Bank of America review: fixed to variable interest rate 59

I agree. I Have the exact same situation. Got my letter today telling me my fixed rate loan was going to change to variable. I am now going to have to find some sort of other loan arrangement. I cannot afford for my payments to go up, which they certainly will as the prime rate goes back up.

If it wasn't for the fact that i have really good credit, i would chose not to pay anything back. This is bate and switch and will en the end result in a lot more defaulted loans.

Your story is the same as mine. Wish I knew what I could do about it! I was told that if I have a budget I can apply for the Heartship program but they would not provide me with any written material on that.

Same story here... always paid more than minimum. Never late.

The ONLY reason I opened account was I was told it was a "fixed rate loan". When I called to complain and said I wanted to record the call because I had been lied to in the past you should have seen the reaction!

The most frustrating... going to the branch and being completely ignored because they "don't handle that". WTF?!

Our government really failed us with BofA. I'm really surprised no one has (yet) resorted to violence out of complete frustration.

Same here . . .I can't believe it. Interest rates are at historical lows. The government has printed lots of money and done tons of bailouts. Inflation & higher rates are sure to come. Granted, there are debates over how soon much higher levels of inflation will show up and how soon the Fed will or will not raise rates, but it will be here eventually.

So, Bank of America, knowing that interest rates are probably not going lower and will likely go higher, changes our rates to variable rates and sets the variable rate at our fixed rate. They didn't say, well, we're going to a variable rate but, good news, your starting variable rate is lower = hopefully, compensating you for the fact that there will probably be days in the future where it'll be higher than your current fixed rate. No, they choose to start our variable rate at our current fixed rate. So, that is awesome for them. However, based on various economic variables, there is no chance/probability on earth that we'll likely EVER see our rates lower than we have now.

While Bank of America's decision would seem to put them at a "no lose" situation, I thought about buy some of their stock to offset the risk of higher interest rates. So, when my rates go higher, I have a chance to benefit from their increased revenues. HOWEVER, as some others have commented, I see people defaulting on their Gold Option LOC and/or stopping to pay it the minute the rate/payment goes up. In fact, people that are debating that option might just wonder why they'd be making payments right now if that's the likely inevitable = if they are going to end up doing this and ruining their credit in 24 - 36 months anyway, why would you give Bank of American another 24 - 36 payments now?

Lastly, I see the door open for a class action lawsuit against their misleading practices. It doesn't seem to matter whether there was any fine print in the pages and pages of paperwork we signed for this. The fact is, in this current and recent economy & economic environment, people don't have a lot of sympathy for the big banks like they do for the struggling consumer that's finding it hard to maintain their lifestyle & pay bills.

I plan to do some searching on my own, but if anyone finds an attorney willing to take on a class action lawsuit, please post the information here - so we can all know about it & stay informed.

Thanks.

Also, I will be filing a complaint with the Comptroller of the Currency, my state Attorney General, federal reserve and the FTC.
http://www.occ.treas.gov/customer.htm
http://www.naag.org/attorneys_general.php
https://www.federalreserveconsumerhelp.gov/FormComplaint.cfm
https://www.ftccomplaintassistant.gov/

My story is like so many others. I hope that Bank of America loses many customers over this! I have had a fixed rate Gold Option loan for over three years, and have never been late or over the limit, and my rate was just changed to a variable that is tied to the prime rate. Another way for BOA to rip eveyone off! According to their customer service rep, this was a business decision and should not make my payment go up…yeah right! That’s true as long as the prime rate is 3.25% but what happens when it goes up to 8.25% or even higher? BOA has figured out a way to make it appear that they haven’t increased your rate, yet they know that prime will eventually go up and so will everyone’s rates. Take all of your money out of BOA and take it to a bank that demonstrates honesty, integrity and fair business practices. Someone should definitely file a class action lawsuit over this. If anyone needs a copy of the original account agreement, please email me at nations63@aol.com.

