Banks: A Notoriously Inhospitable Industry

     My ATM and I are close. I see him several times a week to deposit checks--not a bad thing when you've just flown the corporate coop for a life of writing and consulting. Checks equate to rent getting paid; it means my clients are solvent. Just three short years ago, when every company south of Market Street seemed to crash simultaneously and I was thrust into self employment, paid rent and solvent clients were not a given.

Back then, I didn't enjoy looking at my bank account statements. They were painfully anemic and peppered with fees--because I was overdrawn, because I was under the balance minimum, because I was poor. I thought it was ironic that the less money I had, the more my bank charged me. Still, I was too beaten down to consider fighting back; I considered these charges the price of my bank taking a chance on me. I felt grateful that they bothered to keep me as a customer, that I didn't have to do my banking at Western Union.

Since that financially heinous year, money hasn't been a problem. I'm far from rich, but I'm consistent. I know how much I've got; I tend to keep a minimum balance well over $1,000. I pay all of my regular bills online. And, when I quit my corporate job for a self-employed path, this time I made sure I had enough in the bank to support myself during the ramp-up months. In essence I've become the ideal bank customer--low-cost, low maintenance, unlimited earning potential.

The past few months have been "up"--I'm depositing more than I am spending. Normally that makes banks happy. But not if you are Bank of America, my bank, a Bay Area ubiquity that has been charging me a $5.50 "Service" fee for the past few months.

I called BofA to investigate.

"Have I gone under my limit?" I asked the customer service rep.

"No," he said.

"Have I written any bad checks?"

"No," he said.

"What, then, have I done wrong?"

"You're not using direct deposit."

He explained, now that I am no longer employed at a company and no longer receiving checks via direct deposit, I'm charged a fee to manually deposit checks.

"Lemme get this right," I said to the customer service rep, "I'm paying for the privilege of GIVING your bank more money."

"You're paying to deposit checks, ma'am."

"Gotcha. But I'm not depositing via a bank teller. I'm depositing checks via ATM. Don't I get credit for that?"

It's taken banks years to train people to rely on ATMs and the Internet for banking transactions. BofA enforces person-less service by charging for the "privilege" of standing in long lines for customer service. If I'm any indication, they've succeeded in their mission, and customers are relying on quicker, less costly and less error-prone service, via the Web and ATM transactions. The battle for automated service has been won, so now why are banks asking us for even more? 

"Is it about the NUMBER of checks I'm depositing?" I asked, thinking of ways I could consolidate my transactions.

"No. It's just that you're not using direct deposit."

"But I've always manually deposited checks, even when I had a regular job, and was never charged," I said. I've deposited company re-imbursements, birthday checks from relatives. Why wasn't I charged then for the "work" involved in depositing these checks?

It occurred to me: My bank was applying the squeeze because I was self-employed. The "service" fee was 1099 penance, insurance I must pay for being what they perceive as an unstable customer. The first stage of banking's battle for full-scale automation had been won, now comes the occupational cleansing phase--alienation of the unwanted minorities, the 1099s. The fees were their way of roughing me up, of giving me a hard time for not being like them--corporate drones. It didn't matter if I made more than I did while employed at a corporation, in their eyes, according to their demographic profiling, I was still at-risk.

"Can I move my money to a non-fee account?" I asked.

"Yes," the customer service rep said, "But you'll have to maintain a minimum balance in order to avoid fees."

I thought about it: Sure, I was flush with cash now, but a month ago, when I was waiting to get paid, I would have been assessed a fee. I also liked to move my money to higher-yielding money market accounts. I did this when I was a W2 too. But now these fees would be assessed for my disloyalty.

My immediate impulse was to give BofA the finger and switch banks, but BofA's closest competitor, Wells Fargo, has a similar set-up--accounts that charge for not using direct deposit. My second thought is to go to a "little guy", but I like belonging to a bank that is widely represented with ATMs. I can get cash in Chicago, New York, San Francisco, Los Angeles, without being charged a "non-affiliated" bank fee.

