years in interest because of this high rate and they get that before applying to principle. I borrowed $25,000 for medical bills, I still owe $22,000 two years later. I am not sure what to do, but I need something to be done. I also have a LOC through my company that they also cut off, we never paid late, they just said they weren’t doing LOC’s anymore. Now we are just paying interest and minimal to principle due to the same scenario. I think when “they” close your acct they should lower the interest rate to help you pay it off sooner. It was “Our taxpayer dollars” that not only saved them but paid bonus’s to all their big wigs. What is wrong with this picture? 🙁
Last month I dropped into my local branch and asked how I could take a $4000 advance on my Gold Option LOC with BOA. They told me they couldn’t do it. I needed to go home and do it online. I went home and got online. I couldn’t find any link in the BOA website leading to a place to request an advance on the Gold Option. I called the 800 number. I was transferred five times to different numbers. The last number had a recording saying what their hours were, but although I was calling within those hours, no one was answering. Anyway, after spending about 3 hours trying to talk to someone I went back to the bank. They said “oh, you have to get an advance on your card.” Hmm, very funny. I was never issued a card, only a $53,000 line of credit. Periodically I received checks in the mail to use. They have since all expired. I told them there was no card and they acted like I was a nut case. Anyway, they sent me over to the personal banker and he got on the phone after I told him my lengthy story. He put me on the phone and he walked away. The agent on the line asked a couple of questions, said my credit looked great, and then he said I would be receiving their decision in the mail in the next 2-3 days. About a week later I got a letter saying my line was reduced from $53,000 to 46,400. They left about $1,200 available. They never did call or send a declination letter for the $4,000 I had asked for. I supposedly had $7,500 available at that time.
Their business practices do not seem up to par!
Thank you so very much for all this wonderful clarification about BOA’s bogus offers! I am putting a link up on my website where I have a page devoted to credit card tricks so that people can be informed instead of led astray!
As a success coach, I consider it part of my job to inform my clients about how to avoid pitfalls like these.
You are providing an important service!
Sheila Van Houten
Who knew this elusive Right Thing existed in banks anymore?
Howdy!
Thought I should stop by and update my story, too. I got a phone call right after I contacted BOA. It was from one of the executive offices. She was very nice and told me my account interest rate would stay the same.
I then got a letter, just to me, stating that it would stay the same.
I then got another letter, more of a form letter, stating that all accounts would remain fixed, not just mine.
SO! It seems like the pressure from all the individual contacts got them to finally do the Right Thing.
Isn’t it lovely when the Right Thing happens?! Of course, I like to think that it was my letter that made all this happen… 😉 (just kidding…)
Thank goodness I saw this post to begin with! Thanks, everyone…
FO
Today in the mail, I got the same letter Timmy B. got, word for word, same date. So, it does seem that for now they’ve decided not to make this change and that all loans were switched back to the original fixed rate.
Steve, seriously, your article and the forum attached inspired this to happen. I think writing a follow-up on how the action affected change (or the retraction of a wrong change) would be a great article! I know we all wanted this loan to stay fixed for ourselves, but it is SO MUCH MORE satisfying knowing that together a few of us were able make this happen for everyone.
Steve, great article!
I just wanted to comment that I have BoA and while most of the people that I’ve had the displeasure of dealing with at the bank (mainly my local offices), when I call their executive support team (don’t have the number off hand, but it’s out there if you google) they are very friendly and more importantly, very helpful.
I’ve gotten to the point that I no longer even bother much with the branch office if I have a problem. I give them one chance, over the phone, to fix it, and if they refuse, I call the executive customer support and get treated like a real customer.
Good luck to everyone on these sham loans…
Mike
I will see what I can do! It does sound like my letter is worded differently than others. Mine stated that this change was made only to my account, that I was an exception to the change. I don’t want to be referenced personally though: I’m sure you understand.
Marlo,
I will cut out any personal information. You can feel free to black it out before you sent it to me. I just need to see what they said to get an idea of what they are offering.
