What happens if you don't pay a bank's account closing fees in the U.S?

Question

Many banks charge account closing fees of $25 to $50 when a customer wants to withdraw their money and stop using their services. I'm not sure if these fees are even enforceable, but I would like to ask others for their insight on what usually happens with them.

Do their payment affect an individual's credit score? Do banks usually take legal action or place a lien against a customer who doesn't pay the fee? Or are these small fees usually waived and forgotten if the initial scare and shock tactic fails to elicit an immediate payment?

Answer 1

I left it as the comment on the other answer, but you asked it as a separate answer, so I'll elaborate.

First of all, the other answer is correct in a sense that it is very unlikely that the bank would pursue legal action over $25 of unpaid fees.

But they can still hurt you. Similar to credit accounts, there's consumer reporting agencies for deposit accounts. ChexSystems is one such agency. Accounts in bad standing get reported there, and other banks can see your negative banking history. In this situation, you'll close the account without paying the fee, so the bank will assess the fee and you'll end up with closed account with negative balance. It would then get reported to ChexSystems, and any time you try to open a new account - the new bank would see it and might refuse service to you.

The negative history on deposit accounts is kept for 5 years.

I've seen that actually happen to someone I know (that's how I even know about this - most people don't). In that case though that person had overdrawn the account and abandoned it, stopped using it. The bank closed the account and reported it, and that person got stuck without being able to open any new bank accounts for a while until that was sorted out (they eventually went back to that bank, paid off the balance + fees, and the bank removed the negative mark).

Answer 2

I'd think the bank could easily enforce the fee by deducting it before paying out the balance in the account. Like if they say there's a $25 closing fee and you have a balance of $100 and you say you want to close the account, they're not going to give you $100 and then ask you to give $25 back. They're just going to give you the net $75.

If you didn't have $25 in the account ... If you signed a contract where you agreed to a $25 closing fee I would think it would be legally enforceable, absent some law specifically forbidding such fees. I guess how far they go to collect would be up to the bank. I doubt they would take you to court over it. Are they going to pay a lawyer $200 an hour to fight in court over $25?

Answer 3

Last year, I abandoned a 15 year old "free" account at a Texas savings and loan. To close it, they said that I must meet with an S&L officer at one of their branches. Too much trouble. I took out all of the money allowed, leaving $5.00 with them. ...forever!

They still send me monthly statements and car-loan types of advertisements, but they won't be seeing me again, ever.

No repercussions... but, then, it was a "no-fees" account.