I read a lot of other personal finance blogs, as I think getting different voices, opinions and thoughts on various items is great. I have quite a few (see my blog roll) that I love and others that I read in passing. One topic I see time and again are posts that tie back to complaints about banks.
Bank of America seems to take the brunt of bloggers ire, but it seems like many banks catch the rancor. The complaints seem to boil down to a few common themes:
- High fees
- Poor customer service
- Complaints about banks having taken bailout money
If you've complained about banks or get fired up about banks, I have bad news for you: You're wasting your time.
Now, don't get me wrong, I'm normally a big advocate for complaining when you aren't getting good service or good value for your money, so it might seem like my advice is being overly dismissive or favoring the banks, but I assure you it's not. What it is simple truth.
Here are a few things that the average (or even the above average) person needs to realize about the banks, and I'll start with the bottom bullet out of the items above and then move to more general terms:
- The bailout is old news – While it might anger people that banks took bailout money from the government (and if you read the comments of just about any article written about the banking industry in Seeking Alpha, it certainly is), the fact is that the banks have moved on. While you might be aghast to this day about the audacity of the banks having taken this money, I guarantee that there is not one single meeting being called, one single resource being dedicated, or any amount of money spent at the banks to deal with this issue. Why? Because it's in the past. The banks took the money, most paid it back, and they've moved on. Any and all resources are being dedicated to things that the bank is doing today or plans on doing tomorrow. They probably cared a lot about the bailouts from 2008 through 2010, but they no longer care, and they never will again.
- The banks don't care if you like them – Many people harken to the old days where you had bankers that, if things are to be believed, acted like George Bailey in ‘It's A Wonderful Life' where he cared about each person he did business with, and not only cared about them, but made personal sacrifices to ensure that his customers could depend on the bank. Folks, this doesn't exist any more. To expect that is silly. These are corporations and they are responsible to deliver profits. Banks get a lot of ire, but the fact is, that any publicly traded company is driven by the same responsibility. Banks appear more greedy because they deal directly with money, but it's true of any industry.
- Most customers do not make banks money – You've heard of the 80-20 rule, and in many businesses, there is a variation of this where 80% of the profit is derived from 20% of the customers. I think this is even more skewed in banking. The simple truth is that your checking account with an average balance of $1,000 is not adding much to the bottom line, so when they raise your fees, and you threaten to leave, this does not present a problem for the bank.
- They know it's harder to leave – Say you're one of the people that does start looking around and decide that you're going to leave, banks know that it's harder to do so than ever. Before, you could just throw away your checkbook, walk into a bank, and walk out with your money in hand. Now, you have to change your direct deposit. If you pay bills from your bank, you have to change all those over. It's a harrowing process and banks know that most people don't want to do it and won't do it if given a choice.
- They know it won't matter – So you've decided you're so mad that you're going to leave the bank, and you do. You change your direct deposit, update your bill pay, switch over your bank cards, the whole nine yards. You sit back, triumphantly having shown the bank that you're not going to be stuck with their latest fee or have to carry their new required balance. Want to know how long that's going to last? Probably as long as it takes to go to the mailbox and get the notification from your new bank, the one that tells you that they're implementing the same fees or something similar that will result in the same thing. Even credit unions, once considered the safe haven from fees, have implemented more stringent requirements that result in many of the same fees, balance requirements or otherwise.
So, is it hopeless? Are we just supposed to bend over and take it?
No, I would never agree with that. I don't think you just roll over and take it, but you can do a few things:
- Understand your requirements – Many people pay fees because they don't know they don't have to. If your bank starts charging you $8 per month, you might be able to waive that by increasing your balance by a few hundred dollars a month or by implementing direct deposit. Before just accepting, first make sure you understand.
- Rely less on banks – The bank where we do most of our banking is primarily a pass-through. The money gets deposited, bills get paid, and the rest (less enough of a cushion to keep the minimum balance requirement intact) goes elsewhere. We don't have a savings account there. We don't invest there. We don't have our health savings account there. What he have is basic.
- Focus your customer service time elsewhere – As I indicated above, unless your name is Mark Cuban (and if Mark Cuban is reading this blog, well how awesome would that be) than the bank really doesn't care if you complain. While it might make sense to write on their Facebook wall or Twitter page or something like that, you might realize that your time would be better spent trying to get improved customer service elsewhere. At a place where, if you left as a customer, it could impact their bottom line.
I don't think we should take poor customer service from banks, but I think we would be wise to understand the limitations that we have as customers, and how we can best approach the issues that we have to do what we can to mitigate the things that make us see red.
What do you think? Is it a better use of time to complain about banks or should we minimize the impact and be more pro-active to work around the issues we have, understanding that banks don't have motivation to make customers ‘happy'?