Steve
When I got the letter, it merely stated that I would be exempt from the change, but it didn’t seem as though they were stopping the change for others. I got my letter in mid-November. I wonder if this is different in different states? I REALLY hope it changes for everyone. I am glad to be exempt, but I worry about those who are not and are not savvy enough to do what we’ve done.
Steve, I’m not sure I would have pushed for changes to be made had I not found and read your article. If they haven’t changed this for everyone, I wonder if you could write a follow-up that could further reveal this loan.
Marlo,
Thanks for the kind words and the update. Would it be possible for you to upload the letter you got so I can see it? If you can scan it you can upload it to me here.
With a copy of the letter I’ll write a follow-up article. Excellent idea.
Steve
I did a loan boa thinking i could consolidate my debt i was trick over the phone i though i was getting 8.99 interest rate they sent me my first statement payment and it was 18% interest rate after was paying down my debt i got a letter from boa saying that they would change my rate to a prime rate then after couple weeks boa sent me letter saying they made a mistake and there would be no changes it would be 18% John
Talk about a relief. I got a letter from BOA as well stating that they will honor the orginal agreement like the other posted stated. Letter was from Gregg Davis Sr. vice president. From the way it reads anyone with a fixed rate loan will stay a fixed rate.
As a footnote I received a call from my U.S. Senator Sherrod Brown (D) Ohio office.
They have asked for copies of all correspondences that I have had with BofA.
Steve if at all possible I would like to direct them to your site, due to the wonderful job you did outlining just how misleading this loan was.
Thanks for your help in providing consumers with better information to make better choices!
Timmy B.
Timmy B,
Sure, direct them to my site. I’m happy to help.
Maybe once they look at the original review of the offer I did they will see it was a stinker from day one.
Steve
Great News….. It does appear that BofA has sent out letters stating that they have changed their decision on Gold Loans.
I received this letter today from Greg Davis, Senior Vice President, Bank of America dated 12-4-09.
“We recently notified you in October of a change to your Account Agreement describing how the Annual Percentage Rate ((APR) on your account woul be calculated using a variable rate formula tied to the U.S. Prime Rate. After careful consideration , we have decided not to implement this change. As a result, your account will retain its current APR and remain unchanged.
Pease not that no further action is required from you regarding this notice.
We apologize for any inconvenience this may have caused as we continue to evaluate our business practices in response to changing market and economic conditions.
We appreciate your business and look forward to continuing to meet your credit needs.”
I think it proves that we were able to make some difference with the amount of pressure consumers put on BofA. I think it also helped that many of us had very similiar stories of being “mislead” by customer service reps who were either poorly informed about the terms and product or did indeed intend to mislead customers.
Marlo….KEEP THE PRESSURE ON!!
That would be so wonderful and would make the fight I and others put up even THAT MUCH more valuable. I’d mentioned in all of my contacts that it was not even remotely fair to allow different rules simply because someone was contacting them, that if they were changing it back to fixed for some, they should morally/ethically do so for everyone. Maybe even legally.
I truly hope this rumor is a truth!
Marlo,
I think we’ll have to keep our fingers crossed this becomes a reality for all. Those on the site have had some success in getting it rolled back to fixed but if anyone is counting on creditors to do the right moral or ethical thing, they’ll be disappointed. The number one value at all creditors is profit, not morality.
I’ll keep watching for updates from you and others for a confirming word.
Steve
Rumor has it according to another message board that the Terms for all BofA Gold Accounts have been turned into a fixed rate. I am sure that rate will vary depending on the original terms that you had. Hopefully this information is indeed accurate and letters confirming this will be sent out to all of us.
If anyone hears anything keep us posted.
Timmy B.
I called BOA last night regarding a different issue with my account…what a mess…anyway the customer service rep informed me that they were changing ALL the accounts back to a fixed rate. They realized it wasn’t a good situation and they were honoring the original agreement. Although I’m not trusting of BOA that they won’t try to change this yet again.
Good to know.
Thanks for the update.
