FNBO Direct is SCARY

FNBO Direct is the online division of First National Bank of Omaha. The bank currently offers 1.25% APY for its online savings account with no minimum.

Note: The original post was written on August 13, 2007. Please scroll down or click here to find the latest update.

I am using FNBO Direct and quite happy to have most of my deposit with them. However, a couple of events recently with FNBO made me feel that there could be some potential problems with my money at this bank that I have never experienced at other banks, not that something will sure to happen.

First, on June 15, they sent out a note saying they could restrict transactions of my account if they “determine a security risk exists.” Ever since then, every time that I access the Transfer Fund service from my account, I have to read and agree the following statement:

You represent, warrant and agree that: (1) you shall not enroll an external account that anyone else owns or has an interest in; and (2) you shall not deposit funds other than your own funds into your FNBO Direct Online Savings Account; and (3) the title on each of your external accounts matches the title on your FNBO Direct Online Savings Account. We reserve the right to restrict what we permit you to enroll as your external accounts and we reserve the right to verify your ownership of and right to access your external accounts. By requesting to enroll an external account, you expressly authorize the organization that maintains that account to disclose to us any information that we request about you or the external account. When you request to enroll an additional external account, we may temporarily restrict all deposits to and transfers from your FNBO Direct account while we verify your ownership of and right to access that external account.

I appreciate the extra measures the bank takes to ensure the security of my account. However, if it is an agreement between me and the bank that I have already agree, do I still need to be reminded every time? I transfer funds from my own account, yet they keep showing me the message with the “I Agree” only option (yes, there’s no such option as “I Don’t Agree”). What’s the point? If I agreed, then I agreed. Asking me the same question over and over won’t make me agree more!

After the first couple of times, the extra click didn’t bother me any more and I no longer read the message as I know I didn’t do anything that could trigger the lock of my account. Then an email from the bank last Friday really scared me and made me question whether the bank is well managed. The message, with the subject “Due Diligence 2nd Request,” says:

As part of your initial application, we did not receive information regarding your current employer, occupation or position. In many cases, this is because you have a status of retired, unemployed or self-employed. We are updating our records as part of our on-going due diligence to be compliant with our standards to support the USA Patriot Act.

Due to the importance of the USA Patriot Act, we have placed a hold on your account(s) until we can document this information for our records. No deposits or withdrawals can be made through your account(s) until we receive this information. We will release the hold upon receipt of this information. If this information is not received within 30 days, the account(s) may be closed. Your immediate attention to this matter is appreciated.

I don’t remember exactly what information was asked when I opened the account, but I am very positive that if they did ask me for employment information, there is no way I skipped it if it’s required. If it’s optional, then I don’t have to provide it if they feel such information is not necessary.

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Fearing that they may indeed close my account, I replied immediately with the required employment information. Less than three hours later, another message from FNBO arrived, with an apology:

Please disregard the email sent on August 10, 2007, with the subject line: Due Diligence 2nd Request. This email was sent in error and we apologize for the confusion it has caused. If Due Diligence information is required, you will receive a follow-up email. Again we apologize for this inconvenience.

I am glad that they acted quickly to resolve the issue. As a new bank in the direct banking business, it’s expected that there will be small glitches here and there in the operation at the beginning. While it was not a pleasant experience to go through, it eventually worked out without any problem. And I don’t have much to complain when I can earn a decent return of my money from the bank :)

: Though I got some confusing emails from FNBO Direct initially, the bank has become quite reliable since then. In fact, it becomes the bank where I put most of my deposit. The bank currently offers 1.25% APY with no minimum, which is one of the highest interest rates available from major online banks. If you are interested in getting an account with the bank, check out my FNBO Direct review to learn more about it. The post also includes the process of opening an account. The bank also offers Billpay account which works as an interest checking account. The Billpay account currently pays 1.25% APY, the same as the savings account and also offers free online bill pay, etc.

Ready to start? Open a FNBO Direct Online Savings Account now and begin to enjoy one of the highest savings rates for your hard earned money.

Open an account

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    11 Responses to “FNBO Direct is SCARY”

    1. plonkee |  Aug 14, 2007 at 4:43 pm

      I also would not be trusting this bank so much. Although, on the bright side, you could also blame the government (via the Patriot Act) – I find them to be a very satisfying scapegoat.

    2. simmerdownnow |  Aug 16, 2007 at 8:33 am

      Same thing here. It made me angry enough to call the customer no-service and complain about being treated badly. She apologized and confirmed there was no hold on the account. Then the apology email came.

      The gov’t is probably leaning on them and they seem scared about their own liability if a terrorist should happen to have an account there. So I fault the Patriot Act and secret national security letters.

      But I also blame FNBO for consenting to being jerked around like a 10lb poodle, at the expense of their customers’ satisfaction.

    3. C |  Aug 17, 2007 at 3:23 pm

      I got this too and without waiting another second withdrew every cent I had in there.

      They say it was a mistake but I highly doubt that the email wrote itself. I work in email marketing (the honest kind) and usually an email like that woul dhev the be drafted up, agreed upon, coded into email format, put into a database so it could match peoples email addresses and populate dynamic areas of the email (such as the users account # and name based on their email address) and then sent out.

      I think that they either:

      a. They try to get enough info together to sell to 3rd parties and this was 1 of their methods but didn’t realize that it would piss so many people off. Once it was obvious that they were stepping out of bounds they cried “mistake”

      b. A way to get people to withdraw their own money because they are running into liquidity issues with the 6% interest.

      About a month before this email I got another one which asked me to fax a recent bank statement to prove that the linked bank account was in fact mine. Problem is that I had already verified that it was mine through 2 trial deposits thay had put into that very bank account.

      About 4 or 5 days before the Due Diligence email I tried to transfer about $10K from my savings but that transaction was mysteriously denied by FNBO.

      FNBO is shady – its not worth the extra 1% interest.

    4. Trent Hamm |  Aug 19, 2007 at 4:41 pm

      Spot on. Weirdly, I got almost identical uncomfortable vibes with Zecco when I went to open an account there. It may be cheap, but there were things that just didn’t seem right.

    5. BEN B |  Aug 28, 2008 at 4:00 pm

      The transfer may have failed because there is an IRS reporting form that is required for transactions $10,000.00 and over.

    6. CW |  Mar 05, 2009 at 10:46 am

      I’ve had no issues with this financial institution. I actually work for another financial institution and email messages like the mistake made above are not uncommon. Wrong queries can be run and thus, wrong people get emails. It can be very frustrating…but with being human, comes human errors. Hopefully, they’ve put some benchmarks in place to prevent email errors like that in the future.

    7. Sun |  Mar 05, 2009 at 11:01 am

      @CW: You are right about this bank. I guess it was just a glitch at the beginning (I opened the account not long after the online bank was launched). Since then, the banking process with them was quite smooth with no unexpected issues. Generally, I am quite happy with FNBO.