Is Your Money Safe in a Bank?
79
Why Bank Accounts Are Not For Everyone
At the end of October I left my job as a CSR in the call center of a major regional bank and never looked back. Within two weeks of leaving, I dropped about six pounds without even trying, I slept better, and the chronic TMJ pain I'd been having in my neck and jaw completely disappeared.
Banks have never been known for generosity or kindness, but since the trend towards larger and larger corporate banks first took hold in the early to mid-nineties, bank policies have gotten downright brutal--so brutal, that before you open a personal checking or savings account, you might want to first ask yourself a few basic questions about your needs and preferences.
Here are a few you questions to consider before banking:
#1--Will it bother me if the bank charges hundreds of dollars in fees for an error that is not my fault? You wouldn't believe how many people are bothered by something like this. People can be very sensitive about being socked with huge bank fees, and if you are one of those sensitive people, a personal bank account may not be for you.
In fact, a coworker at the bank call center who sat near me--an employee who had one of the best sales records on the floor and therefore got some of the best paychecks on the floor--refused to keep a bank account with our bank or any other bank.
"Why?" You may well ask.
Well, what happened to this employee happens to a lot of people. She wrote a personal check to pay for a retail item when her debit card would not swipe. The next day she discovered her bank account was seriously overdrawn. The store ran the item on the card four times (even though the clerk honestly believed their machine wasn't reading the card) and also processed the check. Several other outstanding checks came through and bounced (due to the four duplicate retail charges).
The bank charged this employee $36 per overdrawn item (the standard overdraft fee), which came to $288--four $36 fees for the duplicate debit card charges and four more for other checks that would have cleared had those charges not been there. On the third day after the first OD charge, her account also began to accrue an $8 per day "Continuous Overdraft Charge." By the end of that first week she owed the bank $320, with an $8/day clock still ticking away--and that was just the cost of the fees, not the items themselves.
The bank refused to remove the fees, claiming the error was the store's fault. The store refused to reimburse her for the fees, claiming the fees were the bank's fault. In the end she paid all the fees herself, all $320 of them, then withdrew all her money. She now keeps her cash at home and buys money orders to pay her bills.
And she works at the biggest bank in this area!!
I personally saw this specific situation happen so many times I can't begin to guess how many. Suffice it to say it was very, very common: A multiple times a day occurence. Now, it's true that lots of people do overdraw their accounts through their own negligence. Maybe they aren't good at math or don't write things down or whatever, but when it is clearly not the fault of the customer (as in the example I just mentioned), most major retail banks (including the one I worked for) still have a policy in place that states that because the fault is not the bank's either, they will therefore not remove the fees.
And they aren't kidding. If you are Oprah they won't remove those fees, trust me. In fact, toward the end of my time at the bank we had a staff meeting in which some new posting policies were explained to CSRs that were specifically designed by the bank to increase fee revenue.
That's right: The bank actually thought of some new ways to help people mess up and get charged fees for trying to use their own money. Some of those policies (and these are all quite common across the industry) included: 1) making money deposited on a Friday afternoon (in person) unavailable until Tuesday of the following week, 2) making ATM deposits not available for five days no matter whether the deposit was cash or check, and 3) dispensing cash at the ATM even when it isn't in the account so that overdraft fees can be charged on the withdrawal.
#2--Do I Insist On Being Treated with Courtesy and Respect?
If you are one of those people who thinks that other people ought to be nice to you just because they are holding thousands of dollars of your money in their private institution, then trust me, banking is just going to annoy and upset you.
From the bank's perspective, once they are already holding your money, it no longer counts as anything of value. Money that the bank already has is of absolutely no importance to the bank, and that includes the money you just put in there. The only money the bank truly cares about is new money.
So--if you are opening a new account with money from another bank or money you have stashed in a sock somewhere, you will be treated with respect and courtesy, and you may even get free coaster or keychain. If you have money in an annuity or a CD at a brokerage firm that you want to bring into a retail bank account you will be treated like a god or goddess (and may even get a free coaster or keychain). If you park half a million dollars from a different bank in a 7-day CD at your new bank, the CSR you work with may even kiss you (or marry you) and will definitely give you all the keychains and coasters you ever wanted, and maybe more.
But on the very next day, if you go into that same branch and are treated rudely or are handled with a total lack of professionalism or skill or even basic knowledge about what money is and how to add single digits in a short column, you may well be treated with scorn, derision, snootiness or indifference if you complain. You see, your new money has become old money overnight. The bloom is off the rose, The honeymoon is over. Your spring chicken is now a cooked goose.
If that kind of fickleness and crass grabiness bothers you, you may not want to keep your money in a bank. I personally witnessed customers yank millions of dollars---millions--over rude and inept treatment, and no one, not a manager or CEO or even a janitor, would lift a finger to change their minds no matter how I pleaded for a bone for these people. When I brought up issues of retention at a staff meeting after a recent policy change I was told by my supervisor in a very gruff tone, "Look, if they don't have new money, get them off the phone. I don't care how, just get rid of them and get on to the next person. We want new money and that's all we want. The end."
The other problem with the courtesy and respect issue is that what you may not know is that bank employees are generally empowered to do nothing except open new accounts and absorb abuse and frustration. That's why the bank hires them, and the bank is very clear on why they are hiring these drones. Banks carefully calculate how long a CSR or branch manager will last---and it ain't long--and then price them accordingly. The banks expects constant employee turnover and counts on it to keep costs low and keep policies vague and troubleshooting nonexistant.
Does that seem wrong to you?
Then you might not be happy keeping your money in a bank.
#3--Do You Have Medical or Other Debt?
As most people realize, the U.S. health care system is in a state of crisis (kind of like every other U.S. system right about now), and what this means is that even people with decent health insurance can find themselves with a mountain of medical debt after a severe or sudden illness. Once the insurance has covered whatever it will cover, bills start to arrive, all marked "Payable in Full Upon Receipt."
