7 ms·

I concur with this one. And this isn't the worst of what these large banks do. How about where they have a computer program which re-orders transactions (out of

by keltex 17y ago

I concur with this one. And this isn't the worst of what these large banks do. How about where they have a computer program which re-orders transactions (out of their normal chronological order) in such as way as to maximize overdraft fees. For example, let's say that you have $100 in your account and pay transactions of $20, $50, and $110 (in that order) with your debit card. Instead of letting the first 2 go through and then hitting you with a $30 overdraft fee on the last one, or maybe even rejecting the charge, they instead put the $110 charge first. Charge you a $30 overdraft fee and then since your account is overdrawn, hit you with 2 more $30 fees for the $10 an $20 transactions. The backlash against this sort of behavior has made the banks back off, but do you really want to do business with an institution that treats the customer this way?

petewarden 17y ago
I went through a somewhat similar nightmare with Citibank years ago, which prompted me to switch to a credit union. I've never regretted that decision, they've been great: - There's real, trained staff both at the branches and manning the phones. They have the authority and motivation to sort out problems for you. - I can use almost any other union's ATM with no fee, they're in a cooperative network, I don't even have to get a refund. - I know my deposits are funding straightforward loans, not financial shenanigans or empire building by bank CEOs.
anigbrowl 17y ago
This practice looks set to be outlawed soon, to the the banks' chagrin: http://www.economist.com/businessfinance/displaystory.cfm?story_id=14710667 http://www.economist.com/businessfinance/displaystory.cfm?st... I had an entertaining episode earlier this year where I went into a bank to dispute about $100 of charges that had been levied this way; after some effort, I persuaded a bank official to handle the call on speakerphone - literally, by refusing to take the handset she kept trying to hand me and insisting it be on speakerphone - and letting the phone staff explain at length about their large-to-small temporal reordering, before pointing out that I had made a cash deposit both larger and earlier than the withdrawals. And the phone people still didn't want to back down until I produced a digital recorder and pointed out that I'd recorded the entire conversation. Following this debacle I had an illuminating conversation with the manager at the local branch. Part of the issue (with many large banks) is that they've internally reorganized so that the branch network is a separate company from the bank, and the outrageous overdraft fees, $3 ATM fees etc. are what finances the branch network. This allows the bank to claim to customers and regulators that they don't make any profit off these fees (because technically the fees are collected on behalf of 'Megabank Branch Operations LLC') while at the same time claiming to their investors and bondholders that they've cut their expenses to the bone (because the branch operations no longer show up as an expense on their balance sheet, whereas the profits from things like mortgages do). So when you try to get a fee reversed, neither the phone nor the local branch people want to do it because the reversal will be charged to them and reflect on their performance record. Local branches now have about as much influence on The Bank as an individual fast-food restaurant has on the franchise company, ie none at all. Plus, anyone who went to work for a bank at a local branch with the aim of eventually becoming a banker has been suckered, since local banking is now devoted to basic customer service and sales of financial products but they have little or no discretion the handling of customers' accounts. Working your way up the corporate ladder is now out; if you want to be in banking rather than customer service, you need to get an MBA and re-apply to corporate, hoping your time in local branch banking will give you an edge over other candidates - but word is that customer-facing experience is actually regarded as a disadvantage. tl;dr the modern model of retail banking is to own the deposit/payment system, not get your hands dirty with it.

by keltex 17y ago

petewarden 17y ago

I went through a somewhat similar nightmare with Citibank years ago, which prompted me to switch to a credit union. I've never regretted that decision, they've been great: - There's real, trained staff both at the branches and manning the phones. They have the authority and motivation to sort out problems for you. - I can use almost any other union's ATM with no fee, they're in a cooperative network, I don't even have to get a refund. - I know my deposits are funding straightforward loans, not financial shenanigans or empire building by bank CEOs.

anigbrowl 17y ago

This practice looks set to be outlawed soon, to the the banks' chagrin: http://www.economist.com/businessfinance/displaystory.cfm?story_id=14710667 http://www.economist.com/businessfinance/displaystory.cfm?st... I had an entertaining episode earlier this year where I went into a bank to dispute about $100 of charges that had been levied this way; after some effort, I persuaded a bank official to handle the call on speakerphone - literally, by refusing to take the handset she kept trying to hand me and insisting it be on speakerphone - and letting the phone staff explain at length about their large-to-small temporal reordering, before pointing out that I had made a cash deposit both larger and earlier than the withdrawals. And the phone people still didn't want to back down until I produced a digital recorder and pointed out that I'd recorded the entire conversation. Following this debacle I had an illuminating conversation with the manager at the local branch. Part of the issue (with many large banks) is that they've internally reorganized so that the branch network is a separate company from the bank, and the outrageous overdraft fees, $3 ATM fees etc. are what finances the branch network. This allows the bank to claim to customers and regulators that they don't make any profit off these fees (because technically the fees are collected on behalf of 'Megabank Branch Operations LLC') while at the same time claiming to their investors and bondholders that they've cut their expenses to the bone (because the branch operations no longer show up as an expense on their balance sheet, whereas the profits from things like mortgages do). So when you try to get a fee reversed, neither the phone nor the local branch people want to do it because the reversal will be charged to them and reflect on their performance record. Local branches now have about as much influence on The Bank as an individual fast-food restaurant has on the franchise company, ie none at all. Plus, anyone who went to work for a bank at a local branch with the aim of eventually becoming a banker has been suckered, since local banking is now devoted to basic customer service and sales of financial products but they have little or no discretion the handling of customers' accounts. Working your way up the corporate ladder is now out; if you want to be in banking rather than customer service, you need to get an MBA and re-apply to corporate, hoping your time in local branch banking will give you an edge over other candidates - but word is that customer-facing experience is actually regarded as a disadvantage. tl;dr the modern model of retail banking is to own the deposit/payment system, not get your hands dirty with it.