Chase win’s award from plain language group

Chase was recently awarded a WonderMark award (as in “I wonder what they were thinking”) for the lack of clarity in their recent letter to account holders announcing changes to their accounts.   For example:

If we do not receive any Minimum Payment within 60 days of the date and time due, the Penalty APR will be applicable to all otustanding balances and future transactions on your Account. However, if we receive six consecutive Minimum Payments by the date and time due beginning with the first payment due after the effective date of the increase, we will stop applying the Penatly APR to transactions that occured prior to or within 14 days after we provide you notice of the APR increase. For balances that we stop applying the Penatly APR to, we will apply APRs that would have applied at that date if the Penalty APR had never been applicable.

Clearly they are still playing games trying to deceive customers.

Chase, other big banks face debit fee limits from bill amendments

There are proposed amendments to the financial services overhaul bill presently making its way through Congress that would limit how much large banks (small banks are specifically exempt) could charge for debit card transactions.  The main beneficiaries of the amendments would be retailers.

Update 5/24/10:  Here is an open letter from the amendment’s sponsor Dick Durbin as published in the Wall Street Journal that talks about debit fees:

Regarding your editorial “The Reduced Credit Act” (May 20): You should understand how Visa and MasterCard have rigged the debit interchange system to favor big banks at the expense of small merchants and consumers, and why the amendment I successfully offered in the Senate is needed to help small businesses stay afloat.

Visa and MasterCard control 80% of the debit card market and require merchants to pay up to 2% of every debit-card sale they make to the card-issuing bank as an interchange fee. Because of these fees, businesses get shortchanged on every sale and must make up the loss by raising prices or cutting back on other costs like hiring.

You say that merchants can shop around at banks for lower interchange rates. But Visa and MasterCard set interchange rates for all banks in their networks, so every bank receives the same interchange rate regardless of how efficiently a bank conducts transactions or avoids fraud.

Visa and MasterCard do not allow banks to compete with one another or negotiate with merchants over interchange rates. Rates stay high as a result of this price-fixing and lack of competition, which brings more revenue to the big banks but comes out of the bottom line of merchants across America.

My amendment will require that debit interchange fees be reasonable and proportional to actual processing costs.

While your editorial argues that the Federal Reserve should be able to consider bank operating and antifraud costs in setting fees, the current availability of guaranteed interchange revenue—at a level fixed by Visa and MasterCard—reduces banks’ incentive to manage those costs efficiently. You need to decide: Do you support competition or big bank oligopoly?

Update 6/5/10:  I received a letter by my credit union urging me to contact my elected representatives and ask them not to support this amendment.  Their argument against this amendment is that it will create an atmosphere where retailers my choose to reject certain cards issued by certain banks (i.e. the smaller banks that are exempt from having their interchange fees mandated at a lower rate) because certain cards will carry higher interchange fees.  They claim that the interchange fees allow them to offer the good value of services that they do.

Honestly, I am torn on this issue.  While big banks are more likely to try to bilk customers of fees across the board on everything, it is very likely that small banks and credit unions selectively apply fees in such a way that they believe offers the most value to their customers, without charging them too much.  I can see how this could hurt their business.

Interestingly enough, this recent article about big banks and small banks and credit unions uniting to fight this legislation doesn’t talk at all about why small banks oppose it, only that they must be misinformed if they think it will hurt them.

What to do?

Chase can’t figure out time zones (and they cancel your accounts at will)

I’ve often heard people from New York City claim that it is the center of the universe, and perhaps that is the thinking behind a Chase customer service rep from NYC calling someone at 6am in another time one, or perhaps, like many other things with them, they just can’t figure time zones out.

Were it that a 6am call was the only infraction, but it is not so.  Chase apparently closed all the customers checking accounts when he wouldn’t switch to a higher fee version.

ATM fee limitation in bank-overhaul bill

The bank overhaul bill making its way through Congress looks to possibly include a limit on bank ATM fees – you know, the ones you pay when using an ATM at a bank that is not yours.  These fees average about $2.66 per transactions according to the Federal reserve, but actually cost banks much less than 50 cents.  The amendments to the bank overhaul bill would cap fees at 50 cents per transaction.

Any excuse to raise your rate

Another sad story about a 7 year customer who always paid his credit card on time and never once missed a payment.  Then he moved and in the mix up was 3 days late on one payment.  That won him a 10% increase on his interest rate.

More Chase grievances

Years ago the local weekly paper where I lived included the Straight Dope column and I developed an appreciation for the non-nonsense explanation of everyday things.  But I was surprised, as I usually am, to see a long Chase rant discussion on their discussion boards.  It seems that people take whatever opportunity they can to vent about Chase.  Some interesting grievances from that thread, such as using even the smallest amount of lateness (hey, we all screw up from time to time) as an excuse to rais interest rates.

Is it really necessary to deem someone a risky customer and raise their interest rate for being 5 days late on a $41 balance?  In one response to that post Chase was accused of cashing the check but posting the payment intentionally late.  Another accused them of shifting the due date around from month to month to make it more likely that people will screw up and miss it.

What most people want from a bank is pretty simple – customer service.  This means that you treat them with respect and are able to distinguish the occasional mistake (and forgive it) from the truly risky customer.

Another complaint is charging customers to download transactions into Quicken?  Seriously?  Isn’t this the kind of feature that gets people to sign up with you as a bank?

There are more complaints, but I got tired of reading. 🙂

With ARM interest rate Chase just does what it wants

A lot of the stories I see about Chase make me wonder whether they are bad or simply inept.  With respect to her originally WaMu 5/1 ARM mortage, Jill writes:

I have a 5/1 Arm that originated w/WAMU and now with Chase. It is due to adjust in August 2010.  The gives the index loan is floating over, which I looked up – currently about .42.  Index is 1-year Average Treasury (referred to as CMT). When I called Chase to confirm current index, I got transferred about 6-7 times, no one able to look up index.  Last person said index is 3.33 – big difference from .4 almost 3 points too high. My husband recently spoke to our realtor who sold us the house and had same type of loan and had same problem, but finally got hers fixed.  How many people are out there that didn’t question this?  This “error” can cost people thousands of dollars and lead them to losing their homes.  I am spreading “the word” starting today.

Now, setting the rate on an ARM once it resets should be day-to-day stuff for a bank and they should be good at it.  Is Chase simply not good at what banks are supposed to do or are they doing this intentionally, and making it purposefully hard for people to solve the problem in the hopes that they will just give up?

Chase’s misleading overdraft come-on, take two

Apparently Chase has decided attempting to get people to sign up for overdraft protection for their debit cards, which they will be required to do soon (i.e. opt-in only), using fear isn’t quite getting them the response they want, so they are switching to bait-and switch.

According to this article, Chase is sending out overdraft letters in two stages.  The first is the come-on and doesn’t contain any of the negative details, which are the high fees you pay if you overdraft by even one penny.  The follow-up letter, presumably in much smaller type, contains all the details about the fees.  I suppose they are hoping that people will sign up because the first letter sounds so good, and not bother to read the second letter.