For people who can't get health insurance, it's much, much worse.
Often, when people get such bills, they call the doctor or hospital or lab that sent the bill to see if they can make payment arrangements in good faith (because they do not have the in full amount due, and may never have it). At this point, they are often turned over to a collection agency who will indeed set up a payment plan. After the first payment is sent to the collection agency, the agency then takes the routing and account numbers on the check and attempts to automatically debit the entire amount owed, whether it is in the account or not.
If you have a good relationship with your bank (no recent overdrafts, a good credit score) the bank will pay the overdrawn item and then send you a note saying, "Hi, this is your Bank. You owe us $5785.00 on your overdrawn account plus $553 in overdraft fees. Please pay up." If you don't have that amount of money, the bank will start calling you every day, then close your account, then make it impossible for you to ever open another one anywhere.
"But wait!" You protest. "It's illegal for collection agencies to do things like that!"
OK. Maybe it is. It probably is. Hire a lawyer and have at it. In the meantime, your bank will continue to call you, over and over and over again. Your financial life will be completely ruined, and it will be ruined fast, too--faster than you can say--well, you know exactly what you'll be saying.
If you think this scenario might add undue stress to your life and you already have significant medical debt you are struggling to pay bit by bit, you may not want to keep what little money you still have left in a bank account. Definitely do NOT EVER send a personal check to a collection agency or authorize a partial payment on a medical debt unless you want to see your bank account wiped out and frozen.
I saw this specific scenario over and over and over again as a CSR. It's truly heartbreaking, but it's happening and it's happening a lot.
Not only that, even ordinary payments that are set up electronically can go horribly awry, and do, often, and while you are trying to sort them out the bank will happily charge you hundreds of dollars in overdraft fees that CSR after CSR will steadfastly refuse to reverse. (They'll be fired otherwise.)
Some of the worst offenders in this area--companies I personally witnessed on a daily basis totally screwing up the accounts of perfectly nice people were 1) direct TV companies (debiting hundreds of dollars in deposit money for services you thought you declined), a specific major phone company (that only goes by its initials) that runs paper check payments as direct debits then shreds the checks (making it impossible to prove if they debit the wrong amount or duplicate amounts), and internet companies that get your debit card info in fraudulent ways then just start running up charges on your account under weird acronyms posted with 800#s that go to recorded messages.
If it bothers you when other people come in and clean out your account without your permission and then you find out there's nothing you can do about it except hire an attorney and spend years and untold sums fighting all that, then you might not want to keep your money in a bank.
#4--Do You Expect Your Money To Be Kept Safe?
If you've read this far down into this hub, you probably already have a sinking sense that a bank might not be the safest place to keep your money, but if you are a really trusting person you might be thinking something like this:
"Pgrundy, these all sound like problem situations. I know people who never have any trouble with their banks. I think you are exaggerating this whole banking thing for effect. Basically the safest place in the world to keep money is in a bank."
That's a reassuring point of view, and one that I myself once shared.
That is, before I worked in a bank.
Consider this:
The vast majority of the people who work at your bank are almost certainly poorly paid and even more poorly investigated. They have access to your credit card numbers, your social security number, your home address, your land line and cell phone numbers, your employer's name, address, and phone number, and often the names and complete info on all of your kids and relatives who also have money at the bank or have ever asked, even once, about putting money into the bank, or are on the bank's mailing list.
In any given day as many as 6 of these low-paid bitter people can be routinely in and out of your account. They can make notes on your account that may or may not be true. They may or may not be trustworthy. They often have only the most rudimentary math skills and must perform multiple tasks simultaneously while listening to you and people above them all at once, and they are under incredible negative pressure to constantly generate new money account sales and ignore your problems.
Do you think that mistakes can be made under these conditions? Do you think that, if mistakes are sometimes made, these stressed, mistreated, unfriendly people will care about doing right by YOU? (You--the cranky customer with the boring old money?)
Sure they will.
Listen: right now, as I type this, Henry Paulson, the Secretary of the Treasury is busy brokering sales of failing banks (under the table) to other banks that don't even want to buy the failing banks. He's doing this with federal TARP funds so the people of the United States don't freak out so badly about daily bank seizures that we have mass chaos and bank runs like the ones that happned in the 1930s. He did that in November with the bank I used to work for--he brokered a sale with TARP funds to another midwest bank to avoid an FDIC seizure that would have freaked out Wall Street and the entire midwest along with it. Poof! No bank failure!
That's where about half of the $700 billion federal bank bailout has gone so far--to brokering bank sales and shoring up bank balance sheets--not one penny of it has gone to buying up toxic mortgage securities as initially promised--it's all going directly to banks, all to camoflauge imminent collapse. And you don't have to take my word for it either: Look it up yourself. Poke around Google and make sure you have some Xanax handy while you're doing it because you'll definitely need it.
And when you finally do find out where all that TARP money has gone, give Elizabeth Warren, the consumer advocate recently appointed to oversee the TARP expenditures, a quick call and let her know what the hell is going on, because as she herself has admitted on national television, right now the public is being denied even the most basic of disclosures.
Do you find all this kind of an eensy bit disturbing and scary?
Then you might not want to keep you money in a bank.
But don't despair, it's not all bad news. Good news is right around the corner:
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Comments
I knew when you said you were going to write this hub, it would be eye opening, but it turned out to also be jaw dropping. I definitely fit into the #2 category (how fitting) you mentioned. I'm going through a problem getting money refunded due to a debit card number being compromised and I've been pulling my hair out.
This is scary stuff-and I'm hardly being dramatic. Thanks for blowing the whistle on these greedy, uncaring bastards.
