I have been self employed for nearly 13 years and have managed to keep my head above water through the economic ups and downs. In the early part of 2006, I moved my commercial banking to Compass Bank, huge mistake, and opened two business checking accounts and accepted a small $10, 000 business line of credit.
At the time I had an excellent credit score of 759 and was managing to make ends meet in this competitive marketplace.
From time to time I would use my line of credit to purchase equipment and it pay back out of profits. There were times I would use most of the $10, 000 line and pay back most when the projects were completed. Over time as the economy declined I would use more of the line and pay back less but always made the payments.
I never missed a payment, I repeat, I never missed a payment and was never late with a payment and always paid at least double the minimum payment due.
Sometime in mid-2008 I received a letter from Compass Bank. Not a phone, not a warning, just a form letter stating that “due to information obtained in a recent credit report we have closed your business line of credit. Please destroy all checks and deposit slips associated with this account. You are still obligated to pay the balance…"
What had happened was that in April of 2008 I cosigned for a $24, 000 auto loan for a friend and the additional debt caused my credit score to drop. Evidently, Compass Bank pulls a credit report from time to time just to keep up with the credit worthiness of their customers. I have no problem with that practice. What I do have a problem with is that if they had a model customer for all these years wouldn't a courtesy call be in order before pulling the plug on a tool so important to a small business?
Fully accepting the fact that I owe Compass Bank the money I continued to make the payments as I always had even though I no longer had use of the account. As 2008 came to a close, it was increasingly difficult to generate new business. Businesses were holding off spending pending the outcome of the presidential election and committed contract were being pushed into 2009.
As income diminished and bills continued such as rent, utilities, phone, not to mention gasoline prices, the now closed, much needed line of credit had to move to the bottom of the list of priorities. I was no longer able to keep up with the payments. I literally had no income for the last quarter of 2008 and the beginning of 2009 and was barely living out of reserves.
Finally, in March of 2009, the companies that had postponed projects started to come back to life. On March 9th I was back at work once again after months without income. On March 12th I received a call from Anthony Smith in the commercial collections department for Compass Bank. It wasn't the first call, they had been calling for the past three months and every time I explained my current financial situation and how it was exacerbated by them closing my line of credit without so much as a phone call.
I explained to Mr. Smith that I had only just returned to work three days prior to his call and that I had every intention of making good on my loan and getting back on track. I was proud of my 759 credit score and had every intention of regaining it.
Mr. Smith was unsympathetic and demanded that a payment be made during his call. I explained once again what I had been going through over the past three months and only returned to work just three days ago and haven't been paid yet. I went onto say that I would make a payment next week once I knew exactly how much I was going to make. Mr. Smith, apparently not happy with what he was hearing, yelled at me saying that I have his number and to call him when I was willing to work with him. I was telling him that I was cooperating and had every intention to cooperate he abruptly hung up on me.
So, here it is the 12th of March and I haven't paid March rent, utilities, or phone yet and hoarding the last $1, 135 to my name to the last possible moment. On March 13th I decided that I couldn't hold out any longer and went to my Compass online banking service to pay these bills since I knew I would getting a paycheck the following week. I was shocked at what I found.
Mr. Anthony Smith had closed my business checking account and processed a $2, 000 debit against an account he knew only had a $1, 135 balance. And, Mr. Smith did this without my knowledge or my permission.
Mr. Smith knew that the balance in my account was only $1, 135. The $2, 000 debit placed my account a negative $894 with other transactions pending. This caused seven $38 NSF charges and another $42 in OD fees. As of this writing my account stands closed with a negative balance of $1, 707.99 and is increasing $7.00 per day, for every day the account remains negative.