— Darlene

That was an error. It wouldn't let me post so I did a test and of course that went through. Anyhow, thank you Buddy W. for all the infor. I'm going to submit my complaint a.s.a.p. Darlene, I'll check this week and see if I happen to have the original account agreement yet. I may have it but I have to do some digging. How can they do this to us? Don't we have rights? I never knew they could take a fixed loan and turn it into a variable. It sounds like we all took out this loan with the same understanding. FIXED rate loan and it was guaranteed to stay fixed. I'm in on a class action should someone get one going!

Greenelee, I have the original account agreement and will be happy to email it to you if you can't find yours.

My story is also the same. I called BofA yesterday to opt out of the change and was told that was not available as this was a LOC and not a credit card. I explained that I was guaranteed that it would remain a fixed rate and was told that the disclosure at the time of opening the account stated they could change the rate at anytime. Even their letter along with the change was a little misleading. Normally, when a change of this sort happens, the notice of the change needs to be bold and their letter seemed more like housekeeping. Needless to say, I was not happy and it was evident that BofA does not care about keeping any business.

Same thing happened to us. We have two gold option accounts tied to our small business, and we recieved letters today saying we were switching from fixed rate to variable rate. We have a great credit score, no late payments, etc. It doesn't seem to matter to them. We would be interested in fighting this also.

I wrote the White House regarding the currect situation with Bank Of America and this is the response I received today:

Dear Friend:

Thank you for contacting me to voice your concerns about credit card companies. I am committed to addressing unfair credit card practices.

Today, the subject of credit is on the minds of many Americans, including how families finance everything from car purchases to college education, and how businesses get the capital to expand and succeed. I have heard from people across the country who have had their credit lines reduced and interest rates increased without clear justification. These questionable practices have compounded the impact of the current economic crisis on our families.

My Administration has enacted reforms that will help eliminate abuses in the credit card market. I worked with Congress to pass the landmark Credit Card Accountability, Responsibility, and Disclosure Act (CARD). This law promotes greater fairness, transparency, and accountability in credit card practices. It requires companies to inform credit card holders of payment timetables and accrued interest, and ends retroactive rate hikes and sudden changes to terms and conditions. These reforms will have a tangible impact on the ability of American families and businesses to achieve their goals.

Consumer protection is critical to a healthy credit system. For this reason, my Administration is committed to protecting responsible borrowers and demanding fairness in the credit card market. To learn more about CARD, please join me online at:
www.whitehouse.gov/issues/economy. For information on
credit and consumer protections, please visit www.mymoney.gov/credit.shtml or call 1-888- MYMONEY.

Thank you again for writing.

Sincerely,

Barack Obama

To be a part of our agenda for change, join us at www.WhiteHouse.gov

I would appreciate a copy of the original account agreement. This so-called “business decision” by BOA, while likely supported by the fine print, is so reprehensible that I am puzzled by it. Their actions were clearly misleading, perhaps so much so as to be criminal. I would certainly like to explore the process of class action in this case. I have no law background, but have studied banking and economics at graduate and post-graduate levels, have worked in banking, and hold in MBA.

I also worked for some time for BOA. I am so glad that I am no longer associated in any way with a company that would do this. This will hurt many individuals who have carefully made necessary credit decisions, and may damage the bank’s reputation to such a degree that we may still not be in the clear with the state of our country’s financial system. This is one of the most preposterous things I have ever heard of! It is cliché, but I honestly do not know how the people who made this decision can sleep at night.

I spent a great deal of time negotiating for the “fixed rate” I got on a personal line of credit, only to find out that all of those conversations were entirely meaningless. After berating the poor CR on the phone the other day, I half in jest asked the poor guy if they were considering the same sort of arrangements for my mortgage. At which point he asked if I wanted to be transferred to that department……I would recommend trying to get as many people to understand what has happened here- Has anyone put up a website specific to combating this? I don’t have much spare change (especially now!), but would be willing to assist in any way possible.

