Why Do You Treat Me So Badly Bank Of America?

There’s only been one bank that has consistently treated me like cow poop all these years and that’s Bank of America.  When I saw its shares dip to $6.5 (-45% YTD) during our S&P downgrade meltdown, I couldn’t help but wonder whether it was just karma striking back.  Granted, Bank of America has some wonderful people working for the firm.  I guess it just so happens that I hardly encountered any of them.

During the financial crisis in 2008, I spread my money purposefully to Bank of America given that I was afraid any and all banks could fail, and the FDIC only insured up to $250,000.  Before BoA, I had been banking with Citibank, USAA, First Republic, and a little bit at Chase.  As the markets began to recover in 2010, I withdrew all my savings and expiring CDs and refinanced a mortgage away from Bank of America because I just couldn’t take how uncompetitive BoA’s rates were and how poorly I was treated.

Banks are a commodity business that takes in money and pays you a certain rate, and lends out your money at a higher rate.  It’s what banking analysts call the net interest margin, or NIM for short.  The bank should provide safety, liquidity, and access.  You know what the differentiating factor is in a commodity business?  Good service.  Someone forgot to tell Bank of America!

I HAVE FEELINGS TOO BANK OF AMERICA BAILOUT

Here are some examples of poor service and uncompetitiveness:

  • I was stood up by the Bank of America mortgage refinance guy not once, but twice. For the second time, he even confirmed with me 45 minutes prior that he would be at his office waiting. When I got there, I waited for 30 minutes and his boss had to apologize on his behalf. Being late is a pet peeve of mine already. But, to actually flake on a customer after confirming just moments ago is inconceivable.
  • When I successfully refinanced away from Bank of America at a rate much more competitive, Bank of America made me fill out extra forms and charge me several hundred bucks for access to my own records. I remember thinking what a bunch of crock, and unnecessary delay in paperwork because no bank had ever required this when I refinanced in the past.  I also wondered to myself why the hell they just didn’t give me a rate mod, or offer to match the refinance fee so that they could still make a spread off my loan?
  • I lost my online password, and when I went to reset it, they said I needed to input my ATM card number, even though I destroyed it 18 months prior and didn’t have it. Instead, I had to call customer service for 30 minutes to retrieve.
  • Their CD and savings rates were simply uncompetitive. We’re talking at least 0.5%, and often a full 1% lower than other banks at that time. You’re losing out on $1,250 to $2,500 a year on $250,000 for example. When you can simply move your money to any other bank that is offering more, you might as well, especially since the financial storm had passed.
  • My personal banker was let go.  She was actually really good and responded quite quickly over e-mail.  She tried her best to push things along and get the best rates possible for me, but she was running into internal walls everywhere. When she let go of her, I decided I definitely have not one shred of allegiance to Bank of America anymore.

IS BANK OF AMERICA TOO BIG TO FAIL?

After the massive bailout, I never thought that Bank of America would get back into financial trouble.  However, with its poor service, uncompetitive rates, and more poor service, perhaps there might very well be a good old fashion bank run again.  All these settlements ($8.5 billion on June 29th with mortgage bond holders), limits on what it can do (government denied the bank could pay a dividend), and massive drag on earnings (Countrywide), make Bank of America a lame duck company to own. We all know about its empire building history, but now, the world is seeing what poor management and customer service can do to a company.

With AIG filing a $10 billion dollar lawsuit on mortgage-bond investment fraud, it’s hard to see Bank of America getting out of it’s mess anytime soon.  If an average Joe like me fled the bank 1.5 years ago when it was supposedly on its upswing, how many folks are fleeing the bank now on a downswing? There were certainly some good people at Bank of America too. But for the most part, I felt like such a second class citizen that I had to go.

Regards,

Sam

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. Money Beagle says

    I don’t know, a bailed out AIG suing a bailed out Bank of America, when they both made enough bad decisions over the years to last a lifetime, I’m not sure where that will land.

    I think the answer to your question about why they treat customers so poorly, is because of the type of customer you are. Banks these days see retail customers as a necessary evil, but their real bread and butter lie with Wall Street, investment bankers, government big wigs, and other fat cats. Essentially, they’ve gotten so big that they don’t care one bit about the little guys anymore and they’re not even afraid to mask that. Sad but that’s why credit unions and smaller banks are the way to go.

