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MY RELATIONSHIP WITH money is complicated. I want to get the best value for our dollars, so I spend a lot of time comparison shopping. Other people hunt for bargains. I go on long safaris.
My frugality and comparison shopping have served Jim and me well. In our double-income household, we managed to save 50% of our combined pay—basically living on one income and saving the rest. That, coupled with some lucky breaks, propelled us to early retirement.
Going from saving for retirement to spending in retirement, however, brings with it a shift in mindset. You become less focused on getting the most from your dollars—and more focused on getting the most from your time. Yes, you still want to save money, but you need to balance that against the time and effort involved.
That brings me to our retirement income plan. We have five years of living expenses in cash investments, so we can sleep at night without worrying about short-term stock market performance. But cash, of course, pays almost nothing these days, so I’m always looking for the best deal I can.
Until recently, I conducted those searches from Spain, where we spent the first three years of our retirement until our recent move back to Dallas. To open new financial accounts in the U.S., we needed a U.S. address. To that end, like many expats, we rented a virtual mailbox. That gave us a physical address in the U.S., plus 24/7 access to our mail, all from the convenience of a laptop or smartphone. (This is different from a P.O. box from the postal service.)
In the past few years, using our virtual mailbox address, I opened two new travel credit cards in the U.S. to earn mileage. That gave us enough promotional airline points to pay for roundtrip flights from Spain to both the U.S. and Thailand. I also used the address to open high-interest savings accounts with Customers Bank, Salem Five Bank and TIAA Bank. All this required relatively little time and effort—a few hours to search the internet and a few more hours to set up the new account and transfer the money electronically.
Last November, however, I took the hunt for savings too far when I opened a Citi Priority checking account. Citi offered a $700 cash bonus for new customers if they maintained a balance of at least $50,000 for 60 days, equal to an annualized return of more than 8%. I transferred $1,000 to open the new Citi account and planned to transfer another $50,000 within 30 days.
The bank’s account opening process was relatively easy and, as with all our other accounts, I used our virtual address. A few weeks later, I got an email from Citi saying it needed proof of my physical address and my identity. But without waiting for my response, Citi froze my account and sent it to “new account fraud.”
After several phone calls with wait times that often lasted more than an hour, as well as text messages over several weeks, Citi admitted that it had caused the problem. It had violated the Patriot Act by opening my account without first validating my identity and address.
I sent the bank a copy of my passport and driver’s license, along with a receipt showing that it was indeed me who paid for the virtual mailbox. But Citi still refused to unfreeze my account. After a few months of back and forth, I requested that Citi close my account and return my money the same way it had received it—by electronic bank transfer. Citi refused.
A representative told me that Citi could only return the money by sending a check to a residential address and not to my virtual mailbox, even though I had provided proof that I owned the mailbox. I ended up filing complaints with the Office of the Comptroller of the Currency and with the Consumer Financial Protection Bureau. I finally got my initial deposit mailed to my virtual mailbox—seven months after I opened the account.
My experience was hardly unique. I discovered many other Citi Priority customers had faced similar situations. Citi either froze or closed their accounts, and then refused to return their money or refused to deposit the $700 promo incentive.
We all have limited time and money. I’m mad about the $700 I never got. But mostly, I’m mad about the time I’ll never get back.
Jiab Wasserman, MBA, RICP®, has lived in Thailand, the U.S. and Spain. She spent the bulk of her career with financial services companies, eventually becoming vice president of credit risk management at Bank of America, before retiring in 2018. Head to Linktree to learn more about Jiab, and also check out her earlier articles.
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I am going to say what I say whenever someone complains about a corporation, bank, cable company, appliance manufacturer,,,
THEY ALL SUCK
BTW same similar situation with Capital One, but I got earlier in the process as I could feel it coming 🙂
I’m not a fan of Citibank’s customer service, but I think your criticism of how they handled your checking account is unfair.
