Are the big banks criminal enterprises?

James Kwak’s post on banker “incompetence” reminded me of a recent experience.

I went in to my bank (one of the big five) and inquired about the fees for a service I was interested in.  I was directed to a customer service representative, who gave me the fee schedule and then offered to check whether there was an account that would give me a discount.  He then offered me a “no fee, no minimum” checking account with a linked savings account for overdraft protection.  Knowing that the big banks don’t offer “no fee, no minimum” checking accounts, I said “What’s the catch?”  He said “There is no catch.  Switch accounts and you’ll have no fees with no minimum.”  I said:  “It’s a joint account, so give me a brochure for the account and we’ll think about it.”

He printed some spec sheets from the web and handed them to me.  When I read them, I went through the roof.  The customer service representative had lied.  The account had a monthly fee that was waived if you met a complex set of conditions that I couldn’t understand.   One of the ways for the fee to be waived involved minimum monthly deposits that were more than double the amount that my current account required as a minimum account balance to waive the fee.  Furthermore, the linked savings also had a monthly fee (savings account with monthly fee? WTF?) — and one of the conditions for waiving this fee was that you maintain a balance almost double the balance needed in my current checking account to waive the fee.

If I didn’t have a deep seated suspicion of sales representatives, I might have switched from an account on which I have not incurred a fee in more than ten years to an account that was likely to be expensive.  In order to get me to make a switch that would allow the bank to gain at my expense (that is, charging new fees without giving me any additional services that I valued), the sales representative had no compunction whatsoever about misrepresenting the product he was selling by deliberately hiding the fact that there were many circumstances in which I would be charged high fees — unlike the simple terms of my existing account.  Of course, the lies were all made in a face-to-face verbal exchange so I can’t prove anything.  Welcome to the modus operandi of the modern American super-sized bank.

I haven’t closed my account yet, but as soon as someone recommends a good local bank, I’ll go.

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