Hi! Great hub, and scary, too! My mom worked for a business bank for 30 years and some of the stories she tells regarding employees doing the wrong things, sometimes due to policies from a management that knows nothing and doesn't care, are chilling, also. One way to avoid overdrafts through day to day spending is never to use a debit card, but a credit card instead, or plain cash whenever possible. Yes, credit card companies have their own traps, but at least you're only liable for $50 if it is stolen or if bogus charges appear. And, not being attached to your bank account, your bank need not be involved.
Also, if possible, try to deal with the same people at the bank and be friendly with them if possible. Of course, this depends on turnover at the bank. The branch I go to has the same people, who've been there for the 5 years I've been doing business there so far. That's not to say that I won't encounter trouble in the future, but I think it lowers the odds.
I certainly do agree that there needs to be both credit and banking reform, and collection reform, too, as well as some kind of protection from the financial effects of medical costs not covered by insurance. Seems like a lot of institutions need deep cleaning, and this has been the case all along, not just recently.
Again, great hub!
Pgrundy, so after reading this hub and writing this comment, I am going straight to the bank to withdraw everything!! I have to admit although this was shocking when I sit back and think about it, its not that surprising. I have had two major experiences with banks that were horrific! One of which was when my bank at the time willingly handed over cash from my account to a person with the same exact name without checking the account numbers!!! Of course this caused my account to be overdrawn with checks bouncing everywhere. You would think it would be an easy fix but 3 months later I was still feeling the effects. Thanks for a great hub!!!
Thanks lissie--That sounds like a much saner and kinder system. That's the way it should be I think--they should refund everything if its not your fault.
rockingjoe--The more I wrote the more stuff I thought of--I had to actually cut it short. To be fair, I have my money in a bank and have never had a problem, but I saw SOOOOOO many serious issues that were obviously in no way the customer's fault and the bank was in every case very uncaring and punitive and anxious to exploit the problem for gain rather than solve it. It literally made me sick doing that work. I'm scared now, as I have no health insurance, but I don't feel sick to my stomach about the work I do anymore either. I have to be able to look myself in the mirror in the morning. Good luck with your issue--you'll get something eventually, but it won't be easy.
myway--I agree. I advised LOTS of people to get rid of their debit cards after serious problems and use cash or credit, but to my knowledge not one of them ever took my advice. For some reason people really like those cards--but they can get them into a bad mess. Thanks for your comment!
Triplet Mom--I know, I think once you have an issue it's like you never quite completely recover. I know that, like I said, one of our top sales people said she would NEVER have a bank account again. And there she was hawking bank accounts! The world is a weird place right now. God I hope it gets better but I fear it is going to first get a lot worse. Thank you for stopping by.
Wow Pam,
Thios is scary. I didn't know some of this stuff.
Hope it's not the same in Australia!
P.S.
Congratulations on reaching your 100th Hub. You little All-Star you!
Eric G.
Woo hoo! Thanks Eric! I didn't even notice this was my 100th hub!
Appriopriate somehow...Thanks for stopping by!
Um. #4. Wow, especially on the last part.
But I can second the evidence presented about the mistakes, personnel and the access. I worked as a bank researcher and the amount of things that are very irregular--lost signature cards, signature cards (your legal document of ownership to your account) in messy heaps on vault floors, the amount of info. available to just anybody at one's finger tips would curl your toes.
I would like to hear your take on internet banks, though, Pam-- Since you have obviously done your research on this.
Lita- Is their anything that you haven't done?...LOL
Pam- WOW!! Their ought to be a law against these rules "1) making money deposited on a Friday afternoon (in person) unavailable until Tuesday of the following week, 2) making ATM deposits not available for five days no matter whether the deposit was cash or check, and 3) dispensing cash at the ATM even when it isn't in the account so that overdraft fees can be charged on the withdrawal."
Maybe one of these days we may have a class action law suit if this kind keeps persisting. Great hub and certainly thumbs up from me.
Hi Lita & CW,
I don't really know very much about online banks except their interest rates on deposit products tend to be lots higher, and not too long ago a big one went bust. Beyond that, I don't really know.
I would like to see some of these practices regulated out of existence. The fees are exorbitant and unreasonable in my view, and the deposit policies are very deceptive. It really makes me angry.
Interesting Hub. It explains a lot about how I was treated by banks for years with rudeness. I honestly thought it was because I was a small customer with a relatively low paying job who paid the bills and didn't have savings afterward, during the 80s. But it's clear that this kind of treatment was more widespread than I was aware of and if it's now extending to people who have major investments -- people whose leaving the bank would hurt it hard -- that their bad policies have been cascading and running them into the ground.
There is an alternative to The Sock Under The Mattress that I've had MUCH more success with. Credit Unions. I have my account at a credit union. I haven't had any of those problems with using my debit card to make online purchases, admittedly most of them are at the same very few companies where i've got a good relationship with them and *they* have good service.
I've always had good service, accommodation for my disabilities and help from my credit union. This is why I'm still using it and building up some savings there. But I've also always had my gypsy savings account -- tools and supplies to create things that I can earn money with. Art supplies pay for themselves.
I used to work for an International Bank before as a Marketing arm for loans. Although, this is a different subject but I can relate to how brutal they are. In a bank, mathematics is the game, if you don't ask so many question regarding fees and interest, you wouldn't know that the interest and fees are actually higher than the money you borrowed.
I left 3 years ago, I couldn't bear the thought that I am living my life by convincing people to live their own lives in debts. I believe that we should all live within our means but if I never left that job, I cannot apply it to my own. The lesson is alwyas more valuable than money.
Your hub is an eye opener. Excellent!
Great hub, pgrundy. I've only had a few problems with banks over the years,but in every case where there was a problem the banks handled it badly. Once I went into my bank to make a complaint and they refused to give me the name and number of the bank president. I must say I think the problem is not any different with insurance companies and brokerage houses. Bottom line, I'd say, is don't put all your eggs in one basket. Thumbs up!