Is this fee the price of self-employment? Are there other options? You tell me.
~~~~~~~~

My pal Yvonne Divita, has had her own struggles with her bank. She's bent over backward to be a good customer and moved most of her banking online. But this isn't making her life any easier. 

"I cannot access my personal account online--apparently I have to delete my cookies every time I go into it! ... Plus, my personal account is not linked to my business account, so I cannot transfer funds as needed. In addition, when logging on to my business account, I'm asked at least 3 times if I want to 'proceed' before I can actually get to a window that identifies the account, then...I have to say what I want to do there, and again, it asks if I want to proceed...honestly, it's such a chore, I hate it."

I have to give credit to Bank of America, which has made online banking almost too easy (I actually forgot I paid a chunk off of my credit card while watching TV the other day and nearly paid it twice). At the click of a mouse I can pay a bill, or at least schedule a payment so I don't have to think about it later. Fidelity has an equally robust system that allows me to look at all accounts, transfer money, and review my overall portfolio. The site can even integrate my account data into tools that figure out, say, how much I need to save to retire when I'm 50, or if I have the right investment mix for my goals. The BofA and Fidelilty sites link with Quickbooks and Intuit, to make accounting and taxpaying equally simple.

In this way BofA and Fidelity are walking their talk; they are sending their customers online, to the promised land of simple banking. But banks that don't integrate accounts offer their customers confusion and mistrust.

Says Divita:

"Customer service isn't just how nice the person at the desk is, or how pleasant the kid (aren't they all kids?) at the other end of the line is--it's also how convenient the experience is and how easy the website is to navigate--because EVERYONE goes to the Web site at some time or another. In this high-tech world we live in, it's all about the customer experience."

The takeaway from mine and Yvonne's stories regarding banks, or any institution attempting a full-scale adoption of a new process: Make it easy; don't punish us for going along. Reward us! Give me $5.50 a month for NOT using a teller and using online banking. When I make the leap to banking online, delight me by showing me you were expecting me. Make it easy to use the key you have placed in my hand--make my password work every time! Have all of my accounts and transactions in one place. Make me wonder what took me so long to use your new service.

Once you've got me, you can shut the door and never have to lock it--I won't be going anywhere else.

Comments

[Eric Sohn]

Big banks, honestly, don't want your business. It's not particularly profitable - they want business accounts.

My advice: Switch to a small local bank and use debit cards instead of cash. Periodically, take cash if you like the feel of it, but pay via debit card to minimize those trips.

You also might want to check out Washington Mutual - certainly, their advertising would lead you to believe that they're consumer-friendly.

[abby]

we've been banking with a credit union that not only doesn't charge us fees for anything but bouncing checks, but also remembers our names when we go in. pick a credit union that's part of the network of credit unions so that you can go to any credit union ATM anywhere in the country for free. (you can also use WaMu's ATMs anywhere for free too.)

[Jim Wilde]

Hi Jory,

Welcome to the world of the self-employed. It amazes me that banks pull that crap when the number of self-employed is increasing every year.

My fav though, is all the ads for free checking. Nobody uses checks anymore. What they don't tell you is that you get charged $2 for every transaction outside their network. Say I buy something at CVS and get $10 back in cash, well, the bank adds a $2 trans fee. That sucks! And many banks add a .50 point of sale fee when you use your debit card to pay for your purchases!

[Yvonne DiVita]

Good show, Jory. I could have gone on and on...in fact, I will. I'm still not able to access my 'online' account from anywhere. I need the 'digital certificate' which is designed to protect me, I know, but what it does is prevent me from doing my banking, unless I'm at the computer I set the account up on. Also, I called to transfer money from my business loan to my account, and my rep wasn't in...so, I was routed all over the U.S. to three different people, who all asked the SAME questions, over and over, till, finally, the last one said, "Your money will be available in the morning." In the morning? This is the Internet...why wasn't it available immediately??? I like Abby's note-- I'm headed for a credit union.

[Russell Shaw]

Jory-

I'd consider transferring to Washington Mutual. They are fee-averse, do not charge for manual deposits, and due to a major acquisition binge on their part, have branches in all the cities you mentioned....

Russ

[Jane]

I'm also a big fan of credit unions. Mine charges no fees on accounts and actually pays a little bit of interest on all checking and savings balances.

[Barbara Saunders]

This is in no way a defense of the fees; however, I believe that it's not the "instability" of non-direct deposit customers that justifies the fee; it's that the direct deposits don't have to be entered physically.

[jason]

I don't think big banks want business accounts either. I was the treasurer for a non-profit group and with had ~$250,000 in an account so it wasn't like we were a tiny we weren't huge, but we had money. And BOA would charge us $.10 for every Hundred dollars deposited.

I would check into some of the online banks out there. Emmigrant Direct only does savings but pays 3.25% with no fees. Hard to beat that and BOA, Wells Fargo, Citibank, etc..

[Laila Sultan]

URGENT URGENT URGENT!!!!!!!!!!!!!!!!!!!!!!!!

My heart goes to the people who have been ripped off by Bank Of America and their Employees

I can not explain in right words what Bank of America has done to me
They have ruined my life; this Bank is full of CIRMINALS. Employees are looting, and those! BIG SHOTS are just watching and doing nothing.
We the people who put our trust in them to protect our valuables.
“WHAT A SHAME” Please raise your voice and join me. I will be holding Press Conference within two weeks. Send me your Email for the date and time.

Please go to my website for details regarding Bank of America!!!!!!!!!

www.bankofamericaextortioninsidejob.com
lailasltn@yahoo.com

Thank You

[Laila Sultan]

URGENT URGENT URGENT!!!!!!!!!!!!!!!!!!!!!!!!

My heart goes to the people who have been ripped off by Bank Of America and their Employees

I can not explain in right words what Bank of America has done to me
They have ruined my life; this Bank is full of CIRMINALS. Employees are looting, and those! BIG SHOTS are just watching and doing nothing.
We the people who put our trust in them to protect our valuables.
“WHAT A SHAME” Please raise your voice and join me. I will be holding Press Conference within two weeks. Send me your Email for the date and time.

Please go to my website for details regarding Bank of America!!!!!!!!!

www.bankofamericaextortioninsidejob.com
lailasltn@yahoo.com

Thank You