Steve
Steve,
Thanks for commenting on my situation. Im really glad you wrote your article. I have allready drafted a letter to my congressman and im currently working on a letter that will be sent to BOA both through email and express mail. I agree with many posters. It will be great if they honor their orginal agreement but it is really sad that many people wont get the that option. I know that presistant people usally get the wheels turning for change in their favor its to bad many dont have the drive or knowledge to do the same.
Steve,
Thanks for this excellent article and for your follow up to the comments.
I got the Clean Sweep loan more than a year ago and have met the terms, making the minimum payments or more on time.
I found this site AFTER just dropping a letter in the mail to BOA, basically stating that I don’t agree to their change in terms. My letter is notifying them in writing that they are attempting to violate our original agreement and that I do not accept the new terms. I’ve requested notification in writing that they have received my communication and will honor our original agreement.
I don’t know if this will work, but I need to keep my current interest rate. I’ve got a large enough balance that I’m terrified that something will happen to increase my monthly payments substantially – this would really mess things up for me!
Thanks again for this site…
FO
Got it in writing via postal mail that I would be an “exception” and am allowed to opt out. It states that I am allowed to do so “provided I do not reaccess” my account. So, if I tried to use it again, the exception will not hold, from what I can tell. I will certainly not be using this again and am glad to have this in place.
I don’t know which person made it happen, but I did speak with a few different people who were in the higher rankings. They were all incredibly nice, not like the service center managers that we speak with on the phone regularly.
I say: keep emailing the list given above and see what happens!
Got a response today from someone after emailing Bob Kelly. The person stated merely that they had both read my email fully and that they would be finding someone that would be able to help me with the situation. That doesn’t mean anything will actually be solved, but we shall see.
In the text of the email, I outlined specific conversations (including dates) I’ve had with Bank of America regarding this loan. I also had sections addressing the change from fixed to variable, quoting my original paperwork, and addressing the deceptive practices involved with these loans, again quoting original paperwork as well as identifying other means of deception: for example, did anyone else notice that the “Change in Terms” was attached to the access checks they sent to us, the checks that ALL experts say to shred (the checks and all paperwork attached to such checks) to avoid identity theft? Also, the language of whether this is a “line of credit” or a “loan” is deceptive.
Just some hints about what I put in the letter that has now received two contacts. No action yet, but still two contacts.
Marlo,
Keep us posted on what happens next. I’m very interested.
Steve
Great article Steve – “Clean Sweep” is off their website now. Learned their lesson!!
My wife and I are actually doing fairly well now but we moved into a money pit of a house 3 years ago. The problems were huge and we quickly got into serious debt quickly.
Our credit is good though; we want to get a consolidtion loan, but my research has found some pretty sketchy offers. Our bank is USAA and they are offering 12%. Would you consider that pretty good? I have only found 15%. Are there any reputable banks you would suggest.
Wells Fargo doesn’t seem to even have consolidation loans.
Thanks for any help!!!
Thomas,
Take a good look at LendingClub.com for a place for a reasonable opportunity to find a cheap consolidation loan.
Steve
And what did your email say such that you were able to get such fast service? I’m on day two and have had no contact yet.
When you say “opt out,” does that mean that they allowed you to keep the loan fixed at the current rate you have always had, and that they’re closing the account with the agreement that no future changes would be made?
Also, who contacted you? What was her name? That way I can contact her.
Good point Steve!
You got a call from Bank of America or from the OCC?
Ryan – I did not get any written documentation and I also have that same concern. I’m not trusting of them in the least bit. I did however ask whom I was speaking with and she gave me her information in case there were any future questions or concerns. I basically just documented it all in my own records but I’m hoping they send out some kind of mailing even if it’s with our statement confirming that we were OPT out of the change.
Chelsea,
Have you considered calling customer service and asking a CSR if it is now a fixed rate? If it made it into the general system and is noted on your account that might be comforting enough to know for now.
Steve
Does anyone have the original advertisement for the NEA Personal Loan as offered in 2003? I have the original paperwork, but not the original advertisement for it that gave a particular number to call. If you have it, I would love a copy: litgirl828@yahoo.com.
Hi All,
So last night I blanketed all the emails that Chelsea provided. Thanks Chelsea. I also complained at the OCC and sent a note to my congressman and senators. I was to the point and basically said that all I wanted was the ability to opt out.
