$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!

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.

Chase teller steals $37k from customers

A JP Morgan Chase bank teller is accused of stealing nearly $40,000 from customers at the Boca Raton branch where he worked so he could pay his bills, according to an arrest report.

Israel Conley, 20, was arrested Aug. 19 on more than a dozen charges of fraud and larceny.

The Boca Raton man had been working at the branch at 240 East Palmetto Park Road for about two months when he allegedly started withdrawing thousands of dollars from customer accounts in July, the report said.

His victims were mostly elderly customers, ranging from 57-years-old to 99-years-old, police said.

On August 16, the branch manager alerted a corporate investigator about some suspicious transactions she came across during an audit. Conley had processed $36,800 in withdrawls, but the customer withdrawl slips were written in the same handwriting, according to the report.

It turns out he forged customer signatures to withdraw large lumps of money from at least six accounts, including a hair extension business, according to the report. He then deposited the stolen cash into his own account at the bank.

Read more …

Naomi Wolf sues Chase for stonewalling fraud investigation

The fact that best selling author Naomi Wolf was defrauded out of $300,000 isn’t the most interesting part of this story.  The most interesting part is that she is accusing WaMu, and subsequently Chase of a systematic approach of stonewalling fraud investigations so that customers have no recourse and the bank can’t be held accountable.  You can read the about this interesting story at the Huffington Post or The Smoking Gun.

Then the same officials who had directed me to keep the accounts open, disappeared — systematically, for just over six months. When I sought to talk to the fraud department, I still could not get records — including my own missing bank statements — even to see the full extent of my losses. The bank officials who had directed me to keep my accounts open were unavailable at the branch — over the course of many attempts to speak with them. The police at the Sixth Precinct needed to see the missing documents, but even they could not force WaMu to hand over their — my — records. (WaMu’s own internal emails cite a $300,000 figure for my loss from fraud — I still did not have enough of my records to identify the loss. It is illegal, by the way, to withhold from an account holder his or her own records).

At eight months after the fraud discovery was confirmed — eight months of trying to communicate with officials and a fraud department who were oddly unavailable or unresponsive — I received a form letter from the WaMu Fraud Department advising me that according to the regulations, I had had a six month window for taking action; and (since WaMu had played out the clock for eight months) the letter asserted that I had waited ‘too long’ and my case was closed.

But she got lucky, because a bank official accidentally gave her the wrong file which contained damaging evidence of their policy of stonewalling investigations in the form of several emails.

Inadvertently, subsequent to that, a WaMu bank official handed me the wrong file — wrong from his point of view; illuminating from mine, and from any consumer’s. It contained emails, some of which you can see at TheSmokingGun.com, from WaMu bank officials to one another — and including emails from and to their counsel, PR department and and the fraud department — that take as given that stonewalling a client with a fraud claim on the bank is standard practice; and yet one freaked-out bank official in the emails warns his colleagues that if their mechanisms in this regard became known, their practices would be all over the newspapers.

It is unclear whether this practice was limited to WaMu or also a policy of Chase.

Chase advertising vs the truth

I received the below junk mail from Chase a couple of weeks ago.  There are a couple of points that need clarification:

– FREE Chase Debit Card with built-in security – you don’t pay for any unauthorized card transactions if your card is lost or stolen and you report it promptly

There are way to0 many stories floating around the internet of people who have had their cards stolen and Chase refuses to consider the charges fraud.  Their fraud controls often miss obvious fraud.

– FREE voice and e-mail alerts – we will notify your if your balance is low to help you avoid overdrafts

Yea, not so much.  Their alerts come at the end of the day, after your credits and debits for the day have been processed, and thus will not help you avoid overdrafts on any particular day.

On a side note, I’ve seen a TON of Chase advertising lately; perhaps they are realizing that far too many customers (and their deposits) have and are heading for the exits and are trying to get new customers.

Man dumps Chase after 44 years

This guy had been with Chase (or its predecessors) for 44 years. He recently opened a business checking account. Someone (he thinks a Chase employee) got a hold of his never received debit card and racked up $6,200 in charges. Somehow their fraud department missed the totally uncharacteristic charges for a 78 year old single man. Chase refused to refund his money and claimed the he fits the profile of a credit card cheat. Not even the pictures of the woman wearing a dress using his card at the ATM (from the police) would convince Chase to change their mind. So he ditched the bank.

Update to story: After his story was posted on the Huffington Post, Chase apparently got the message they needed to deal with it, so they are returning his $6200. So now we all know the best strategy for dealing with Chase – if you can’t get satisfaction, go to the press!

WaMu/Chase doesn’t even believe police

I previously reported on Chase’s unwillingness to believe a customer’s fairly obviously believable claim that their ATM card info had been stolen. In this case, WaMu/Chase doesn’t believe the customer despite that fact that the police caught the thief. Incidentally, this story has some excellent commentary that outlines how to complain about WaMu/Chase to their regulators.

Disputing a charge = cancelled card

Matthew writes:

“On October 6, 2008, I called the WaMu 800 number to speak to a representative about how to dispute a charge which appeared on my account as “Debit without PIN” from an organization in Denver Colorado whom I’ve never done business with in person or online.
After fumbling through their menu system which gives no clear way to speak to a representative for disputing charges (I had to go to the department that handles lost or stolen cards just to get to a live person) and also doesn’t offer a “zero out” ability to just speak to a live person to get to the right department, I finally reached a message that asked if I wanted to take part in a survey after my call was done…of course I selected this option to rate their phone system functionality as substandard.

Finally routed (after 15min and multiple attempts) to the disputed charge claims department (after being told I could have the direct number in case of being disconnected but then being told the number was not releasable) I spoke with Helene and proceeded to tell her that I wanted to dispute a charge on my account for the $50.00 in question. While on the phone with her, the automated survey called me and left a voicemail thereby preventing me from engaging in their survey.

In my conversation with Helene, I explained that I did not do business with this company and wanted to dispute the charge. She then told me that to dispute the charge a new card would have to be sent to me and the existing card would be cancelled. Since I have a business trip in the upcoming week, I asked her if I could postpone the claim until afterwards so that I had the card available for the trip, then then proceeded to tell me that because of my just telling her that I wanted to dispute the charge, she went ahead and cancelled the card because “that’s their policy”. Without any pre-recorded message/warning, nor any verbal warning from her in advance, my card was just cancelled without my indicating I wished to do so. I was told that it was “their policy” when I indicated I had to dispute a charge with Bank of America several years ago and they did not cancel my card as a result of dispute resolution.

This is an unacceptable business practice for banking entity to hold their clients and their client’s money hostage in this manner without warning.

WAMU SUCKS!”