Due to an unknown and/or undisclosed error, Ally Bank somehow neglected to pay interest on some of their certificate of deposit (CD) products last year. Ally customers filing taxes right now might want to hold off until they know whether their 1099 is accurate or not.
In December, Ally Bank failed to credit year-end interest earned by some customers with CD accounts, according to a report by the Wall Street Journal. As a result, the popular online bank sent incorrect tax information to these affected customers.
The slip-up impacted roughly 5,000 customers, or about two percent of CD accountholders, Ally Bank spokesperson Gina Proia told the WSJ.
The WSJ reports that Ally is “in the process of crediting” customers with their 2011 interest payments. The bank had accounted for the payments, but through some glitch, they simply did not post to accounts. And because of this, issued Form 1099s might not accurately reflect its customers’ 2011 taxable income.
This marks the second time this week that a web-based banking service has suffered from a payment glitch. Earlier this week, Citibank’s iPad app made a somewhat similar error, double-charging customers for online bill payments.
A customer interviewed by the Journal expressed concern that Ally wouldn’t have discovered the error without customer feedback: “I think if I hadn’t caught this error, the interest wouldn’t have been paid,” he said.
This could certainly be a pain point for mobile and online banking moving forward. Customers will not feel comfortable making the switch to an all web-based banking experience if their trust continues to be violated in this fashion.