So this morning, I get a call from an executive relations officer from the office of the COO thanking me for bringing the issue to her notice. She also mentioned that she would like to retain me as a client and was allowing me to opt out. So thanks all you guys for all your advice.
For Chelsea, did you get any written confirmation. The lady who called me said she took care of it but I have already been bitten once and hence am not very trusting.
Ryan
Ryan,
Was the woman one of the specific people on the blanket email list?
Do you care to share the body of the email you sent that worked for you?
Steve
I agree. We need to bombard people with emails. Eventually they will hear us!
Marlo – I would assume that everyone will eventually receive a response. It could be from our letters or it could be from the OCC. So far everyone I have chatted with that have sent letters in the last couple of days have received a response from Bank of America. I truly believe that we have all been working together on this, supporting and helping eachother whom have this loan.
Maria.Damian@bankofamerica did not bounce back to me, so maybe that is it. Sorry for the million and one postings today. I think that if more people start pegging people, maybe we can affect change not just for ourselves but for the others who have this loan.
So far, have received a comment back from John.Collingwood@bankofamerica.com: he’s the director of Federal Government Relations and is the one who wrote the letter to Barney Frank that was in the October 5 papers.
I tried the VP of GoldOption, but it came back. I saw the name was Oaria.Damain. Anyone know what the actual name is?
I’ve sent an email to Ken Lewis, and to two Senators, one Congressman, and the OCC in Houston. One point I brought up was that if others are receiving concessions on this, so should everyone. I do not think it is a fair business practice for one or two people to either have their loan “re-fixed” or be able to opt out, but the rest of us still are not allowed these options. I am so glad some people were able to do this, but to me, this makes their practice even more suspect.
Anyway, I will let you know how it goes. Maybe, just maybe, someone will begin investigating this for EVERYONE.
Marlo – I don’t know which e-mail did the trick but below are all the contacts I sent to. You will get several that bounce back but many do go through.
ken.d.lewis@bankofamerica.com; colleen.haggerty@bankofamerica.com; britney.w.sheehan@bankofamerica.com; nicole.nastacie@bankofamerica.com; joe.price@bankofamerica.com; keith.banks@bankofamerica.com; michael.jones@bankofamerica.com; liam.e.mcgee@bankofamerica.com; brian.t.moynihan@bankofamerica.com; amy.brinkley@bankofamerica.com; steele.alphin@bankofamerica.com; liam.e.mcgee@bankofamerica.com; bradford.r.dinsmore@bankofamerica.com; michelle.shepherd@bankofamerica.com; maryellen.baker@bankofamerica.com; ken.d.lewis@bankofamerica.com; amy.brinkley@bankofamerica.com; steele.alphin@bankofamerica.com
Tim – yes I did the same thing and I too think they realize how misleading because the lady I talked to did say she realized that their reps had been stating some of the things I mentioned in my letter.
How did you get the email address for the VP? What is it?
Chelsea,
Good to hear!! Once it gets to the executive level there seems to be some positive response. I do believe they realize exactly how misleading this was for consumers.
I had to blanket e-mail, did you?
Be polite, rational and persistent. If you don’t get the answer you want, keep trying. I have been trying to get in contact with someone each day since I received the letter and thanks to “anonymous” one of the e-mail contacts he gave me went to the right person. I didn’t have to say anything when she contacted me, she was very nice, apologetic for the stress and frustration I’ve been under and said that she wanted to call me personally so I would not have to worry about it anymore then I have. I’m not saying I trust them by any means but I was glad to get a response. Again, thanks to all of you and good luck with BOA.
I received a call today from the assistant VP and they are allowing me to OPT out. Thank you so much Steve for this site. Good luck to all!
Chelsea,
Congratulations on the good news.
What was the key step you took that you think lead to this successful outcome? What should we tell others to do first?
Steve
Thank you for all your suggestions Steve! I really appreciate you input.
I think it’s very similar. So in other words, if they don’t allow me to stay under the terms that I took the loan out I essentially have follow their new terms? I didn’t sign anything, and everything was over the phone.
