I received a letter from one of my credit union accounts recently. It indicated that I must make a deposit, close my account, or incur a $10 monthly fee for the right to keep my account open. I just called them to close my account. That’s probably the best customer service I’ve had since I opened it. The primary reasons for not using my account are as follows:
1) In order to pay my credit card I must first transfer money into my savings account, wait a few days for it to clear, then pay my credit card from THAT account. This is not a model of efficiency. And if I should somehow forget to do the second part and come back 3-4 days later, then I get hit with a late fee, get a black mark on my credit report, etc. This is simply stupid.
2) I got kicked out of my online account monthly for failing to change my password. Then they created a new security measure called an “authorization code” in order to retrieve my password. Only problem is they never indicated what this number could possibly be. I’m busy, and don’t have time to call all of my financial institutions every month to have my account unlocked for the right to pay my bills.
3) Their website is a piece of junk that a 3rd grader could have put together. It’s ugly, non-functional, and they didn’t even have the courtesy to line up their text boxes. It makes me wonder how it even works. MacGyver could have put together a better website with chewing gum and a couple of matches.
That being said, it is obvious that the reason for them forcing closure of my account is because they are losing money. Here are some suggestions, coming from a business turnaround specialist, that the bank could have followed rather than firing their customers:
1) Stop sending paper statements. They invented these two things called “the Internet” and “PDF files”. Use them. I don’t want to know how much money they waste every month sending these stupid statements out telling customers what they already know.
2) Stop over-clustering your locations. There are about five or six locations within a 10-mile radius of each other. Rather than saving your existing customers about 18 seconds of driving, why don’t you put up some branches in areas where you don’t already have customers. It’s not necessarily cannibalizing sales, since all the money goes to the same place, but it sure kicks up your overhead figures, which then have to be paid for by your customer deposits.
3) Per above – build a website that works, and doesn’t kick you out every month. If you want to spend money, don’t build a branch, build a website.
4) Create Mint.com connectivity. I use Mint to track all of my accounts – except this one. While this is not necessarily a make or break situation, virtually every other financial institution in the country has done so. Maybe it’s time to get on board.
5) Stop placing bets on stupid Wall Street crap with your customers’ money. You’re a small shop, and should primarily make your money on the spread between loans and payment rates. It’s unfortunate that new legislation has cut the interchange rates for smaller institutions, but that’s the way the cookie crumbles. Find other ways to increase revenues and cut costs. Firing customers is not usually the best way to achieve that.
So now I have one less account to manage, and my credit score will now fall due to the closing of my account and having lower capacity for my all-important utilization/capacity ratio, but it’s better than paying for the right to give someone else your money. I’m relatively young, and have already decided I will never use banks and/or credit unions unless I have no other options. I hope the rest of America feels the same way, follows my lead, and manages to shrink the number of ever-gluttonous financial institutions.