While it is probably not a violation of any contract law due to the fine print, BOAs actions would certainly fall into category of misrepresentation. All one has to do is read this a few times and let it really sink in to see that is so – BOA changed the rates on fixed rate loans to variable rates. I would think that a class action lawsuit would collect damages, which there will be. As soon as the APR moves up, the damages will be provable, and the only satisfactory outcome will be that BOA is made to pay said damages as the accrue until such a time that they change rates back on all impacted loans to the original, agreed to, fixed rates.

Although, is this perhaps a violation of contract law that such a provision even exists? Is it possible that the simple statement of the provision is in and of itself a violation of contract law? In other words, was there a violation of contract law even before the decision to act on the provision was taken?

To state it simply – how is it possible that something which is described in a contract as a “fixed rate loan” is contractually not a fixed rate loan? To me this is the same as the contract clearly stating that you are purchasing 100 apples for $10, but there is also fine print saying that the seller reserves the right to send you a single dirty shoe instead of the apples. The company keeps selling 100 apples for $10 and things are ok, then all of the sudden decides it will ship only single dirty shoes to all of its customers.

Another example – if I craft up a contract that you sign that clearly states that I will plow your driveway every Friday in 2009 if there is more than 1” of snow accumulated, but I also write in tiny print on the back of the paper that I will also bash your head with a baseball bat every Tuesday during the same period, is my subsequent action of bashing your head with a baseball bat on Tuesdays legal because it was stipulated in the contract that you signed? Or is the contract itself in some way not binding because of the absurd nature of its contents, and hence the head bashings are potentially illegal?

Look into precedence in class action and other lawsuits where misrepresentation was decided.

Same story for me, for almost 5 years now I had my line of credit (I opened it with MBNA) and now BOA changed my fixed rate to a variable. What really makes my blood boil in this situation is the fact that BOA gets billions of bailout money only to turn around and stick it to us.

I called BOA yesterday and was given the exact same story mentioned in other posts, I took it one step further though and threatened NOT to pay if they continue with the change. I asked to speak to a supervisor and was one wasn't available at the moment, they took my number and told me they will get back to me. This hasn't ended there, I will fight back!

I have also started asking friends to help me boycott Bank of America, I know it is like David going against Goliath but it only takes one stone to bring the giant down...

I also received the same letter indicating the rate change from variable to fixed. I have contacted two class action law firms and have not received a response. I also filed a complaint with the Fed (a lot of good that will do I am sure) and I filed a complaint with the section of the US Treasury responsible for monitoring national banks (again, I don't expect anything. I also sent an email to the worthless leadership of the House Banking and Finance Committee, and shocker I received no response.

I called BOA and received the same answer as everyone else. They already have me at loan shark rates, I can't imagine what will happen once the Fed starts to monetize the debt. They are trying to get me to sign up with a debt management plan, the only way they will lower the rate and change it back to a fixed rate. I have never been late with this payment or any others and I have good credit, so I don't think joining in a debt management plan is for me nor should I be forced into it by BOA. I just want them to honor the contract. I was told repeatedly when I applied over the telephone that it was a fixed rate for the life of loan. This is beyond amazing to me.

Please keep me posted on this I too am suffering the same fate. I would like to get in on the class action suit as well
teachack@yahoo.com

I found the original solicitation letter, from Bank of America, trying to get me to open the Gold Option LOC (aka CleanSweep LOC).

It states the following:

"Congratulations. You're pre-qualified for a Bank of America CleanSweep (aka Gold Option) Line of Credit with a credit limit of up to $50, 000 at non-variable rates that may give you the means to help eliminate many of your high-interest debts.

You put up no collateral. You pay no application fee, no annual fee, and you can setup your account in as little as 10 minutes. It's quick and easy.

. . .The CleanSweep Line of Credit (again, aka Gold Option LOC) offers non-variable rates as low as 8.99% APR, which may be much lower than interest rates you're paying now. Plus, because the rate is not a variable rate tied to an index (such as the Prime Rate), it will not automatically fluctuate when the index changes. You get to request the initial payment that best fits you budget.

Another . . ."

Pretty amazing that they sucked us in with these descriptions, only to put in the fine print (after you accepted the loan and had the money on it's way to your bank account) that they can modify the terms of this agreement.

