Process Angioplasty - Bank of America

As interest rates rise, the cost of supposed "free banking" grows higher - usually because they pay close to zero interest on balances. But what's with all the incremental fees?

I recently moved most of my kids balances from Bank of America to another bank so they could earn more than a few pennies each month. I asked the BofA bank associate what was the minimum I needed to keep in each account to not get hit for a monthly fee. She told me $ 250. So that's what I left.

Sure enough, I get hit for a $ 5 charge the very first month. I email customer service. I get a response - did not meet minimum balance of $ 300. I protest that the associate told me it was $ 250, but that I had transferred another $ 50 and to ensure they did not hit me for another monthly fee. I get another email, saying the minimum is $ 500, unless I can provide my daughter's birth date. In less than 60 days - 3 associates have given me three different answers.

Over the course of the last few months I have noticed a pattern of interesting other fees show up. ATM fees for withdrawals overseas (and not great currency conversions), wire transfer fees inbound and outbound at $ 25 a pop, overdraft finance fees even when the balance is never negative .

When I think of checking, savings, brokerage, mortgage accounts and combinations of balances, maximum number of transactions etc. and the "if it is Tuesday and you are wearing green socks" exceptions, the pricing is out of control. I cannot begin to imagine how much time their customer service people spend arguing about fees.

And somewhere along the way BofA has forgotten they are already making more with rising interest rates on our balances. Their pricing could use angioplasty.

Comments

[Anshu Sharma]

Some genius at BofA has figured out that only a small %-age of customers read their statements in detail or call up to get the problem fixed. $5-50 per customer in fees when multiplied by 25 million customers is a very large amount that goes right to the bottom line. And frankly, since they all do it I can't even say that they risk loosing customers. In fact, if you do decide to move they probably just lost a customer that doesn't like to pay fees which is probably fine by them.

There are other interesting scams. For example, Chase has this interesting rule. If you make a late payment that is late by less than 10 days- then the payment gets applied to your past bill AND you get to pay the late fee. Now if you don't send in another payment in the next 20 days you are stuck with another late fee. In other words, one miss leads to 2 late fees and finance charges. The response from customer service and managers- "This is how our System works!".
And if its hard for people like you and I, imagine what they are doing to the semi-literate consumers and almost-poor.

[viinnie mirchandani]

My experience with the other bank, Third Federal is so different. Never a crowd, the associates are always friendly. Hardly any fees. Everytime I have to go in to a BofA branch, I hate it. Overcrowded - tha associates are always trying to sell when I am inside with a problem. Their drive through lines are always busy...obviously they have lots of customers. Not sure they need my business.

[Dennis Howlett]

We have the same crap in EU - it's a global issue, the banks are making money hand over fist and then still try to convince us they're in stiff competition - yeah - who can rip us off the most. You should try being an ex-pat getting paid in 3 currencies. It's now WORSE than it was pre-euro when I was juggling upwards of 14 currencies.

[Chris Rollyson]

Vinnie, I couldn't agree more. Industrial Economy companies don't appreciate that the "departments" that made them so efficient in the past add no/minimal value to the customer today because they're tightly coupled and unresponsive. Customers don't care about the departmental inefficiencies when CSRs try to explain away inconsistencies by saying "it's another department." Don't make your problem our problem!

Obviously B of A has some apps that aren't SOAed and therefore multiple versions of the truth. Don't forget, too, that they're a massive roll-up.