$32 to stop payment on a check at Chase!

Wow, that’s an expensive fee to stop payment on a check.  I bank with a smaller bank (First Republic) and they charge me $8 for a stop payment, or 1/4 of what Chase charges.

I had to put a stop payment on a check due to someone having their purse stolen. First, it took me FOREVER to get to an attendant to help me and then, he told me it was going to cost $32 to put a stop payment. I told him I thought that it was an outrageous price to pay for him to push a button and he said “that’s Chase’s policy”. Of course, I had to pay it to put the stop payment. After already plugging in my account number in order to even talk to someone and then the guy asking my name, I had to give my account number again. Then he asked my name, I told him that he already asked me that at the beginning of the phone call, but, told him again. Because I told him I was unhappy with their customer service and exorbitant fees, he totally started giving me attitude. After this phone call, I called my husband and told him we definitely need to switch banks. CHASE HAS THE WORST CUSTOMER SERVICE OF ALL!

Are banks trying to discourage concerned borrowers from taking action?

In light of the allegations against shoddy verification practices in the foreclosure process, most of the large banks have halted foreclosures in some or all of the 50 states.  The biggest reaction so far has come from Bank of America, which has suspended foreclosures in all 50 states pending review of its process.

I’ve suggested a few times in the last couple of weeks that this might be a good time for borrowers to ask their bank to prove they actually have the proper documentation that says they own the loan or have sufficient authority over it to do anything significant, like foreclose.  Believe it or not, there have been a good number of cases where the courts have not only found that banks didn’t have the proper documentation (like when they can’t find the trust deed), but the judges went further and dismissed all the debt.

Apparently banks are well aware of the possibility that large numbers of people make take this opportunity to ask them to verify their mortgage, if the recent fee notice from Bank of America is any indication.

Fee Notice Information

Fees for Special Services and Paying Off Your Home Loan

Generally, there are no fees for the routine servicing of your loan. The following fees are the maximum fees that may apply if you request certain special services regarding your mortgage or home equity loan:

Verification of mortgage $15.00

Faxing a payoff statement (FHA only) $ 5.00*

Expediting a payoff statement $30.00*

“”There is no charge for mailing the payoff statement by regular U. S. mail.

If you payoff or refinance your loan, you may incur a fee for the preparation of the documents to release or reconvey your lien (up to $45). Reconveyance is a release of your mortgage when the security instrument on your loan is a deed of trust.

You may also incur a fee to record this reconveyance or release document (in the amount of the actual fee charged by the county recorder, normally not more than $100). In addition, if you have a home equity line of credit (HELOC) that is subject to an early closure fee, you may be charged an early closure fee as described in your HELOC Agreement.

There is also a returned payment fee of up to $40.00.

If you request information or services that incur a fee not listed above, Bank of America will inform you of the fee prior to
processing your request. However, in the event of a returned payment, fees will automatically be applied to your loan account. The information above is not a complete list of the types or amount of fees that could be charged to you over the life of your loan, and the amount of any fee shown above is subject to change.

I think part of the motivation for these fees is to make up for the recent fee haircut banks received from the Credit Card Act of 2009, but I find the fee for verification of mortgage particularly timely.  Could BofA be trying to discourage people from challenging their loan.

Charging for the documentation to prove that you have paid off your loan is also very timely.  There have been some high profile cases where banks have hounded people for mortgage payments long after their mortgage was actually paid off in full and perhaps as a result banks like BofA are getting hit with a lot of requests for documentation to prove a loan is paid off, which they should be providing for free.

BofA, I am happy with you for now; I sure hope this doesn’t mean you are a becoming a crappy, fee hungry bank like Chase.

The Chase no-fee checking account is a fee trap

How does Chase get away with providing so much misinformation to customers?  Stories like this keep piling up.  Are regulators and lawmakers not aware of them?  Perhaps it is time for people to write to their legislators about problems like this?

So against the recommendation of some of you wise folks on piggington, I went for a Chase checking account 6 months ago from a $100 new customer promotion. Why not, I thought since I needed a second account anyway. Chase opens a checking and saving account…

Plus the accounts would have no “fees” as long as you made 5 atm transactions per month or have direct deposit…or so I thought….

So I started out using it normally, with my 5 atm transactions per month. Stick of gum, ATM….Grocery ATM…Stamps at the post office ATM…No big deal….

About 3 months later, I get a note saying:
“Welcome to the Chase Visa ATM Rewards Program. You will be charged $5/month for being in this program…
WTF? You’re kidding right…So I call and talk to them about how this was suppose to be a no fees account…They say “sure, it’s no fees, the accounts are no fee. The ATM card you have however has a fee…..