  2. Sunil from The Extra Money Blog says

    i have had a few accounts with BofA for years now and knock on wood, i have yet to experience the frustrations many speak and write about. there are folks working hard trying their best, but i think the risk of dissatisfied customers exists in all giant organizations when things become highly “matrixed” and difficult to govern from a standardization perspective. just an opinion…

  3. Evan says

    I never banked with BofA because of the ridiculous fees they had on checking accounts. I remember needing a couple grand to avoid fees, but I never keep anything more than 2 or 3K in a checking account…everything gets shifted to savings accounts (which you point out sucked at BofA).

    I did have an experience with their Credit Card Dept., and despite taking a hit to my credit score I cancelled the card on them b/c they sucked!

    http://www.myjourneytomillions.com/articles/sometimes-you-have-to-ignore-the-right-thing-to-do-i-cancelled-my-bank-of-america-credit-card-today/

  4. krantcents says

    I am a B of A customer and have been for 40 years. I agree with you that they treat most people badly. They are huge corporate and business bank. I saw it first hand years ago, when I represented Xerox to them and how accommodating they were for my $125 million. They even cooperated with another large bank on the deal. It is a very different world! You don’t have to take the abuse, but recognize you can only do so much as an individual. Over the years, I have had very few problems. When I do I have been successful 9/10 times. I feel no loyalty regarding CDs, or other services so I would just shop them. I am sort of locked in because I now use my years with them as leverage.

  5. MoneyPerk says

    Honestly, I have only been with one bank and that’s Wells Fargo. They’ve had wonderful customer service for me, but I am thinking of opening another account with Chase. Maybe it’s just my personal conception, but they seem like really thought out company with great services for business and entrepreneurs.

    Anyway, I do believe in karma and I think BoA got what they had coming to them. It’s downright ridiculous how businesses treat customers these days. It’s also a wonder how they’ve stayed in business for this long.

    • Janna says

      I used to have a great perception of Chase, but a couple years back they took aim at me and 40,000 other customers who had a guaranteed low interest rate (2.99% for me) “for the life of the loan” and decided, for NO REASON AT ALL except that it was no longer profitable for them to 1.) impose a $10 per month service fee and more than double the minimum payment or 2.) raise the rate (more than double)!!! I fought and fought and fought and ultimately won on a technicality, but that experience totally changed my opinion of Chase. I try to never miss an opportunity to tell others about their true colors. And many of those customers were small business owners. (Google Chase Bank Change in terms for more information.) I believe in karma too….

  6. 20 and Engaged says

    Bank of America sucks. They just…suck. They were my first bank, and I’m still with them I think I’ll be leaving them soon. Their customer service sucks and their business practices just aren’t ethical. But to answer your question, I definitely don’t think they’re too big to fail. The more people complain about them, the closer they’ll be to failing.

    • Financial Samurai says

      I just worry that if they fail, the whole financial system collapses and we all lose.

      I want them to flourish, not fail, by treating customers better. I know there are good people there. They just need to refocus on customer service and make it a priority.

  7. Doctor Stock says

    Karma’s a … “cow.” Nice. If any bank or company is “too big to fail,” then we need to change our policies and practices to hold companies more accountable to the bottom line. A socialist system in a capitalist country really doesn’t work well, as we are seeing now. How many more days/weeks/months or years will it be before we bail out another one? Just my thoughts… from a 3 day Yakezie challenge participant (a newbie).

  8. The $60K Project says

    I think BoA got so big they thought they could just rest on their laurels and reputation. I think it worked for a while but I believe consumers are demanding more from their banks now. I cancelled my accounts with BoA years ago and do all of my banking with a credit union based out of Oklahoma and FirstBank of Colorado. Even though I live in San Diego, both have excellent customer service and accommodate out-of-state customers.

  9. Dividend Monk says

    I avoid big banks, including Bank of America. I prefer credit unions, because they are not profit-driven and so there isn’t any income going away from the bank to shareholders. The offerings are competitive, and the customer service is excellent.