Well I don't really trust banks. But it seems I have no real alternative to keep my money right now. If I keep it within reach I'd just spend it a lot quicker LOL. The interest in banks are a joke - so I do try to keep my money 'active' by reinvesting it in profit inducing endeavors instead of just letting it sit. Thank You for your wonderful Insider tips. This is definitely an issue that needed to be aired out in the open.
Pam: As a former bank employee with international banking that serviced very wealthy clients, I remember thinking how dangerous it was to have access to confidential information such as social security numbers, passport numbers, and addresses, if it fell in the wrong hands; however, the bank employed control via reports that showed the user id, login time and accounts viewed as a routine audit, not that it deterred the occasional unscrupulous behavior that led to theft from a bank employee, but they got caught. I am glad I do not have an account with my former bank because I wouldn't want a former bosses or coworker checking into my business should they want to, its that easy. The system lets an employee check on accounts from any branch in the country and world. And as for overdrafts and checks being deposited with domestic accounts- we lost money in OD's because my bank did not deposit (we have a merchants account) our customers batches (sales) on time, so the routine debits such as the fees for website hosting, inventory purchases, etc ended up being returned, and redeposited. There was no way to fix it with the bank, we had to pay over $400.00 last month in OD fees. Good hub!
Hi Robert--Yes, many people swear by their credit unions. I think they are a bit better--at the very least they usually are small enough to treat you more respectfully. Thank you for that suggestion.
Sheena--You are so right. If you really read through any mortgage document, it is shocking how expensive it is. They always act like they are doing you this big favor, which in a way they are I guess because you end up with a house--you pay that back over and over.
William--Good advice! I'm not sure that, at the moment, anywhere is a truly safe place to park money,
Multimastery--I know, I'm the same way. I keep my money in a bank. But I've been rethinking that lately. Thanks for your comment.
VioletSun--You know we are on the same page. I know the have the tracking system, but even so, as you say, anyone can know all you business with very little clearance. It's disturbing. Thanks for commenting,
Credit unions have two things going for them to keep them both honest and polite.
One is that they are smaller generally. You will know the employees after a while. They work hard on retention, they thrive on it.
The big hidden reason for that is your savings account, which is a "share" account. They are owned by YOU. They have to treat their customers as shareholders because that's who the shareholders are. Drive away a bunch of us and the place would collapse.
My savings plan is a small individual effort to help keep this sane institution with good customer service and from all accounts a sane workplace for the employees alive and well. I think that difference in quality and service is going to mount up to something major, because credit unions are real competition.
The one I used in Minnesota had this strange little plaque up. Series of them. For three years running they won the "Best Psychologically Healthy Workplace" from a local psychology organization. I noticed they earned it by looking at how the employees talked to each other, how they looked at the manager, whether they were afraid to call in the manager for a problem. They treated me well when I was a crippled freak with a tiny Social Security account -- and treated each other well while mobilizing the staff to help me out.
I liked the idea that my money was being handled by rested, competent people who aren't wasting their energy playing office politics territory wars. The whole approach in a credit union is different because they never forget who the stockholders are. Me, and those other people in line. People come back to them the way I do because of that sense of shared ownership and being treated well.
I didn't even look at the numbers for things like interest rate on the savings. I looked at "is it a credit union that's going to treat me like a human being?" first. I don't need that stress. But from everything you're saying, even if a bank has slightly higher numbers than a comparable credit union you'd lose it again in errors being resolved against you and the bank acting like you have nowhere else to go.
By saving, I'm investing in it. I would love to see credit unions get stronger through this rough patch. So in a sense, my savings is something that I put at some risk in order to hang onto this service. I did need something with a debit card so that I could shop online, there's no substitute for that. But I had a nightmare with banks all my life and your Hub has shown me why.
Banks don't get bad policies like that overnight. The bank that did would've gone out of business a day after. They creep in a little more every year till the present ludicrous situation - it used to be toasters and other practical appliances back when I was young, now it's just some coaster? Yeesh. But I can see how their strategy works because if they charge fees every time for setup and for leaving a bank, they can keep the same pool of people who need some form of checking account or savings paying through the nose again and again.
Hi Robert,
You wrote, "I didn't even look at the numbers for things like interest rate on the savings. I looked at "is it a credit union that's going to treat me like a human being?" first."
That has become my first question when it comes to where I spend money or do any kind of business too--I see all of this greed and rudeness as a direct effect of companies getting bigger and bigger and funneling whatever profit is made to the very top. That business model insures an incompetent, miserable workforce that is constantly turning over, lots of loss from inefficiency and employee bitterness and theft, and lots of lost customers. Sprint lost so many customers using this business model that it had to create a whole new department to try and get some of them back, and it wasn't very successful. I call this approach "The United States of Who Gives a Sh*t."
When employees are treated abusively they pass it on to customers who try to go elsewhere (if there is somewhere else to go). There have been a few instances where employees actually banded together and purchased a business that was going under (this has happened in several factories) and it actually works well because each employee has a real ownership stake in the company succeeding. When you marginalize your own employees you cut your own throat I think--but CEOs are so insulated from the consequences of their decisions these days that they really don't care. They get the same money no matter what happens--it's written into their contracts before their first minute on the job.
I'd like to see a return to more local economies, smaller profit margins, lower CEO salaries, smaller businesses, and a more personal and authentic approach to service. Lots of people would like to see that I think. Right now big corporations are buying off our government to make that impossible. But if they keep this up they will eventually fail. I think that wouldn't be all bad.
Thanks for your thoughts on this Robert. You always have such positive things to say.
The stories that you've shared, Pam, are all pretty scary! We bank with a credit union, and both my husband and I have had issues. One time I was looking at my account online on a Monday morning and I saw a $200 withdrawal dated the previous Friday that I definitely had not made. I called them, and they said that the computers had gone down the day that the money was withdrawn, so it was probably supposed to have come from someone else's account, but was taken from mine when the manual entries were made when the computers came back online. They fixed it promptly, but it still shocked me.
