01 October 2008

How Bank of America Screwed Me

So, today I am writing about being betrayed by a bank, Bank of America.

As you may know, I've been involved with free market money for many years. I began an earnest effort to get involved in December 2001 when some of my friends began selling me e-gold. Before that, I had been involved as a sort of hobby, forming my first e-gold account for a Texas constitution reform project in December 1998. During the first half of 2002, I went to many conferences and met with many of the entrepreneurs putting together digital gold currencies.

Sometime in April 2002, I met Bernard von NotHaus as a result of a meeting put together by a friend of mine with a common interest in alternative currencies. Bernard seemed very sensitive about some of the criticisms of the Liberty Dollar, especially by the one accountant who showed up. But, I felt that I had a pretty good bead on his intentions. It seemed clear that he wanted to have his currency circulate, and I understood right away that having a face value lower than the spot price of the metal on the coins prevented the American Silver Eagle from circulating.

Over the years since then, I've spoken to Bernard many times by phone. We've commiserated on problems in the industry, and difficulties faced by his company. I invited him into my home twice, fed him a steak dinner one time, and did my level best to be helpful. For the last six years, I've regarded him as a friend.

So, when the raid took place in September 2007 and the FBI seized all the gold, silver, and copper, without bothering to accuse anyone of a crime, I was outraged. Earlier this year, Bernard approached me about the recovery effort. It seemed that someone had to be the owner of record of Shelter Systems, the warehouse where the silver (and some gold) was stored against which the paper and digital warehouse receipts were to be redeemed. Naturally, I agreed to help.

That brought me into contact with the law firm of Stientjes and Pliske, and gave me the idea that maybe they could also help with the e-gold confiscation case. Strangely, I have not heard from them about that case since I brought it to their attention. Maybe I should call again.

One of the outcomes of having the government seize their gold and silver was having their bank accounts closed. For all I know, that might have happened on government order. Their new bank accounts were sufficient for some activity, but they were not able to get credit card processing. I think it was May or June of this year that Bernard mentioned this difficulty to me, and we began to negotiate on a contract to have my group, the Free Market Monetary Education Association, with an existing bank and merchant bank relationship with Bank of America and American Express, respectively, provide service to help out.

Thus freemarketmoney.org became an exclusive retailer for online sales of the Liberty Dollar. American Express uses PayPal to process Visa and Mastercard and other cards, which sort of surprised me. And PayPal did something bad to Liberty Dollar a while back, confiscating some tens of thousands of dollars for valid orders, or so I gather. So, I took the time to apply for a Bank of America merchant account, which we got. And we went merrily on our way into August.

During the month of August, Liberty Dollar sold over seventy thousand dollars in silver and copper pieces through our site. Pretty nice. There were some set up costs to Free Market Monetary Education Association, and an ongoing obligation on my part to answer calls from customers as they came in. In September, there was perhaps another ten thousand or so in volume, and everything fell apart. Bank of America became unhappy, or were caused by the government to be vexatious, and closed the merchant account.

So, I tried to sort that out, got frustrated by the banking cartel's enmity for all things successful and entrepreneurial, and got nowhere. I then contacted Rob Stientjes who agreed to do some work on behalf of Free Market Monetary Education Association pursuant to our contract with Bank of America. I think he got nowhere, too. Weird that the bank took credit card orders, won't return the funds to the customers, and also won't put the funds in our bank account so Liberty Dollar can process the orders and provide products and services to the customers. You can tell as you deal with banks that they have organised things to their own advantage, and to screw over everyone else. The best part is, the legislators have been bought and paid for, so they are legally permitted to do all kinds of heinous things (lending money the bank doesn't have on deposit, stealing funds from unused bank accounts, etc.) with impunity.

But if this story were merely a litany of criticisms of the banking industry, it would be poorly timed, given the widespread availability of such criticisms just now. And I was focused on other business, so I didn't worry too much about it. I decided in mid-September to fore-go any billing for my time in September. I had previously gotten the impression that the costs of getting started were more than Bernard had anticipated, so I sent him a thorough analysis of our time and fees under the contract on 29 August 2008.