I noticed on yours it says: “We may adjust your APR on a monthly basis due to changes to the Prime Rate.” but mine doesn’t say that. Although there is a small spot that says they have the right to change your APR at it’s discretion, but for the most part if refers to changing it if you are late or default in some way. They also said this verbally but repeatedly guaranteed a fixed rate loan without changes in the rate, length of the loan or payment amount.
I’m surprised they can legally advertise like that…suck you in and then change the entire terms on the loan. Changing from a fixed to a variable is a big change in itself.
I’ve done everything everyone has recommended so if anyone has any other suggestions, I’ll take any.
I just know that I can’t afford a higher payment a month no matter what.
Thank you Steve!
Chelsea,
The most important terms and conditions are not the ones you originally saw but the ones in force now. It is very possible they have been changed since the loan was taken out and language slipped in to allow them to change the rate from fixed to variable.
Now, I’m not saying that banks can’t make mistakes but over all my years they seem to pay great attention to the fine print and get that right. As I remember, Bank of America is not offering an opt-out option on this rate change. If they were you could refuse the new change, have the account closed and pay it off under the old terms. Currently banks are not obligated to offer that option.
Steve
I contacted the federal reserve almost 2 weeks ago. This is the response I received:
The entity you are inquiring about is regulated by the Office of the Comptroller of the Currency (OCC), and we have forwarded your correspondence to the OCC to investigate and respond to you directly. If you have questions about the status of the investigation of your complaint, please use the following contact information for the OCC:
OCC Customer Assistance Group
1301 McKinney Street, Suite 3450
Houston, TX 77010-9050
Website: http://www.helpwithmybank.gov
Phone: 1-800-613-6743
Fax: 713-336-4301
Sincerely,
Federal Reserve Consumer Help Center
Just an FYI for everyone.
Chelsea,
Thanks for the solicitation uploads. It looks like the same offer I scanned and presented above. I agree with you, very misleading.
Steve
Chelsea,
BofA’s Corporate address is:
Bank of America Corporate Center
100 North Tryon Street
Charlotte, North Carolina 28255
The address you used is nothing more than a large clearing house for their BofA credit cards. Ever notice how they are all located in either Deleware or Nebraska. Two states that do not cap interest rates!!
KEEP THE PRESSURE ON!!
Ken Lewis’ e-mail address is ken.d.lewis@bankofamerica.com
Thank you. I have to re-scan the solicitation letter which I don’t have on me right now so I’ll do that soon and upload it.
I am also a victim of BOA scam of a Clean Sweep. They guaranteed me a fixed rate loan to pay off debt where I was assured my payment or rate would not change for the duration of my loan. My loan was taken out over the phone, nothing was signed.
I’ve e-mailed “Ken Lewis” as suggested twice, however I’m not receiving a confirmation that my e-mail is going through. Do you have a mailing address for him?
I found the original solicitation and I can e-mail it to anyone that needs a copy of it. Mine is from 2009. It’s very deceiving! They repeat and underline fixed rate several times. Like many others I was assured this was a fixed rate, my rate or payments would never change as long as I was never late on a payment. I think for the most part our story’s are all the same or very similar. I just don’t know what to do at this point. I know that I will not be able to handle an increase in my monthly payment when that happens. The funds are just not there.
I filled complaints with the following:
http://www.occ.treas.gov/customer.htm
http://www.doj.state.wi.us/
https://www.federalreserveconsumerhelp.gov/FormComplaint.cfm
https://www.ftccomplaintassistant.gov/
I’ve mailed a letter to:
Bank of America
PO Box 15724
Wilmington, De 19850
attn: customer correspondence
So far the only one I heard back from is the Wisconsin Department of Justice which informed me that BOA was a National Bank so there was nothing that the State could do and referred me to the Federal Reserve.
Isn’t there any law out there to protect us from these types of lies and scams? Any suggestions? What should I do from here?
Thank you!
Chelsea
Chelsea,
B of A corporate HQ is in Charlotte, NC. I think a letter sent via express mail will help it to stand out and get some attention. In cases like this best to send it to the top and let it filter down. You can upload your copy of the original solicitation here.