Another time, my husband and I were out of town and we stopped to put gas in our rental car and his debit card was rejected, only 45 minutes or so after he had used the same card to pay for dinner. The credit union's service center was closed, so he had to use a credit card instead. The next morning he called in, and was told that the computer system had automatically disabled his account because it saw an out-of-town charge. I guess it's nice that they're worried about security, but that would've been a huge inconvenience if we hadn't had another method of payment.
Most recently, we're in the process of buying a new home, and the local bank that we're using for the mortgage is charging us $300 for an appraisal that wasn't even done. An appraisal had been completed for another set of buyers that pulled out because they couldn't get financing about 2 weeks before we wrote our contract, and the bank has admitted that the name on the paperwork is simply being changed, but they're still charging the full fee. My husband was about ready to tell them to shove it based purely on principal (why should we pay full price for a service that wasn't fully performed?), but we really want the house quickly and it's the same bank that is handling the foreclosure with the previous owner. We're going to pay it, but my husband has already started writing the letters that he intends to send to the bank's president and board of directors.
The banking industry truly is despicable.
P.S.
Love the picture at the top of the hub.
Hi Em Writes!
Wow, your stories are pretty scary too! They don't surprise me though. Our computers used to go down regularly but we were not allowed to tell callers that the computer systems were down because corporate HQ thought that scared people. So we were required to say, "Our systems are updating right now and I am unable to access your account until they finish." People figured it out though and would say stuff like, "Oh your computers are down again. Man, they sure go down a lot!" And they did!
The most frustrating thing for me was that I was supposed to be a customer service rep but at least 30% of the calls I got I had no idea what was wrong, no way to find out, and what's worse, no one cared. If I spent more than 180 seconds trying to find a solution, my supervisor would reprimand me--like, get off that call, get on to the next one. So most of the time I really couldn't help people at all--My task was to divert their attention to buying some other bank product, like a credit card, a loan, a CD, a home equity line... It truly shocked me how open management was about not caring about customer service at all. They'd give it lip service every so often, but on many occasions they came right out and said, don't help those people, they don't have money, get rid of them.
I found that shocking.
It also became clear to me that most of the banks fee policies hit poor people much harder than well-to-do people, and I eventually came to the conclusion that the fee policies were designed to weed out poor people by taking every opportunity to get them into trouble with their accounts, charge huge fees, then shut down their accounts and turn them over to collections. They couldn't legally just say, "You're too poor, You can't have a bank account." But they could make it so unpleasant and inconvenient that poor people didn't last as customers.
Not like they were all that nice to rich people either.
The banks deserve the trouble they are in right now, they really do. Unfortunately it's going to hurt all of us, not just the guys at the top. Thanks for your comments!
I keep my money in my local credit union, in which I am part owner. They bent over backwards for me last spring when my business was assassinated and that precipitated significant financial heartburn. Not so the bank I was at before. First it was First Interstate, that got bought by Wells Fargo and we saw the quality of service drop the minute they changed the sign and the nickel and diming start. Thats when I moved to the local credit union.
Thank you hot dorkage. I'm sorry about your business, but I'm glad you found a credit union that treats you well. Nickel and diming is a good way to describe it. Thanks for stopping by.
VioletSun--You know we are on the same page. I know the have the tracking system, but even so, as you say, anyone can know all you business with very little clearance. It's disturbing. Thanks for commenting,>>>
My tracking system comment was for the benefit of the readers of your hub, as I thought they may find it interesting in knowing how banks do their "controls". Yup, its too easy to do harm with all that information. One banker, went on a shopping spree, redecorated her entire house with client's credit cards- don't know how she expected to get away with it, if the furniture was being delivered to her New Jersey home. In the midst of this, those who handled the credit card dept, which included me, were interviewed by the FBI, thank God, none of us were implicated in error.
OMG--That is so nuts. But it doesn't surprise me. I got a call once from a girl whose friend was a teller and had looked up all her financial info and was torturing her about what she spent this and that on and how much money she made and so forth--Yikes!
Pgrundy, definitely a good idea to keep money in a mattress, all things considered. But maybe not all your money in the same mattress, in case your house burns down. Maybe buy several different houses, and keep some of your money in a different mattress in each house!
Since when do people who lend other people money get labeled consumers? If you deposit money in a bank, you just lent money. That's pretty weird, right there. To avoid entering into adhesion contracts, you should see if the entity you are doing business with will negotiate its fine print contracts with you, line by line. If they won't, tell them you're not a consumer! You don't sign contracts that weren't tailor-made for you! They have to meet you at least half-way.
And while you're at it, why not write a hub about how we shouldn't check into hospitals unless they, too, are willing to negotiate the terms?
"If you deposit money in a bank, you just lent money. That's pretty weird, right there."
Wow, Aya, that is so true. I never thought of it like that.
I agree about the hospitals too. It would be hard for me to write that hub though--I went to a hospital in an ambulance in May, as it appeared I was having a heart attack. I wasn't in a good position to negotiate terms at that point. Seven months later I try not to think about it--they got most of the $15,000 they charged to not find out what was wrong with me and I learned that I'd better stay healthy and stay out of hospitals, so we all got something out of it, but I do feel they got more. Very depressing. But that's a very good point--Actually, they won't touch you until you sign a release. The PARAMEDIC who brought the stretcher into my workplace made me sign a release before he did anything else.
I guess I could have refused to sign it. Oh man, I'm getting depressed just thinking about it again... Thanks for your comments!
I just sent your hub to a friend of mine it was a good read. I myself don't have a bank account and pay all my bills with money orders for some of the same reasons you posted on your hub. Banks have messed around with me long enough. It's hard to build my own personal fortune when I have someone in my pocket digging out my money.