At this point, I really want to close the chase account, but I recall there’s a “fee” for closing an account <6 months…So I’m arguing back and forth with the person, and finally, the 3rd supervisor says that “well, there’s another type of ATM card that isn’t part of the rewards program that doesn’t have a fee….Well switch you to that one..” Fine, I say.. Why they didn’t do this to begin with, well I guess they do this to try to wear you out, because obviously the first supervisors didn’t indicate there was this option….So at this point, I figure screw Chase. I’m not going to use the ATM. Instead, I setup direct deposit and deposit $1 each month…No fees…

Now it’s six months later, and I’m ready to close the account. I call the call center to tell them I’d like to close the account, and have a check cut from the checking and savings account sent to me….They tell me the savings account is $0…..What??? I had $15 in that account… Well, it turns out that 3 months ago, they started charging me a $5/month service fee for the savings account without telling me…I go back and forth with the agents and a few supervisors….

Me: “When I opened the checking account, you threw in a free savings account”…

Chase: “the savings account always had a $300 minimum deposit requirement, or a $5 service fee per month… ”

Me: “Bullshit…You changed the terms without telling me..I had this account for 6 months and only deposited $15 in this account from the beginning…If there was a minimum balance requirement since the first day , I would have had $0 3 months later, and -$15 now… 6 months later…”

Chase: “…Hold on a second please sir…Uh, we’ll credit you the $15 back on Tuesday, but just to let you know, starting next month, you need to maintain $300 or pay a $5/month fee…”

Me: “No problem: by tuesday, after I get my $15 back, I won’t be a customer anymore. BTW: can you give me the confirmation number for the $15 credit you just applied? “…

Chase: “Why?”

Me: “Because in case I need it …Confirmation number please…”

Chase: “Don’t trust me?”

Me: “No, I don’t..Would you, if you were in my shoes? Confirmation number please. And your name…”

Chase: “XXXXXXX, and my name is XXX”

Me: “Thank you…(click)”

Just to be extra sure, I called Chase back and asked a different agent if the confirmation number was valid….it was…fortunately….

… I know, I know… I think a few of you warned me about this…But I don’t like to listen to other people, even if it’s for my own good….

Why debit cards are a bad deal

Debit cards are at the heart of the battle between consumers and banks.  Until the overdraft protection laws from the Credit Card Act of 2009 took affect in August of this year, banks made $38 billion a year in overdraft fee income.  Banks can still reap huge rewards from the overdraft income stream by cajoling consumers (like Chase does) into signing up for voluntary debit card overdraft protection, or by allowing ACH transactions linked to debit cards (automatic payments, PayPal money transfers) to go through despite resulting in a negative balance.

An article in the Wall Street Journal today outlines another reason why using your debit card is not a good idea; your exposure to losses related to theft is far inferior to that if your credit card.

One of the big selling points of debit cards, highlighted in ad campaigns and on bank websites, is that you’ll have “zero liability” for losses if your card is lost or stolen—just like credit cards.

Turns out that’s only sort of true.

In fact, nearly every debit card comes with restrictions in cases of theft. Some banks limit your coverage if you are slow to report a lost card or potential fraud. Some don’t cover fraudulent ATM transactions. Some may require that you show “reasonable care” in protecting your card or PIN number.

The matter is a significant one. There were 38.6 billion debit-card transactions last year, far more than the nearly 23 billion credit-card transactions, according to the Nilson Report newsletter in Carpinteria, Calif. Banks encourage customers to use debit cards, since they are far more lucrative than cash or checks.

The loopholes grow out of different federal regulations for different cards. Under federal law, your losses from unauthorized charges on your credit card are limited to $50, and there is no time limit for when you must report the problem. Many issuers go further, waiving all losses due to unauthorized credit-card use.

Debit cards, by contrast, are covered under a different law, and the rules are much more complex. If you call your bank within two business days of discovering your card is missing, your losses are limited to $50. But if you wait, you could be on the hook for up to $500. And if you don’t report the problem within 60 days after it shows up on a statement, you might face unlimited losses.

In the late 1990s, and went beyond those requirements, promising reduced liability for their branded debit cards. But there are several loopholes: Visa’s “zero-liability policy” doesn’t cover ATM transactions, some business cards or PIN transactions that don’t go through the Visa network. It does cover transactions where you sign, which bring in more revenue than PIN transactions.

MasterCard doesn’t cover any transactions that require a PIN, and it won’t cover more than two theft events in a 12-month period. You must also exercise “reasonable care” to prevent your card from being misused. But that term is subject to interpretation. Have you failed to show reasonable care if you forget your card at a restaurant? That depends on the circumstances and your bank, a spokeswoman says.

Read more …

It is very easy for a bank to simply claim that you didn’t use sufficient care in protecting your debit card, or that there is no evidence of fraud (i.e. they accuse you of falsely calling a transaction you did as fraud), sometimes despite evidence that you were thousands of miles away.