I'd say the "misleading" charge is definitely there. I think we may have to agree to file a complaint & claim with the Arbitrator first:
National Arbitration Forum ("NAF")
Rules and forms of the National Arbitration Forum may be obtained and Claims may be filed at any National Arbitration Forum office, www.arb-forum.com, or P.O. Box 50191, Minneapolis, MN 55405, telephone [protected].

You may wish to contact an attorney prior to contacting NAF. I may do it this way - I'm not what the first way is that I'm going after them.

This is interesting. I work for another large bank and we actually did this with much of our credit cards. We looked into switching our unsecured personal loans as well, but were stopped by the OCC due to regulations for personal loans differing from that of credit cards. I wonder how BofA got through that red tape? Very interesting indeed...

I too suffered the same fate. I have had my BofA Gold Line originally when it was with MBNA. I have great credit, never been late and always pay more than the minimum. In the past they have even lowered my rate to 5.99% as a thank you. I'm now at 7.99% and I called about this new rule and apparently there is nothing we can do to opt out of it except pay the bill off (umm, I am going to need someone's yearly salary to pay this bill off!). I had the service rep do some numbers for me ranging if the rate jumps from 0.25 to 1.00 increase in the prime and it's still at the point where I am sending more than what the increase is. I am pissed because I send more so I can pay the bill off sooner than later. I realize the FEDS are meeting on November 4th and I hope something is done about this. Having good credit these days appears to be the real mark of the beast. I have about 5 years left to pay on this bill and pray I can get it done quicker considering this latest SCAM...

Please keep me in the loop as well if there are any lawsuits. I'd be glad to join in.

KennaOdeghe@gmail.com

This also happened to me. I have had this account since 1995! Recently, they contacted me, had me put all my debt together and then gave me a 10.99% fixed rate over a certain number of months. I think that it was 84 months. They say that I signed an aggrement to allow them to change the rates at any time. I never signed anything. However, I probably agreed verbally when listening in a foreign language.

How do we dispute this thing? How can the government allow this?

Nothappycamper, could I get a copy of your solicitation letter? I have my account disclosures but not the solicitation documents. If possible, would you email it to me at nations63@aol.com?

Also, for anyone who is interested, you may file a complaint with the Federal Reserve here:

http://www.federalreserveconsumerhelp.gov/consumercomplaint.cfm

It only takes a couple of minutes and maybe the more of us that complain, the better our chances of being heard.

I also was a victim of the non-variable rate scam. In my view, the small print on the solicitation does not support BofA's case. It does not specify that any rate change, etc., will apply retroactively to existing balances. They claim they sent a longer list of terms and conditions after the loan agreement was made via phone, which specified that they could basically change any of the terms to whatever they wanted whenever they wanted, and apply them retroactively, but I never received any such thing, and I certainly would not have agreed to such terms. I have filed a mail fraud complaint with the U.S. Postal Service, a fraud complaint with the FTC, a complaint with the BBB, a complaint with the Federal Reserve, and complaints with the state attorney general both in my state and in Deleware. If you've also been a victim of this scam, please file these complaints as well--it's the only way something will be done. I don't think any court will uphold knowingly false statements in a socitation simply becuase the small print says "all of the above is a lie" or because they have some hidden list of terms and conditions they claim to have mailed after the deal has been secured based on the solicitation and info provided during the phone call (and which, in my case, I certainly did not receive). It's also very curious that their soliciation doesn't mention APR changes being applied to existing balances, but their actual notice of change does (it would seem the omission of this crucial fact from the solicitation is intended to mislead; especially since they all of a sudden recognize the importance of this when they send the actual notification of the change). If this gets to court, I hope the discovery phase reveals a trend of not mentioning applying changes retroactively to existing balances in solicitations, but then mentioning it in the actual change notifications. This would provide strong evidence of the intent to mislead/deceive/defraud in the solicitations.

Nations63 could you please email me the information about the gold option loan. I seem to have lost that information. If you can, i will provide my email address. Thanks a lot.

