Woman says debit card canceled without notice

Nelda Street stood dumbfounded at the check-out counter of Whole Foods in Ravenna last Thursday evening.

Washington Mutual had canceled her debit card without warning, she says, and there she stood without cash or checks.

She called WaMu from the store and was told by a customer-service manager that her card had been canceled because it was one of 2,000 card numbers stolen from a local merchant. A new debit card was on its way.

Embarrassed, she left the store without her groceries.

Street, who was upset she hadn't been notified before her card was canceled, says both the customer-service manager and a WaMu manager at a downtown branch the next day told her the bank wouldn't contact that many customers by phone.

A WaMu spokeswoman declined to comment on Street's situation but said the company does phone customers when their cards are canceled suddenly.

"We'd want her to have a heads-up call before she went to a merchant," said spokeswoman Libby Hutchinson.

In most situations, she said, customers are sent a letter and new debit card. Their old card is canceled after they activate the new one.

Very rarely, WaMu has to block or cancel a card more quickly — for example, if it notices unusual activity on an account after a card number is breached — and in those cases, it contacts the customer right away, Hutchinson said.

She declined to discuss the specifics of any security breaches that might have occurred with WaMu cards.

Street said the bank's stated policy conflicts with what the two WaMu managers told her. The telephone banker "seemed surprised that I would expect them to call," she said.

The irony is that Street always liked how WaMu protected her account.

"I was so pleased with them, because a friendly person will call if you make an uncharacteristic purchase and make sure that was you," she said. "And then you feel good that they called, like they're looking out for you."

Indeed, WaMu has ranked as one of the country's most trusted banks for privacy in surveys by the Ponemon Institute, a research and consulting firm focused on privacy issues in the financial industry.

In a survey being released later this week, the institute found that fewer and fewer customers believe their banks keep personal data secure.

When asked how they would like to be notified of a breach, 34 percent of respondents said they prefer the telephone. About 30 percent preferred written notice.

Larry Ponemon, founder and chairman of the institute, said that an earlier survey found that many people lose or misplace written notification from banks regarding security breaches.

"Banks send so much junk mail that people can't tell the difference anymore," he said.

Melissa Allison: 206-464-3312 or mallison@seattletimes.com

WaMu increases potential bonuses

Washington Mutual has increased the potential cash bonuses of Chairman and Chief Executive Officer Kerry Killinger and other top executives.

Under a new bonus plan, the thrift's executive officers can get a cash bonus this year worth up to 350 percent of their annual salary, Washington Mutual said in a regulatory filing with the Securities and Exchange Commission.

For Killinger, the new criteria could increase his cash bonus to $3.5 million from $3 million, based on his base salary of $1 million last year.

Actual payouts will depend on how the company's earnings per share, noninterest expense and customer-service performance matches with targets established by the board of directors' human-resources committee, Washington Mutual said.

Bloomberg News