Steve
Steve,
The conversation started off quickly with “We will keep your current Bank of America Gold Line of Credit at the same APR and payment for the duration of the loan, unless you try to use it” (NOT A CHANCE OF THAT!!) I have a hunch in speaking with the BofA Executive that they know that this was cleverly marketed and they don’t want too much light shed on it. Anytime I tried to ask questions about how the loan was presented he told me that “everything was done lawfully and their was no one trying to defraud the consumer.” As I stated in my letter to them I cannot understand a bank that received 20 Billion in TARP money and that lost 2.2 Billion Dollars in the Third Quarter primarily due to defaults on loans would change a loan as radically as this. Seems to be setting them up for even more losses.
I do have to give kudo’s to both my U.S. Senators and Congressman’s staff for touching base with me and asking questions regarding how this was presented.
Ryan,
As much as I hate to admit I bombarded BofA with e-mails, including Ken Lewis with a nicely worded letter that I had filed complaints to Attorneys General in two States, My Senators and Congressman, The House Banking Comittee, and the Comptroller of the Currency as well as media outlets. The very next day Mr. Neil from the office of Ken Lewis called me to tell me that my rate would remain fixed for the life of the loan. I still intend to pay this crazy thing off ASAP.
Good Luck
Timmy B.
Timmy B,
That’s really good to know. Thanks for sharing your success.
Steve
Hi Steve,
Very informative column. I got stung by a similar BofA Gold Option loan that promised 8.99% for the life of the loan. Recently I and a lot of other customers received a letter stating that the terms had now changed from fixed to variable. I guess I did not read the terms clearly but still it is a grossly misleading solicitation. I can’t seem to find the original documentation so I can’t even give it a second look. is there any recourse for me or am I screwed. Thanks.
Ryan,
I’d have to go with screwed. You can get a lawyer and try to fight it but…
Steve
Michael,
If after finding no resoulution with Bank of America File complaints with your elected representatives both Senate and House, Your States Attorney General, The Comptroller of the Currency, and the House Financial Services Comittee. I have filed complaints with all and have heard back from my Congressman’s office. They have asked for any and all information regarding this loan and I have even suggested they go to this site to see exactly how deceptive this loan was to begin with. My Representative’s office has told me that there is real concern in Congress that Credit Card defaults and loans like this could lead to the “second coming of the financial crisis.” Infact just two days ago The Financial Services Committee unanimously passed H.R. 3639, the Expedited CARD Reform for Consumers Act of 2009, which would move up the effective date for credit card reforms from February 22 to December 1. This is a small step for consumers but we must keep the pressure on Congress to let them know that there are good consumers with descent credit scores working to pay back loans that they have taken out but some banks are making it more and more difficult with these types of practices.
I fully believe that winds of change maybe upon us, but we must keep the pressure on and make this a true grassroots initiative to make these “mega financial institutions” accountable to the American consumer.
Best of Luck,
Tim
Marlo has a point. He said “The agreement says they can change the APR but doesn’t state that they can change it from fixed to variable.” Can they change it from a fixed to variable. I remember specificly asking while on the phone if they could change my rate and they said no that it was a fixed rate with a set maturity date / payment. We have the means to pay BOA even if they increase the payment however is there no recourse for us to take? Im at the point where if they increase it I want to stop paying them to prove a point and hope that they might negociate with me at that point due to the fact they would then know the extream im willing to go to. however I know that that would mess up my credit which is hovering a little over 800 fico.
Michael,
Ultimately the answer is going to lie in the fine print of the terms and conditions at the time the change was made.
Stopping payment will screw your credit and as pissed off as you are, this would be a needless and useless and will only harm you.
If you don’t have a copy of the latest terms and conditions for the card, (who does?) call and ask customer service to email or fax you a copy for you to read and examine.
If my memory serves me correctly I have all the T&C change sections to read that any term could be changed with as little as 15 days written notice. In the BoA Clean Sweep offer you commented on it said “For approved accounts, we also reserve the right to change your APR, fees or other credit terms at our discretion.”