I just received my new statement and my last months payment...which came out of my account was not posted...they did not charge a fee and they had a credit on my account which was not the same total as my payment. What in the heck is going on? I'm so in if anyone can get a class action suit started. I know for a fact that I will not be able to pay my payment if it goes up...they will drive me to bankrupcy.

Check this out:

http://getoutofdebt.org/4108/bank-of-america-offers-clean-sweep-debt-consolidation-loan-up-to-50000-lets-look-at-the-facts-and-see-who-is-really-cleaning-up#comment-15994

I have started a blog to fight this injustice! Post your story and join the fight!

http://goldoptioncalltoarms.blogspot.com/

Strength in numbers!

I have had the exact same experience with BOAs Gold Option Account. This was originally opened through MBNA as a special program for the Michigan Bar Association. I do believe that we can successfully prosecute a class action case against BOA based on the original solicitation materials. In fact, my original advances were made as a debt consolidation loan and were done PRIOR to my receipt of any paperwork, over the telephone with the loan officer that opened the account. There is a clear case for fraud and misrepresentation here.

I would be happy to serve as the class plaintiff and find us all a good class action attorney if someone can provide me with the original solication materials from MBNA for this account. I opened mine in April 2006.

Steven Like
sklike@msn.com

I found the original mailing. I'll scan it soon and upload it for everyone. Thxs.

If we just sit here and complain about this nothing will be done we all need to call our local congress man and file a complaint do noting get nothing done Please call if we the people stick together maybe we can get something done if they get an overwhelming complaints about this something will have to be done. I called my local goverment but i cant do it alone so please call some one make that call stop letting them take us for a fool its bait and switch they tell you its a fixed rate and than a few months later they tell you they are changing it to an adjustable rate that should be illegal when will it stop I would have never taken out the card if I had knowen they were gong to change it I called and no one cared at BOA the only chance we the people will have is to take it to a goverment level PLEASE CALL YOUR LOCAL GOVERMENT no one person can do this alone we all need to stick together and fight this CALL CALL CALL all you have to do is google your local goverment and than call if enough people call something will get done

i come too bank of america they told me i had no more money left

Just got off the phone with a supervisor from the Breya, Ca. office. His name is Javier Cintron. As with all of the comments above, my story is the same. I opened a Gold Option account with a non variable rate 2years ago. My loan consultant (aka salesman) was named Jason Tapang. Since this agreement was verbal if I asked him once I asked him 10 times concerning rate increases. The answer was the same. BOA will not change the fixed rate. My credit was based on income and my ability to repay. I was comfortable with the payment terms. If I had known that BOA would change terms I would never have agreed. I have a file from the inception of this process and cannot find the original pamplet that was mailed to me. Apparently this was a business decsion based upon the upcoming changes for credit card companies. The supervisor advised me to write a complaint and send to:

Bank of America
PO Box 15724
Wilmington, De 19850
attn: customer correspondence

This is totally unethical and I am assuming Mr. Tapang was trained quite well in anwers that would close the deal. I am contacting all of my representation with Washington concerning this matter. I will never do business with BOA again.

I found the orginal mailing that I received late 2009. Hope this helps someone. Let me know if I should post it anywhere else too. I can also e-mail it if anyone would like. My e-mail is greene.chelsea@gmail.com

How can this be legal? I also fell victim to their scam and my current monthly payments are $374. per month. When I obtained this "loan" I was assured my interest rate was "fixed at 12.99%. When I look at my current APR, it says 24.99% and I received the same letter last week stating they were changing my terms to prime + 3.25...whatever that means. I have always paid my bills on time, and have a perfect credit score. If the interest rates rise, I'll either be in debt to B of A for the rest of my life, or will claim bankruptcy because they were liars. Anyone out there who can help?

The only long term solution is for people to stop buying all financial products as all banks are corrupt and cannot be trusted and the government who are supposed to protect us are protecting them.

This means do not buy any loans or use credit cards.