Overall, you are better off using a credit card for transactions that you want to do electronically and then paying the bill off in full every month.

What’s behind the Chase utility bill promotion?

Chase is offering $20 if you simply enroll your debit card in their bill-paying service and pay at least 3 bills.  What is their motivation for doing this?

Chase is one of the banks that has been aggressively pushing customers to sign up for automatic overdraft protection for debit cards.  A better name for this service would be punitive overdraft punishment.  This has been a huge money maker for Chase in the past and they are looking to regain some of the revenue they stand to lose since new government regulations banned them from turning this service on for all new accounts, without customers being aware of it. Fees from overdrafts have brought Chase billions of dollars of income per year in the past.

This so called overdraft protection will allow you to use your debit card even when there is no money left in your account, at the cost of $35 per overdraft.  Chase has been accused in the past of ordering debits and credits to maximize overdraft likelihood and revenue. While the new laws prohibit banks like Chase from having overdraft protection on by default, there is an important loophole:  They can still opt to process automatic/recurring debit card payments, such as for a utility bill, even when it would draw your account below zero.

So why is having you sign up for bill payment with your debit card good for Chase?  Automatic payments to your debit card are likely to cause your checking account balance to be recorded improperly in your checkbook.

Even the most diligent of people is likely to forget to account for recurring debit transactions either before or after the fact, which means that they will likely not plan for a sufficient balance for an upcoming debit transaction for a utility bill, or will forget to record it and assume their balance is higher than it is, causing an overdraft to occur (if they opted in to overdraft protection).  Either way, Chase greatly increases the likelihood that they will capture significant overdraft fee income by getting customers to sign up for automatic payments on their debit card.

This is not a good deal.  If you want to automatically pay your bills, use a credit card, which won’t have the same problems.

Chase says not raising rates on small business cards, but is

What can you make of this bit from a recent article on small business lending:

Attorney Eric Dixon sat down at his 23rd Street office last month to check his accounts online, including that of a credit card issued by J.P. Morgan Chase. He was surprised to see that the minimum payment on an account balance of less than $5,000 had jumped into the triple digits.

“That made me look for the rate,” he says.

Mr. Dixon insists he’s never missed a payment—he uses the card for the occasional marketing purchase and as a cash-flow cushion—so what he saw came as a shock: The rate had jumped from 6% to 9%.

J.P. Morgan says it is not raising rates on its small business cards, but could not offer more details about Mr. Dixon’s story. But the scenario Mr. Dixon describes is increasingly common. Small businesses weren’t covered in the new financial reform bill that enacted consumer protections against practices like hair-trigger rate increases.

What makes this a more serious problem is that credit cards have quietly grown into the central piece of the small business financing system. As bank loans became harder to come by and the paperwork more demanding, business owners put their debt on their cards, sometimes at rates that would make consumers’ eyes pop.

A survey by the Washington, D.C.-based National Small Business Association found that among companies with fewer than 500 employees, 34% carried more than a quarter of the company’s overall debt load on a credit card.

More than 70% of owners with a card used for business expenses reported paying interest of more than 10%.

Mr. Dixon—who works for companies and people caught up in state investigations—has a client in the pet care business who financed her company entirely on credit cards. Debt in the six figures, at rising interest rates, is now crushing the company; she is, he says, considering personal bankruptcy.

Classic.  Chase says it isn’t raising rates on small business cards but can offer no explanation.  I’ll offer an explanation:  Chase is raising rates on small business cards despite what it is saying.

NY TV news story on Chase abruptly raising minimum payments

Now that the outage is over, back to the real Chase-Sucks news – the stuff that Chase does to customers every day.

While extortion is a pretty strong word, how would you describe it when Chase knowingly puts people into an impossible situation by raising minimum payments.  Great story.

Chase sets new low for savings interest rate & fees

I know interest rates on checking accounts, savings accounts, money market accounts, and the like are pretty pathetic these days, but I think Chase may have set a new low with their recent offer of 0.01% interest on a savings account. Given the potential fees, such as a $4 monthly fee if the balance falls below $300, $2 for a non-chase ATM (yes, this is Chase charging you this fee, in addition to what the ATM owner charges), and $3 for each withdrawal after your first free 4 withdrawals in a month.

Here is the story:

It’s getting tougher for U.S. savers to find a bank where they won’t end up paying to keep their money safe.

The average interest paid on savings, checking, money-market and certificate of deposit accounts fell to 0.99 percent in July, the first dip below 1 percent in a decade, according to researcher Market Rates Insight. Banks also have been raising fees and adding new ones, most recently in response to the financial-services overhaul bill that became law July 21.

The result is that an increasing number of savers are seeing their deposit earnings eaten up by charges. That’s frustrating people like Ken Ward, who recently passed on a savings account with a 0.01 percent interest rate at the Chase bank branch near his home in Wantagh, New York.

Read more …