The difference was that before the banks made such horrible decisions and lost all that money they cared about loyal customer retention. Now, they are just scrambling for as much profit as they can make. This is a classic example of how everyone is only as valuable to the bank as their last payment.
Steve
Steve,
Thankfully I am in a position today where I can pay off this loan and will immediately. It was a clever marketing plan to say the least.
I cannot believe it would not be in BOA’s best interest to leave these loans as is. I would forsee many defaults on the horizon with the bank losing more than the 2.2 billion it just reported.
Timmy B.
The agreement says they can change the APR but doesn’t state that they can change it from fixed to variable. I asked if I could close the account and secure it at the current APR, and they said regardless of whether I close it or not, it will still remain variable and gave no guarantees they would not raise the APR to an outrageous amount.
Next step. Trying to get a local credit union to balance transfer this loan so I can break up with B of A. I don’t like bad relationships.
I wish I had seen this article earlier. I applied for it over the phone three years ago in an attempt to pay off debt with one affordable payment. I thought I had covered my basis in the phone conversation with the rep who told me that you will have ” a steady monthly payment, like a car loan. Bank of America is now sending out letters dated October 2009 tying in the APR to the U.S. Prime Rate.
According to the letter. ” We are also changing the way that we calculate your minimum payment when there is a change in the prime rate. This will result in an increase or decrease in your payment amount, but will not extend your repayment term.” “Your current payment will be recalculated each billing cycle in which your term restarts, and for variable rate accounts each time the variable rate index changes”
Well I guess I fell for a fools game. Banks are now in the LEGALIZED LOANSHARKING BUSINESS.
Timmy,
In my opinion the Bank of America Cleansweep program was a cleverly marketed offer that was grossly misleading as I reviewed. I’m still stunned by their table showing fixed monthly payments when it was never a guaranteed fixed monthly program.
I’m so sorry you got stung with this.
Steve
I originally opened a debt consolidation loan through National Education Association, funded by MBNA. Bank of America bought it. I’ve spoken with BofA several times, asking directly if the terms of the fixed APR would ever change. My paperwork guarantees it will not, and BofA guaranteed it will not.
Yet, I just received a letter from them saying they are changing this from a fixed APR to a variable. Is this legal? Are they allowed to do this? It seems criminal, as this is not the original loan agreement, and I have had so many guarantees it would not happen. They have also given no information regarding what to do if I disagree with the new terms.
Marlo,
I bet if you go back and read the fine print it will say they can change the terms at any time with 15 days written notice.
Steve
I’m stuck with two of these loans by BOA. I have numerously tried calling them to reduce interest rates and/or the monthly payment. I was put into collection were one of the accounts interest went down to 4%, the other is at 12.99%. Yet the monthly payment for each is $520 a month.
We’ve lost jobs, reduced down to EDD, part time work, or work that is full time but slow. I’m a senior and I am thinking of bankruptcy for both of them. I don’t know what else to do. I am still current with them.
Hi there, Im in a situation…husband is threatening me with a seperation…I recently purchased a truck and a trailer under my name for both of us…Due to marital problems I am not receiving any financial help from spouse..I am over my head in bills, but don’t not want lose or effect my credit…I am employed but the question is “Would the Clean Sweep debt consolidation offer” would available in my situation..Need advice ASAP! Thanks Yvette
I doubt this would be a good idea for you. THe underlying issue here is the lack of support from him and the marital issues. If you want to try to borrow your way out of this mess, try LendingClub. Otherwise, you should probably see a bankruptcy attorney.
Steve
Speaking of the Lending Club, what is your opinion of them?
I have been approved for $15K at 12.5% which is lower than my 20K credit card debt rate. Never missed a payment but have been out of work for 6 months and just got 3 month contract. I am thinking that the loan from LC over a 3 years spread with a fixed rate is a better option that drawing from my IRA and getting jut with a 10% penalty and taxes that I can’t pay right now.
Also, do groups like the lending club affect your credit score? I have a 750 and don’t want to ruin it.