In it, I reduced our billing for our senior programmer's time to junior programmer rates. I also took several hundred dollars off the account as a donation to the Liberty Dollar legal defense fund. My purpose was to help my friend Bernard, to help the cause of the Liberty Dollar, and to be as inexpensive as possible - but still not to get caught with fees from my vendors or the bank that I could not pay.

The next thing I heard from Bernard was on 26 September when he sent me a very unpleasant and terse note asserting that Free Market Monetary Education Association had drafted our bank account for over four thousand dollars to which he claimed we weren't entitled. I was very upset by this claim. I referred Bernard to the text of our contract, which seemed completely at odds with the analysis he sent to me. I sent him a copy of the detailed accounting I had prepared back at the end of August explaining where all the funds came from and went to, an analysis I may choose to publish here just to give a sense of how impoverished Free Market Monetary Education Association was at the time we took on this project, and how little we charged for our time and effort.

Then on Tuesday 29 September, just yesterday, I went by the postal box and picked up mail for our group. Here was a little card noting a $2026 transfer had been paid, overdrafting the account, and a $35 fee was imposed. Gosh, what a hassle. Especially since I had not sent any ACH payment out.

So, I called Bernard about this matter, and he was completely silent on the matter of how badly used I felt. He made no apology. He offered no restitution. I was still in the dark about how much the overdraft was, so I went back to my office. I logged into the Bank of America account. Lo and behold the account had $526 in it, and had been drafted for $2026, so it was now in the red by $1500.

Now, all betrayal and upset aside, this point is really weird, to me. Bank of America, in its munificence and wisdom saw fit to lend $1500 to a non profit association they had previously refused to lend money to on at least three occasions that we applied for a loan. I can't really understand how the bank managed this feat of stupidity, but they did it.

So, Bank of America obtained a $1500 short term loan from itself for a $35 fee. Not a problem. But, instead of notifying me about it, Bernard wanted to accuse our team of taking money we weren't due. The overdraft transfer took place on 24 September, and Bernard's accusatory message to me took place on 26 September. And here it is the first of October, and, guess what? The bank has taken its fees for the merchant processing they did perform in September, just under $500.

The funny thing is, had the funds been left in the account on 24 September, there would be no overdraft today, because there would have been funds to cover the bank's fees.

Now I'm looking at over two thousand dollars in red ink on this bank account. And it finally dawns on me that Bank of America can save the entire banking industry.

All they have to do is screw another two million or so customers the same way they screwed me. Make it an even $250,000 they transfer out of each account, which is all Federally insured anyway, and they have 2 x 10^6 times 2.5 x 10^5 = 5 x 10^11 or $500 billion right there (not to mention the $35 overdraft fee on each customer). Then they spread the word to JP Morgan Chase, Citi, and other scum banking gangsters, until 100 million Americans have all been overdrafted the same amount. Multiplying $500 billion by 50 gets them $25 trillion. See how easy? Child's play.

They don't need a government bailout. They just need to be dishonest with their customers on the same scale they are dishonest with the American people through our elected "representatives," (who do not, I believe, represent me, since I have no contract with any of them establishing terms of agency). And the American people are protected by the same FDIC insurance that is imagined to protect them in case of a bank failure. Why? Because they aren't protected from all the banks failing at once, in actual fact, and if you believe otherwise you're a fool.

Bank of America overdrafted our account and sent $1500 to Bank of America Merchant Services. If they only had more larceny in their hearts, and more imagination, they could overdraft their way out of the credit crunch.

And maybe, I'm just guessing here, maybe if a hundred million Americans all had their accounts overdrafted for a quarter million dollars each, they would burn down all the banks, hang the banking gangsters alongside the politicians, and go back to honest money. Because putting every family in America $80,000 in debt (for the ten trillion national debt, if you ever agreed to pay any part of that debt back) is evidently not enough to arouse the anger of Americans. You pansies.