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Goofus and Gallant both have good names that should keep them from getting their credit histories mixed up with other people's.
As for paperless statements, I agree. Wachovia offers electronic statements online if you don't want physical copies. Since I have become wary of big business I have decided to keep receiving physical statements, but there was a time where I would receive all my statements electronically.
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\"Gallant signs up for overdraft protection.\"
A good idea, I suppose, but only because my bank will charge me obscene amounts of money for the 'inconvenience' of it (which I've often heard - here - is a complete fabrication).
So it costs me money either way - how nice. I'm pretty sure my bank subscribes to the 'Get As Much Money From Them As You Can' business model, and I'm not especially inclined to cut them any slack. Anywhere.
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I like the way this bank considers closing your account 'calling your bluff'.
Uh, right, isn't it more accurately called 'losing a customer'?
Man, I've told BofA about my address change about four times. First called and changed it, called and asked if it was changed later, ad changed it online twice. Everything they send me STILL goes to my old house. Fortunately my parents live there, but it's still really annoying that I have to wait twice as long to get everything.
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Goofus stays with his bank which mistreats him.
Gallant signs up with a credit union and customer service is nice to him!
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I thought it was Goofus and Godfry?
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@clarient: Ditto. My bank charges a per item \"processing fee\" based on the type of account if you have Overdraft Protection, and $35 for any NSF amount they pay-out up to $1000 without it.
I'm not saying that overdrafts are never the customers fault, but since they also like to post debits BEFORE posting credits, they're making money hand over fist.
As an employee of a community bank (we're the good kind) I would also add the following, through my experiences in Operations (I'm the dude to call when your account has some massive problems, think customer service ninja):
Goofus uses a debit card. Yes, they are convinient, and yes they are a lot faster than money, but people can so easily throw their account out of balance because of that $4.00 purchase they made at starbucks (believe me, it's happened to me alone twice in the last year, before I gave up my debit card).
Gallant ALWAYS uses his debit card as a credit card. When you use your debit card at a store and use the debit option (where you enter your pin) it's a lot more handy because you don't have to sign. The downside is that if there is a dispute with the transaction PIN transactions do not have the merchant's phone number and address like they do with transactions run as credit. It's much easier to charge back, make inquiries, and basically get down to the bottom of things when you actually have this extra information.
All in all, though, awesome article and very good points all around.
Here's my question: in the banking side of our consumer lives, we are told to maintain impeccable records of our funds, with documentation and reciepts to back up anything involving our money....
What the hell am I paying the bank for?
I dont know of any other commercial organization that puts such a burden of proof on their customers, nor do I know consumers that would put up with the same treatment we get from banks from any other merchant.
I use Bank of America, which is usually pretty good to me (though I've heard other experiences.) I actually switched to BoA after trouble with Wachovia. I dont want to join a credit union because I'm really bad with my money, and I'd rather stay as anonymous with my CS reps as possible... don't want Sally down at the CU asking what was up with all that drinking money...
This sounds like the financial institution that I am intimately involved with. At the risk of blowing his cover, I'd say it was BofA. We have 52 percent of the market share, so chances are lots of you do / have / or will bank with us. Basically, I agree that he sounds like a burnt out Customer Service rep. But I also feel his pain.
\"What the hell am I paying the bank for?\"
Who pays their bank?
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What's wrong with using online statements? Less possibility of ID theft due to statements being stolen, less junk in my house.
If it's so unsafe ... why are you offering us the option?
Then again, these are the same banks that sometimes require IE and refuse to support anything else ... you know, the browser chock-full of security holes? How is THAT protecting our identity?
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@Marcus: are you serious?
i didn't post the list, but here's my 0.02. a bank is designed to be a safe place to deposit your money & allows you to conduct mercantile activity. IT IS NOT YOUR FILE CABINET. if it was, it would be called a file cabinet. while it maintains a lengthy history of your banking activity & will gladly recall it in situations where you are having trouble, if you are constantly having trouble it is (in very many cases) not the bank's fault. perhaps you would be better off cashing your checks & stuffing the money in your mattress. then you can use your mattress for target practice when you can't figure out where all your money went. & no banks don't mind losing these customers - they are considered a drain b/c of their high maintenance.
& if you're really bad w/ money, you're probably better off at a c.u. you'll pay less for \"extra\" services. & the personal interaction may even get you a few free statement copies & a couple fees reversed. & don't worry about sally - she's got more important things to do than calculate how many 6-packs you bought at bob's discount liquors. & if she doesn't, let me know & i'll give her more paperwork.