  10. Darwin's Money says

    I still don’t get why anyone’s opening a new account with B of A when they can use a local bank or TD, which has great hours. The market’s beating them up pretty badly this week – you must be gloating!

    • Financial Samurai says

      I’m definitely not gloating. It just seems so obvious that all they have to do is treat their customers better, and their deposits would be that much richer, and they would do that much better.

      Let’s say I had $500,000 in assets with BoA. If you could attract or keep just 10,000 of me, that’s a nice $5 billion in deposits. Instead, they cause us to runaway and never return. It’s sad.

  11. everyday tips says

    I hate Bank of America. My mortgage was sold off to them, so I am kind of stuck with them. However, for my personal banking, I refuse to use a big bank. I have found my credit union to be fantastic, and the fees are almost nonexistent.

    BoA has sent us all kinds of letters. First they declared my house is in a flood zone (in the midst of fighting that). Then they said Nationwide didn’t provide proof of homeowner’s insurance on my house and they were going to take out some ridiculously priced policy on my behalf. I talked to Nationwide and of course, they had provided the info but sent it again anyway.

    I think half my motivation to pay off my mortgage is to get away from BoA.

  12. Untemplater says

    I haven’t had much experience with Bank of America and I think I’ll definitely steer clear now! I would be so mad if I was in your shoes waiting for an appointment that was confirmed right before and then get told the guy cancelled. I don’t want to see them fail either b/c of what it will do to the markets but sounds like they have some serious work to do on customer service. Hope they get their act together fast.

  13. World of Finance says

    I have also strayed away from BOA for the most part. It’s sad that the banking industry, even for tellers, have ridiculous sales goals. It seems that employees are too pressured on their sales and not able to sell and provide customer service.

  14. harry says

    I think Bank of America service is perfect in Palo Alto. It is much better than wells fargo here. But I think not every branch has such service.

  15. Natalie @ Mango says

    I guess Sunil and I are lucky, because I’ve had an account with Bank of America for several years and haven’t had any problems either… But this certainly isn’t the first time I’ve heard of people having problems. The funny thing is, I hear just about as much bad stuff about Bank of America as I do any of the other large banks.
    Now, I don’t want to get too sales-y here, but I work for Mango Money, which provides things like pre-paid, reloadable debit cards and services for customers without bank accounts. It’s not the right way to go for everybody, but, hey, if you’re not happy with your bank, it might not be BofA, it might just be big banks in general… Something like Mango is at least worth looking into as an alternative. Customers really seem to love it– at least there are no blog posts like this out there about us! Check us out, and what others are saying about us! :o)

    https://www.mangomoney.com/press

  16. MoneyCone says

    I quit on BofA in early ’00s and haven’t looked back ever since. One fee surprise after another and really poor service with an ‘I don’t care’ attitude.

    I honestly don’t know why people put up with BofA. From mortgage frauds, to muni-bond frauds, to sub-prime loans to bailout bonuses to robo-signing, BofA is in the forefront of every sneaky trick in the book.

    Today even Goldman Sach’s downgraded BofA. Guess it takes one to know one.

  17. The Wealthy Canadian says

    I’m not sure if Bank of America’s recent sale of it’s Canadian credit card MBNA business to TD is a worrisome sign or not, but the stock has taken a beating in the last six months.

    I used to have a couple of MBNA Mastercards through BofA because of their superb low introductory interest rates. With the recent sale to TD, I heard these promotional rates will be phased out over the next year or so.

    Nice post!

  18. BOA Constrictor says

    Bank of America’s acquisition of Countrywide Home Loans was just plain stupid (or arrogant).
    Countrywide’s mortgage portfolio had a lot of rotten loans. The state attorney generals are in a bit of a rough position if they don’t go along with the fed and sell out the borrowers in their states. If BOA were held accountable for anything close to the damages allowed by law, BOA would be forced to recognize it’s insolvency. The fed now exists to bail out the rich, not the homeowners.

  19. John says

    Ya I agree with pretty much everything stated earlier. What happened to small town banks with actual customer service…oh ya, they got bought up by BofA, Chase, and Wells Fargo. Would be nice to have a small town bank that acted like a nationwide bank in terms of atms and what not. I guess credit unions may be the way to go for future banking.

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