[Update: March 8, 2006
VirtualBank sent me a check for the amount in question, and the issue has been resolved. I received a voicemail message and email from a senior vice president stating that the funds had been recovered. I received the check along with a letter apologizing for the delay. VirtualBank did not charge me for the research. I do not know if VirtualBank was influenced by this post, but I would like to thank them for eventually investigating and resolving the issue.]


Even if you enjoy testing out sketchy online banks, I highly recommend staying away from VirtualBank. They stole my entire deposit. If I want them to look into the situation, they want to charge me $20 per hour, and of course it’s not known how long the investigation would take.

Great idea! VirtualBank stole my money, and now VirtualBank thinks I’m going to give them $20 per hour to investigate how they stole my money? I don’t think so.

Here’s what happened. I decided to give VirtualBank a try in late 2004 because they had a money market account with an APY that was competitive at the time (it’s not anymore). I made my initial deposit into VirtualBank from my First Hawaiian Bank account. Shortly thereafter, I closed my First Hawaiian Bank account because I don’t live in Hawaii anymore, and I had accounts with higher returns. I don’t necessarily need a physical bank location, but I want a higher interest rate for the tradeoff.

After testing out VirtualBank for about 8 months, I decided they weren’t worth it. I didn’t particularly like their website, and many other banks have accounts offering higher interest rates. I asked VirtualBank to close my account and mail a check for the remaining balance to my home address. Instead of doing what I requested, VirtualBank closed my account and pretended to transfer the money to my First Hawaiian Bank account, which had been closed for a long time by that point. If they couldn’t comply with my request to close my account and send me a check, then they shouldn’t have taken any action without my explicit approval. At the very least, they shouldn’t claim they transfered the funds to a non-existant bank account.

I’ve talked to First Hawaiian Bank, and their records don’t show any activity on the account since the time it was closed. It’s conceivable that First Hawaiian Bank accepted the transfer for a closed account and kept the deposit for themselves, but I doubt it. Regardless, since VirtualBank unilaterally decided to transfer my money from my VirtualBank account to a closed First Hawaiian Bank account, Virtual Bank should be the one to figure out where the money went. That’s why I’m placing the blame squarely on VirtualBank, even if the money is floating around in First Hawaiian Bank’s system somewhere.

In conclusion, don’t use VirtualBank if you don’t want to be cheated out of your money!

[The issue has been resolved. See the update.]

22 Responses to “VirtualBank”

  1. Deb A. Says:

    Interesting! Thanks, you convinced me not to try them.

  2. Jackie Says:

    Glad to have read that you’ve got your deposit back.
    Money can either put a grin on people’s face or a cringe on their sanity. The later is more commonplace, unfortunately. I hope all is swell.


  3. Dave Says:

    Had me concerned/worried for a while. Glad to know it turned out OK

  4. Michael Says:

    I’m thinking about a mortgage with Virtual Bank. The rates are excellent — but there will be lots of money at stake. Has anyone out there gone this route?

  5. Jerry Kelley Says:

    Because of Virtuals high savings I was going to open a savings that was paying over 5% Now that I see so many complaints

  6. John W Says:

    I would only want to put virtual money into a bank called virtual bank. That way if anything happens all you would loose is virtually nothing. 🙂

    Reminds me of that old latin saying, caveat emptor.
    But hey, none of us are perfect.

    Thanks for the warning.

  7. Jennifer Says:

    I as well, am being scammed right now!!!!!!!!!!!!!!

  8. Cheri Says:

    Jennifer, please elaborate. I am considering a mortgage with Virtualbank. I have heard good things about them (as wells as bad).

  9. Hari Says:

    Has anyone had a mortgage with virtual Bank. I am planning on having one and wanted advice if some one had experience. Thanks

  10. shelly Says:

    I am currently involved with Virtual Bank in a mortgage I am researching to see if it violates the Massachusetts Predatory Home Loan chapter. If it does , I will find a qualified attorney to recoup my damages. Stay away from them. They are quick to change their rates and put you into a negative amortization situation….in less than 1 month after closing….. I am researching my other options quickly to get away from them….with a $15k penalty, I might ad….they are crooks.

  11. lynn Says:

    To Shelly

    VirtualBank is a Federally regulated institution. They are not required to follow state laws. They are required to follow Federal Predatory Lending guidelines which differ greatly from state guidelines.

    Make sure you tell your attorney that before he takes your money for a retainer!

  12. Tom Mazzo Says:

    I have been having a problem with VirtualBank.

    My checking on line statement does not always show the correct balances if you take the prior balance and add/subtract the next transaction.

    My calls to VirtualBank were treated as an anoyance and I was not allowed to speak with the COO or the CFO or anyone higher then the manager. I was told that there were other transactions in the works (and not shown on the statement) that the running balance showed and to check back in a couple of days.

    When I complained that this did not work for the CUSTOMERS, I was told, this is the way WE do it and dismissed.

    I have been unable to find CEO, CFO or any of Board of Director e-mail address.