Marilynn,
I like LendingClub.com and happen to be one of the many lenders that helps people through there. A loan from LendingClub.com would hurt your credit no more or less than a loan or extension of credit from any other similar source. While your credit score today is 750 nobody can predict what it will be in the future. It may be higher or lower but that is also a function of how the underlying formula for the score changes.
Anything other than draining protected retirement funds is more preferential.
If you follow my link to LendingClub you will see how I would be happy to help fund your loan once it is live on their site.
Steve
I work for the State of California and I currently have 9.42%& pay cut from my pay check every month. We will possibly be getting another 5% paycut soon as well because of the budget mess here. Since then I have had decrease in pay and my mortgage is behind several months I decided to try to sell my home as a short sale. No offers yet and I am way behind in my bills. I cannot file BK did that after a divorce and it was discharged in 02/03 and I cant file BK 7 because it has not been 9 years and I can’t file BK 13 can’t afford attorney. Should I try to modify home loan and how could I get back on track with bills. I am $20,000 in debt. What would you suggest? Thank you.
Hi Steve,
What is your opinion/advice on Debt Management Companies (Ex: Credit Alliance Group). I have approx $40K in credit card debt and finding it very difficult to make payments each month now since I am unemployed. I seem to fall short. If I go to a bank, they will most likely not extend me the money to pay down the debt and have one monthly payment. That is what I am trying to achieve OMP! Can you send some advice?
Thanks,
Karen
Karen,
If there is no reasonable expectation of getting employed in a short period of time I think it is a mistake to launch into a debt management program or any debt repayment program that has a great chance of failing from not being able to make future payments. In that case I’d suggest that you go and speak to a local bankruptcy attorney and get some information, education, and advice about what bankruptcy would mean for you.
From what I see on the Credit Alliance Group website, it looks like they are a debt settlement company and if you enroll in a debt settlement program right now, all or damn near most of your payments to them will probably go towards their fees instead of your creditors.
Looking at the sample solution tables on their website I noticed they don’t show bankruptcy as an option and that is misleading. If they did, the total cost would show as being around $1,500 instead of $11,000 to $15,000 with their solutions.
It sounds to me that in your situation, with no expectation of a paycheck right now that bankruptcy is worth a good hard look.
Steve
i get paid once a month. my check goes to house bills and all credit card bills and this month i realized that i dont have enough to pay at least 3 bills and they are due at the end of the month (so i think i can manage until then). i dont go out and i dont spend money wasteful (now) otherwise i wouldnt be in this mess. all my cards are not completely maxed out but they are getting there. i am currently searching for options and ways to possible reduce my debt and my credit score i believe dropped. my credit is fair, i always pay my bills ontime. i am at the last straw to see i should enter into a credit counseling program. i dont want to enter into a program that will totally screw up my credit like a debt program. maybe i have them both wrong in my head and they are both the same credit counseling and debt program. well, i am pretty big on my credit history and making it at least look good or try to keep from getting a poor credit. i dont know what to do at this point but keep looking for advice on line.
I would suggest that trying to protect your credit over finding the best solution for your situation is not a beneficial thing to do. If you want to protect your credit, pay at least the minimum payments before the due date and don’t let your credit card balances exceed 30% of your credit limit.
When you are ready to approach this situation, unconditionally, help and solutions are available.
Steve
I fell for this!! I applied got the $50K at 15.99%. I made my payments faithfully for 1 year …then… I was laid off!! I went 90 days without paying (avoided BOA’s calls)…then I called them (thanks for your advise Steve) and told them my sad story. I told them I did want to pay them (it paid off some very high credit card bills for me). I told them I had 2 part time jobs now and needed help to reduce the interest so I could continue to pay. Otherwise I would have I couldn’t believe this… BOA gave me 0% interest for the remainder of the loan…reduced my monthly payments. I couldn’t believe it… The only thing is that if I miss one payment my original agreement goes back into place… let’s hope I can maintain!! Thanks again Steve!!
Breaking down (in some detail) BofA’s “Clean Sweep” debt consolidation offer. http://tinyurl.com/6e3z73