You thought that old bank account was dead, but really it's alive. Welcome to the scary world of zombie accounts.
Zombie accounts are bank accounts that consumers closed but have been reopened. These accounts, coupled with phantom accounts — which are created in a consumer's name without their knowledge — are creating real nightmares for some investors.
Ken Tumin, founder and editor of DepositAccounts.com, said he himself was the victim of a zombie account.
First, Tumin noticed statements in the mail from a checking account he thought he had closed. Then, he noticed the balance for the account on the statements became negative.
After investigating, Tumin found that when he closed a safety deposit box at the bank, the deposit for it was transferred to the old checking account. The transfer prompted the bank to reopen the account. Because the funds in the account were below the required minimum balance, the bank also charged fees.
"If I didn't get the paper statement, there's no telling how long that would have lasted," Tumin said.
The Consumer Financial Protection Bureau does not track how many zombie or phantom accounts exist. But consumers should be on the lookout for this kind of activity. Tumin said he has heard of a couple of cases where accounts were potentially created from the Equifax data breach.