Use cash when you buy stuff. It is not "dangerous" to carry cash. It is more of a risk to have your credit card stolen and deal with the fallout from that than risk the small chance of a mugging. If you live in a bad neighborhood where mugging in broad daylight in a grocery store is an issue for $100 in cash, then you have bigger problems.

The "danger" of carrying moderate amounts of cash is overblown by the ### banks to make us give them our money, then scam us and cheat us with corrupt fees.

Banks are loan sharks who lie and cheat and manipulate and are never to be trusted. No corporation is ever to be trusted as they lie 100% of the time and they do not operate on any kind of ethics. They exploit the good people who have ethics who believe in paying their debts, while they never keep their word and cheat and lie.

Stop being a victim and give back the bank what they give you. Stop paying them as they are cheating you. There is no morality when dealing with a bank or any corporation.

There is no real need in life for these ### banks to exist.

Usuary(interest loans) have been a plague of society for thousands of years and it is fundamentally a scam and exploitative.

Take back our power and never do anything in business that is based on morality or what is "good". Or, with all corrupt banks and corporations, do as they do and don't keep your promises as they never do. It is not their money anyways.

With the US banking system, 90% of the money they loan you is created out of thin air when the loan is made or the charge is made on the credit card so it isn't their money they are demanding back anyways.

I say to be "moral", pay them the 10% and that is fair and you have done the fair and just thing and go to sleep at night without any guilt.

I fully expect ### excuses and lies when I deal with a bank or any corporation and just stop listening to any of their lies and manipulations and don't argue. I just ask for what I want and if I don't get it, I do as they do and do what I want and not follow the original agreement. There is not much they can really do in the end.

Credit scores are useless if you stop buying fraudulant loan products so let them "ruin" your credit. Credit scores are meaningless anyhow.

Stop letting them control your life and act like "credit" is something valuable. Credit and debt is slavery and gives them power over your life.

It is better to drive a cheap car paid with cash and rent than to be a slave to these crooks and loan sharks to have a grand house or car.

Become free and stop supporting an industry built on lies and corruption and evil.

Okay, someone tell me if BofA goes bankrupt, now what?!

Source: theinternationalforecaster.com (this site has been reliable for years)

"Our sources tell us that the reason that Ken Lewis quit as CEO of Bank of America was because the Federal Reserve is dumping as much of the toxic waste as they can from other major banks into Bank of America and they are going to allow BoA to go bankrupt in 2010. There are 40 zombie banks in just Chicago alone. And, no one will take them over because they are so bad off with toxic waste. Corum that went under recently, and was bought by M&B had the Fed take all the toxic assets and M&B took the good stuff."

I agree class action lawsuit. I filed complaints with the organizations listed here. In my opinion this was very misleading. If we contacted the bank and told them we would be changing our payment terms we would face legal action. The bank should be held to the same standard. Banks should live up to ethical standards and work with the government instead of trying to create loop-holes that hurt consumers. Soon we are going to see the foreclosure crises turn into credit card foreclosure crisis.

I contacted the federal reserve in Oct. I received a response today:

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 [protected]

Website: www.helpwithmybank.gov

Phone: [protected]
Fax: [protected]

Sincerely,

Federal Reserve Consumer Help Center

Just an FYI for those of you contacting the Federal Reserve.

Good luck to everyone and let me know if you can get a class action started. I'm in!

Does anyone know if you can close your account and remain under the same terms before the APR changes from fixed to variable? I know it will hurt my credit but if I can remain at the same terms it's better then it ruining my credit because I can't pay.

Because it is not a credit card, you cannot choose to "opt-out" and close the account. I asked this same question when I called BOA customer service and was quickly told that whether or not the account was closed, it would still be subject to the current rate, which is the Prime + that was disclosed in the letters we all received. I can't help but think that is exactly why BOA did this to the Gold Option loan. In effect, they are FORCING us to accept this rate...unless we choose to default.

If we all refuse to pay,
That should be our only option. I will not be mugged by a bank. My rate is 21.99 and 741.00 monthly. I've been paying $900.00 a month for about 2 years just to get from under the 21.99. Now a new wrinkle. Not Me