    Although I have loved VirtualBank for years, and recommended it to numerous people, I DO NOT RECOMMEND DOING BUSINESS WITH VirtualBank.

  13. Topper Says:

    I am having a problem with them right now with my home equity line of credit. They have made an error in calculating the balance and are stalling on solving their error.

    I would suggest to anyone considering them to instead go to a brick and mortar bank.

  14. John Says:

    I would not recommend them for a mortgage. I have a home equity line with them that they froze recently because they say my property value declined. I provided proof of the value remaining stable the same day I got the letter. I was anoyed because they froze it without notice and I had a check outstanding.

    I spoke to a supervisor who promised me she would review the information immediately and unfreze my credit line. She never called me back, even after I left several messages on her voice mail. I spoke to other reps and supervisors who promised to call me back, but alas, not.

    It has been 3 weeks and I have to find other financing to cover my NSF check. Ive never had an NSF check and have perfect credit. Now I have to pay fees incurred because of their action. The really don’t care about thier customers nor the fact that they are causing hardship through their negligent actions.

    Since I haven’t heard back from them, I am looking to see what legal recourse I might have. Is anyone else having this problem. If so, maybe we could get a class action law suit together.

  15. Topper Says:

    John – They now put a freeze on my line as well. I wrote and they responded with a boiler plate letter saying I would have to prove my homes value.

    I have a contract with these people and they are not holding up their end. They should have to prove to me that my home has lost so much value that my line is no longer within the ratios used when I obtained it.

    Customer service is terrible since they moved out of florida.

    They have a class action law suit filed against them in California about another issue.

    We should sue these bums to get their attention!!!

  16. Topper Says:

    class action against Virtualbank – California lawsuit alleging, among other things, that the bank did not properly disclose certain terms prtaining to ARM loans.

    I wish the Plaintiffs the best and hope it costs Virtualbank a lot of money to compensate these victims!

    Attorney for Plaintiffs’

    Lori E. Andrus (SBN 205816)
    Micha Star Liberty (SBN 215687)
    Jennie Lee Anderson (SBN 203586)
    1438 Market Street
    San Francisco, CA 94102
    Telephone: (415) 896-1000
    Facsimile: (415) 896-2249
    Attorneys for Plaintiff and the Proposed Class

  17. Topper Says:

    Let’s sue Virtualbank for the line of credit bull. Class action against these greedy idiots!!!

  18. lspidell Says:

    Banks in general steal our money. I believe that is the meaning of the word bank. Why would virtual bank be any different. I would not be at all surprised to find out the Hawian bank has the money.

    Up here in Canada, we have a few major banks that literally rape us of our money, and the government is right there to back them up. These are the “Freedoms” we fight for.

    At least you have options for your banking in the good ole USA!

  19. Justin Says:

    Do not go with virtual bank. They are terrible and charge massive amounts of money for anything and everything.
    I am trying to ‘work out’ my mortgage and they are completely unresponsive.

  20. Lynn Says:

    I just got snailmail from Virtual Bank saying they have eaten up my original $100 deposit by charging me “dormant fees” since my acct was inactive. Please note they had my email, snail mail, and three phone numbers as well as an active linked account. The reason my account was not used is because they never followed up with anything in writing so I could be comfortable of what rules they were following. They did not send the money to State of California as would be typical with a bank who could not locate a person – instead they have decided to use up the money by charging fees. It is a principle issue rather than a large amount of money – I’m just glad I never transferred my other funds to this account (mainly because of the switching of interest rates mentioned by others). Also please note – they remove your messages from their website so be sure to make a print screen of any correspondence.

  21. Bruce Allured Says:

    I cannot recommend VirtualBank – I’ve had a $90,000 HELOC (home equity line of credit) with them since 2002, with interest payments drafted by them from a checking account that always has a $2500 “cushion”, so no late payments. I was stunned when they returned a check I wrote against the account.
    I got two stories: when I first contacted the NJ “help” line I was told that all HELOCs in my area had been frozen due to concerns about the real estate values, but when I contacted the lady who had originated the loan she sent a copy of a letter to me saying that it had been frozen because I was in default for failure to make timely payments. When I recontacted NJ they said there was no default (our lowest credit score is 785).
    Incidentally, our 2400 sq ft home is on 4 acres with 240′ river frontage, and the 2.6 ac vacant lot next to us with 160 ft frontage just sold for $250,000. The HELOC plus 1st mortgage total <$180,000.

  22. Donna Says:

    I too had put $100 in an account as a request from one of my children (they got $25 in their account I think for “recruiting” another person to open an account). I received a letter a couple of years ago stating that the account had no activity for a few years and requested that I send them a copy of my driver’s license (which I would not do). Never heard from them again til now October 2009…my account -I don’t know how much I got in interest- is down to $39 due to “dormant fees”…WHAT A JOKE ON ME!!!

    Funny thing is that I sent ING $100 to open an account as a request from one of my other children…it hasn’t gained much in interest but at least I have MORE money in that account and NO DORMANT FEES.


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