Like most banks, Citi does not allow people to open bank accounts with the primary address being a PO Box or anything other than the account holder’s actual, residential address. You did not give them your real residential address, which was outside the US. Instead, you used a virtual mail box, which would appear on its face to be a real, physical address. Citi did not initially detect this, but did catch this shortly thereafter. The only valid criticism of Citi would be that they should have caught this before opening your account, but hardly a scandal. Once Citi identified your account as having a possible compliance issue, it is not surprising that you had a bureaucratic headache to deal with, as you likely would at any financial institution.
The fact that you were able to open credit cards and savings accounts with other banks using your virtual mail box, does not mean that Citi did anything wrong. It is likely that those other banks simply have not detected this yet, and may never. If they do, you are likely to have a similar problem.
Since 9/11, governments have enacted legislation to limit money laundering and tax evasion. I’m sure you are not engaged in either of those. But someone opening a checking account from outside the US using a virtual mail box inside the US looks quite suspicious to a bank and their regulators.
I think a key take away is if you plan to move outside of the US, for even a few years, you should open any accounts before you leave, and let them know if you if need to change your address to a foreign one. Some banks are better about this than others.
John,
I have no issue with the Patriot Act. My issue is after my identity was confirmed by providing them my passport copy and the receipt for the mailbox, they refused to return me the money. I finally got my money back after I wrote to OCC and BBB and 7 months later.
BTW, I opened new travel cards with Citi while I was in Spain using the SAME virtual mailbox and had no issue with them. However, I recently voluntarily closed all my credit cards with them after this incident but I still get solicitations at my virtual mailbox address for Citi’s new credit cards just a few days ago.
You are trying to open an account and deposit $50,000, from Spain, using something called a “virtual address.” Any big bank has all types of regulatory obligations to “know their customer,” prevent money laundering, etc. From their perspective, I can’t think of anything that looks more suspicious that what you were attempting.
Jamie,
I totally agree. That is why I had no problem sending them my passport copy and my virtual mailbox receipt to confirm my identity and eventually requested them to close my account. My issue was they refusing to return my money until I wrote to OCC and BBB.
The big banks are notorious for creating bureaucratic problems with new accounts. Last year I got a promotion from chase for $1000 to open account with a link to do it online. I opened it but things never worked right until I got validated at a chase branch which defeats the purpose of doing things online. This was also during COVID lockdowns when you couldn’t just walk in. I did as requested and eventually got my $1000.
the online banks are so much easier to deal with.
Over the past year or so, I have increasingly come to appreciate the value of my time (and effort). More and more, I’m keeping the 80/20 rule (Pareto principle) and diminishing returns in mind.
The factors that meaningfully move the needle in personal finance–where you live, your income, insurance and healthcare costs, transportation costs, etc.–are vastly more important than the small details like maxing your savings account rate and credit card rewards. Personally, I enjoy doing comparison shopping, but at a certain point, all this relentless micro-optimizing is not worth the hassle.
I’ve learned that I’m wired as an optimizer, but I’m much happier when I force myself to act like a satisficer.
Wow, well said Thomas, I see 25 up votes. I sometimes feel a little guilty but I feel the same way, I just can’t be bothered with all these credit card thingies, seem like you get something but you run the risk of wasting your most precious asset.
I agree. When I was young, I opened up a number of credit cards. I’d go for the next one that seemed like it had good rewards. Now, I have one associated with a grocery store that frankly doesn’t pay as much as I thought it did. Maybe I misread the fine print. In any event, I have no desire to get any more credit cards, just because I don’t want to deal with the hassle.
Thomas,
I agree with you and thanks for bringing up the Pareto principle. Old habits die hard and I am growing wiser through this experience.
Thanks for posting the link to the explanation of “satisficer.” I had not heard of it but found it very interesting. I toured the Eisenhower Presidential Museum in Abilene, KS, recently and read there that Eisenhower had proposed “a middle way.” I liked that and it seems to fit with your good comments above.