So I said forget about it, I'll hold my money. That's part of the reason America has the problems it has, people make money, put it in the bank and turn around to spend there money and that money's not there.
insufficient funds
insufficient funds
insufficient funds
insufficient funds
After this happens come the retailers. Yeah, and don't they have bank accounts as well?
Retailers have bills and lines of credit don't they? Well how can they meet their obligation when the individual isn't buying a product or service, when he/she is dancing around with the banks arguing over fees?
Hi What's News--I agree that the fees are exorbitant and they do try to trap you. Some people have a harder time avoiding overdraf fees than others, but even so, I don't see why they need to charge someone hundreds of dollars in these fees. Good luck to you. I told people close their accounts all the time. I saw people every day who paid thousands a year in these fees and still had active accounts. That's nuts.
First - thank you for posting this. This should be on the homepage of hubpages. You would think that most of the questions and concerns would be the first thing on a customers mind when chosing a bank (or credit union) but i have seen from my circle of friends a "closer is better" state of mind. Big pillars our front and 2/3 stories must mean "these guys are serious". Size doesn't matter in this arena however.
I am with a small credit union as well, but even those you have to scrutenize. If you are stocking your money away I want as much influence as possible (even if it is a small percentage) and all of my questions answered. This was a great posting with even better comments - thank you for a more detailed inside scoop with points that I never really gave much consideration.
@roberts - great dialog - enjoyed reading and agreeing with you
I have been talking about this with a friend of mine lately. I am glad you wrote it from the perspective of a person who actually worked in a bank. It makes it so easily understood how banks and legal theives.
Pam, this is scary stuff. I think our UK banking system is more like the Australian system as described by Lissie earlier in the comments, but I know that there have been reports of off-shore banking call centres selling customers details. I don't know who picks up the tab for that, and I doubt it would be the customers ultimately, but you do have the stress and worry of identifying the problem, and proving that your identity has been stolen, then attempting to get the money back.
The credit unions sound much more like the real deal. It certainly does seem to be the case that the larger the enterprise, the less care and consideration is shown to either customer or employee.
I completely understand the comments about the bank. The last bank account I had managed to make an error on my account that cost me a lot. All my checks for the month had already cleared and I had about $20 left. I wrote one more check which was less then the $20. Three days before the check cleared the bank they charged me an overdraft fee, eventhough there was nothing there to clear over. No checks. No debit card use. Nothing. This overdraft fee from nothing caused my account to be overdrawn so three days later when the check made it to the bank, my account was not just charged the amount of the check but another overdraft fee. I never wrote another check or used my debit card from that bank account again and in the end it still cost me over $300 in overdraft fees because they charged me before my account was overdrawn. I makes me mad that if they wouldn't have charged me it in the first place then my account would have been fine.
Hi livelovecoffee--I love your avatar. Thank you for your comments. It sounds like lots of folks here agree that credit unions are the way to go, but I'm still leaning toward my mattress.
Sir Dent--That's a good way to put it--legalized thievery. Thanks for your comment.
Amanda--I know there are strict rules about what info can be sold and what can't, at least here in the U.S., but most people don't realize how public their lives are, even the parts they think are private. It's pretty creepy really.
Moonfrog--I saw you exact situation so many times. What happens is they make up all these weird rules that are not what you would expect and which make no sense--it's kind of a game--and once one fee hits, as you say, you can end up with a dozen. That's what they are aiming for--they actually sit around thinking up ways to make sure that happens. Sorry it happened to you--no one really deserves that kind of exploitation.
I work for a bank and while there are some draw backs to banking and definately steep fees, there is one thing that all of us should keep in mind. The biggest stumbling block that I've seen for bank customers is that they do not pay attention to their finances. I didn't realize what I dummy I'd been until I started working at a bank. There is alot of information available about the products banks offer and how they work. Too many times I've encountered upset customers who essentially brought trouble on themselves because they had no idea what they were doing, and then they expect their bank to clean up the mess for them.
pam...you are an angel for pointing all this out to us...i reckon i might have added more zeros to that toilet roll...ho ho...may you have pleasant holidays and recieve lots of gifts...pylos
lusSmee--Good point! Most people don't call the bank unless there is a problem, and lots of times it is a self-inflicted one. Not everyone can manage a checkbook. What shocked me was how long people would keep one even when they were paying literally thousands a year in OD fees.
pylos26--Thanks! Happy Holidays to you too!
And I thought I know it all! That scary, Pam...
Where's the next hub? Waiting for more precious gems of wisdom.
Hi Mish & What's Next? It IS scary--I'm so glad to be out of there! Thanks for stopping by.
Another amazing hub although it was a bit scary to read first thing in the morning - lol! You have amazing insight and the ability to communicate it well. I always enjoy your hubs but like this one in particular - thanks!
Thank you Susan M! I thought it was scary working there. It was easily the worst job I've ever had, and one that I will daily to remind myself that things can always be worse. No wonder these banks are going under. The woner is it didn't happen much sooner.
Your writing is always great pgrundy. Informative without being trance inducing.
I haven't used a bank of any kind for years. My wife still maintains a checking account with a very minimal sum in it for paying a few bills but she NEVER writes any checks.
I say:
Money, money, go away. No more fees. We will not pay.
Representative currency was a bad idea from the start. Hopefully the demise of capitalism will wake everyone up to the fact that it's worthless anyway. It's been created out of thin air for centuries; ever since the goldsmith bankers created the fractional reserve system. Actually it goes back even further but that's where it relly got out of hand.
Hi CWB--The current financial situation in the U.S. does have the feel of a major collapse, even though the news keeps spinning it as a 'recession.' I'm coming around to the view that, longterm, a major collapse might be necessary and evey positive. The short term sucks though. Thank you for your thoughts and for taking the time to express them. Happy Holidays. (o:
Wow pgrundy,
Another GREAT hub! Gosh, I was about ready to go draw what little money I had out tomorrow, then I realized I do my business with a credit union. I still am filling a bit leary though after reading this, but I pay most of my bills online. Awww crap, now I am thinking that this is probably a terrible idea too. You have got my head spinning now.
You are the best. Your honesty and awareness is amazing. I m from Michigan too, now living in San Diego. If you ever visit the west coast, you got me girl. When the revolution begins, I am at your side... signed a PATRIOT
I don't think I am going to be able to sleep tonight! YIKES! What about a Swiss Bank Account? What am I going to do with millions I plan to win in the lottery? :-)
very interesting
Hi whoelsecoulcibe, Denise, Fran & Dave--I guess my slant here was a tad bit negative, but actually, I left out a lot of other bad stuff. If you look at the condition the banks are in right now, I think it does lend creedence to my negativity. But most people do not have these kinds of problems--I never had any problems with my own bank. The thing is, if you do have any problem, they don't care. They really don't. It should be their slogan: "Behemoth Bank--Where We Don't Care About YOU!" lol!
Great information, I have, like most I think, had this very thing happen. It does seem odd that the bank is going to charge you fees and take money from you, when you didnt have it to beging with. Most all of us make a mistake ever now and again. Another thing that surprise's me is the amount of the bonus' the "presidents" get! Maybe thats where they get the money to give all the "presidents", from overdrawn fees!
Great hub.
Thanks jmichaels--I can see charging overdraft fees, and I can even understand making the fees unpleasant enough that people avoid overdrawing their accounts so they won't get charged. But they go so far overboard it's ridiculout, and then to charge people when it isn't even their fault--it just seems greedy to me. Thanks for your comment!
Time to get a new mattress :(
LOL! Amen. (o:
Hi PGrundy, Great article there though I am not so against the banks.
Interesting hub. I worked at a bank years ago. Fees weren't the rave back then. I will say that if you don't invest your money somewhere, your money is not going to grow. You can invest in Art, land (not houses but land - all rea estate does not involve buying a house), antiques, etc. There are seveal ways to grow wealth but sticking your money in a sock is not the way to do that. When you look back inside the sock you'll still have the $20 you stuck in the sock 10 years ago. Yet, if you invest wisely, after 10 years that $20 could be more than $200 - $500.
Happy Holidays!
Dee blogging it up!
Hi Denise--That is a really good point. Savings accounts should actually be called 'losing accounts' because they don't even keep up with inflation.
Great hub. I loved how you managed to mingle seriousness, disdain, and even some slanted humor together to make your points; it made for a smooth read.
Point number 4 was what really intrigued me, as I am sure it did most people. I'm sure you could create an entire hub around that one issue. I know I would love to read it. Do you think there is a serious threat of massive bank runs actually happening?
Hope to read more :)
Hi Sput--I don't think there will be bank runs because I think right now our government is working hard to prevent that by camoflauging the extent of the mess the banks are in. When the U.S. steps in save Citi, one of the largest banks in the world, by pumping $120 billion taxpayer dollars into it without even asking taxpayers if it's ok with us and without providing any transparency to speak of, you know things are pretty bad. And by all reports, Citi is probably not finished sucking up government money.
Most of the TARP money released so far went straight into retail banks as cash infusions, and almost all of them say they can't account for where the money went and shouldn't be asked to account for it. Congress is in such a spot now that it is considering not releasing the other $350 billion to Paulson. We have no idea were that money all went AND the financial system is still not fixed. Credit is still frozen and the underlying problem with the housing market has not been addressed.
I could write a separate hub about that I guess. Thanks for the idea!
nice
Hey, I myself is a banker here in the Philippines. Your number one issue, seems to me that banks are uncaring. Not so. In our banking system, we refund the charges to the customers if it is due by system failures of course after due investigation. You will not be charged to things beyond your control.
While you displayed or wrote something true in your #2 issue, still it isn't an absolute perception. Whether you have old or new money as you put it, we still treat clients with respect and courtesy. They are the reason why we exist. The reason why we have relationship managers.
The adage is : "People bank with people."
Choose the bank with a good history and standing, then try to assess the employees if you want to do banking with them, third observe their service if it is pleasing to you. If all else fails, better leave that bank.
Where else would you place your money? You have a lot of choices, but the two top most places are: Bank and Business.
Never had the problem.
1) All deposits initially into a credit union account
2) Prompt distribution of deposited funds to multiple locations: (see below)
3) all purchases done via Visa and American Express
4) pay off cards, in full, every month. (avoid interest charges)
A) long term savings in multiple institutions, all over their minimum level to avoid fees and under $100K insured values
B) small deposit, every month, to keep long term savings people off my back, the accounts stay active and avoid fees
C) all assets are distributed to multiple locations to mitigate against possible bank failures and minimise impact to future growth.
D) always looking to move the money to a new account for more interest, provided fees and charges are the same or lower.
The money is still safer in the bank, than in the freezer! Oh, I do keep all of my debt in the one location (and no, I don't care if that bank folds and I lose my debt)
Well banking is a dead industry clearly designed to profit none other than the namless, faceless entities that are bankrupting the nation.
at 1% interest and 18% credit card interest...why would anyone save? Ever heard of inflation?
Great hub, great hub!
Hi Yankeeroo--Yes I did encounter lots of people who did what you describe. Not everyone makes enough money to do that. But if you are disciplined and willing to keep moving your money around, then as you say, you probably won't have a problem. Right now CDs are a better deal than the stock market for most people. I don't feel that a person should have to play that kind of constant game with the bank to be treated decently though. Eventually, dealing with so many financial institutions, something will indeed go wrong and you will be fortunate if you are treated respectfully when it does. But it sounds like it's working for you, so have at it! :o)
patkegmak--Thank you for your comment. I do think banks have gotten to the point where they only truly benefit the few people at the top who run them. I would very much like to see an investigation done on the use of the first half of that $700 billion. I think once we know what happened to that money, lots of people will become quite angry. That's why the information is not being made available.
This is soo wrong!!
I only have one pence in my bank account, and never ever have more!! I cash all my cheques at a cheque cashier shop, which does cost me, but persoanlly im not a bank fan or trust employess working for them.!<
I'm reminded of a pre-crisis "discussion" my wife and I had with a major bank. We wanted to stop getting reminder calls on a loan before it was past-due. The bank called it a "courtesy," we called is a nuisance.
When we threatened to take our business elsewhere, the customer disservice rep said, and I quote, "So what. We'll end up acquiring whatever bank you take this loan to."
Wonderful. I fired off an angry letter. That action, by the way, carries as much weight as a hummingbird's feather.
Nice detailed hub!
Hi Francis,
Wow, that was a horrible remark that rep made to you, but it doesn't surprise me. The culture of those places encourages aggressive and inconsiderate behavior or rote robotic responses--usually reps who are successful learn to use both. Most CSRs are so resentful of customers that they become expert at finding out just how far they can push rudeness without getting fired, and there is a certain amount of coworker 'appreciation' that comes with really 'burning' someone that a rep feels 'deserved' it. Usually that just means that the rep has to answer a certain complaint so many times that some poor person repeating the same thing is in for it--to the applause of everyone nearby. Really the problem is the bank has instituted an insane policy that the rep then has to pretend is reasonable, over and over and over again.
I find it all appalling. But the bank creates this environment--the bank creates this rudeness and even winks at it buy creating these crazy-making policies and then hiring people to enforce them and take abuse at very low wages. Of course those people are going to develop the hide of a rhinoceros or else leave. Those are the only two choices available.
The bank I worked at made the same 'courtesy' calls and people HATED that. I was sympathetic--who WOULDN'T be annoyed by such calls?--but I was not a 'successful' rep. Thank God! LOL!
Thank you for sharing your story. All the best to you.
I understand that the Bank you worked for was mistreating employees as well as customers, but i don't believe you should lump all banks into that mold. I work for a small community bank who treat their customers with respect and believe in building relationships. It seems that the larger banks tend to forget that the customer is the one who allows them to exist. I don't think we all should be running to the bank to remove our money. There are lots of choices out there.
Good point ladybugblues. Thank you for taking the time to point that out, and good for you bank, treating its customers appropriately!
This is scary. I'm stuck with banks for a while as I work to eliminate the mountain of debt I created putting myself through school as a single mom with no child support. I'm paying it down aggressively, though, and will be proactively working on a new strategy to not be so reliant on these banks. The new strategy seems to be to send out plain junk-mail type letters with no return address (that they hope you'll throw out without looking too closely) stating that if you don't respond in X amount of days your nice low interest rate will go up to 20% or so. That's more that three or four times what I'm paying now, with no late payments and larger than minimum payments. Thanks for another great article.
Hi Jules! College debt feels like it will never go away. It took me over 15 years to pay it all off, but I still would do it all over again. I love college--if I were rich (I'm not!) I'd be a perpetual student. Thanks for sharing your situation, and good luck!
Online banking have really big charges when transfering but it have all the convenient.
Thanks pgrundy! Another insightful hub.
For one, I also have some unfortunate shortcoming using the debit card. I did an online purchase and press the buy button more than once since the browser did not respond right away. What follows is a few unproductive hour of rectifying the mistake.
Thanks for this insightful Hub!
Thanks livelovecoffee and adelacuesta--Yes those debit cards can be killers! That happens too often, and then you get stuck with the costs.
This is a very comprehensive work, pgrundy. It's not everyday that one gets to read a piece as well written as this. I agree that one's money is not really save in a bank, but where else is safer, :) Thanks for sharing.
Thanks Spin Ready--Now there are rumblings about nationalizing the banks here. If they'd have done it a year ago we might be $700 billion less broke. That, or the whole country would be bankrupt now. Thank you for your kind words.
this is very informative and an eye opener.
i do have a savings account. this thought had crossed my mind several times and this hub had me thinking again of considering not to put my money in a bank anymore. but money disappears faster when in my hands :-D
Me too bingskee, me too!
Thanks for sharing this.
Google and watch "Money Masters" and you will know why the banks act like this...let me know what you think. hoffman.brie@gmail.com
Thanks for the useful info. Thanks.
I have considered this many times and I realize that it only takes one disgruntled bank employee to expose all the bank users to all kinds of headaches. Of course when it comes to protecting yourself I do not belief there is something you can truly do to keep from losing your finances or identity. There are so many ways to rip a person off you can't cover all of your bases and still function in society.
Good point Erick. I think your are probably right.Thanks for your comment.
i am currently fighting a bank who decided to take away my credit after checking my report and decided that i was way over limit... after telling them that is unacceptable they absolutly dont care. now my payments are tripled all fees and will surely increase more and i have no credit they closed all my checking and savings accounts i also had with them and liquidated most of my stock i had in there brokerage account... this is bank of america by the way... i have reported them to the better business bureau with no outcome they just keep sending me the same bs and told the bbb that they sent me a response in the mail which i was sure to report back was a rule book and there accounts. now they dont seem to care and im sure my bill keep accelerating today they wouldnt even let me sign on to my online account page when i was checking to see what else they could have done. in all this i lost 2500 dollars from my checking and savings 500 in brokerage and over 500 in fees and accumulating. but what goes around comes around and im looking forward to seeing some people fired and a large settlement hopefully i can break the whole company and ruin there lives like they have mine for the last 6months or so.
Cat--I am so sorry. They are thieves. Well, really I can't say what they are. I don't have language bad enough to describe it. It's cold comfort I know but you DEFINITELY are not alone.
Lissie says:
11 months ago
There was a news story in Australia about a company who sells software which guarantees to find errors in mortgage statements - if they don't find any errors they give you A$200! At least in Australia if you prove a bank has made an error they have to refund the money and any subsequent fees ASAP!
Ecellent hub as always