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@DCKiwi: I don't think \"big banks\" really want us checking/savings account customers -- we're not the profit making part of big banking. They seem to tolerate us because offering personal banking services pleases the local regulators. At least it seems that way
I guess I don't make as many purchases as most people or something, because I keep my running bank balance IN MY HEAD, and I've never been off by much.
I used to be more conscientious about it, but after a few years at my current credit union, never finding a real problem, I decided it was a waste of time. I still review my statements and make sure they jibe with my purchases and running balance, but that's it.
Goofus gets all the chicks.
Here is how it works - Financial institutions only really make money off of large depositors or customers who take out loans.
People with small amounts (avg daily balance) of money in an account are a drain on resources unless they are being charged enough fees to balance out the servicing costs. The point of having small balance customers is to have an opportunity to have another relationship, like a loan or account fees (don't forget the interchange fees charged on debit/credit cards).
You'd be surprised how slim the margins are. You have to pay high interest rates to depositors & have low interest rates on loans to attract business. Considering all the regulatory burdens & the branches/payrolls/etc.. the costs of doing business are high.
Really the best way to imagine Banks/Credit Unions is to compare them to gas stations. It's a business were either convenience or low cost is the deciding factor.
I have to admit my accounts are with Banks, but I need to switch to a Credit Union. At least at a Credit Union the customers are the owners & the profits are paid to you at the end of the year!
ROFL!!! I have nothing constructive to add; just wanted you to know, Ben, that I hadn't thought of those crazy kids Goofus and Gallant for years, and this post gave me a much-needed laugh tonight.
*cough* Overdraft protection? I thought you guys were against products like payday loans and the ilk. OP is certainly in that class, though a bit more insidious as it masquerades as something good.
I work for a major national bank that gives branch bankers access to each customer's profit margin. It may surprise you to know that a customer with a free checking account with direct deposit actually is profitable to the bank (not a lot of profit, but this is a volume business).
My suggestions to add:
1. Skip the overdraft protection. Most banks charge a transfer fee anyway. Instead, keep enough extra in your checking to cover any bookkeeping errors. If you don't have the cash to cover your charges, you need a loan not \"overdraft protection.\"
2. Use a credit card from the same bank as your checking account. Most people keep a much closer eye on their checking account. If they both show up with a single login to yourbank.com, you'll be more likely to catch problems on your credit card.
3. Skip the debit card and limit transactions on your checking account (use cash or a credit card). The more transactions you have on a checking account, the more likely you are to forget something and overdraw. Also, if you have fraud on your checking account, you'll be out the money while they investigate. That means you can't make the rent. Scary.
4. Open a savings account online. They're easier to use than you think, and the bank's rates don't come close.
\"Goofus asks to have his physical statements stopped.
This not only is not possible using our current systems, but you should be verifying all transactions since you don't have a lot of time to dispute a transaction due to regulations. On Top of this is the only method we send you updates/service charge changes/disclosures.\"
I haven't received paper statements from my bank for the past several years. Paper is so last century. It's a waste of resources from the production of it, the ink, the postage, and the disposal. I verify my transactions on a daily basis by spending 10 minutes per day looking at all of my accounts through Yodlee.com.(account aggregator)
Now who's keeping a closer eye on transactions? Someone like me using the internet to view my account on a near daily basis, or the guy using the old way of reading a piece of paper once a month?
Also, \"employee\" is incorrect in saying that you won't receive changes and disclosures if you don't get paper statements. That is false. All of my banks send disclosures and once a year send a privacy policy statement as required by law.
\"Employee\" would serve us much better if they joined us in the year 2007 before giving advice.
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@CS_ninja: They try to trick you into thinking that you can't use your debit card as a credit card. In some places you swipe your card first and it goes straight to a screen where it asks for your pin number instead of asking which transaction type.
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ING offers an online checking account for savings customers that has $1000 overdraft protection, automatically. There's no signup fee and no transaction charge. If you use it, you pay interest on the amount you borrowed and that's it. Also, they refund ATM fees, automatically, and pay 4% interest.
After having some problems with my local bank that got bought by Crapital One, I realized that there's no reason to have an account there anymore, and I was happy about it. I didn't want to be their customer well before I closed my account, and that's where they lost.
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Debit card (choosing \"Credit\") transactions will fall off your account the next day during processing, but will then post to your account once the merchant processes the full transaction.That's a bug. If your system is broken, don't blame the customer.
Goofus gives away his checking account information to just any company for an Automated Clearing House verification (ACH).Yeah, I've never understood this one. What kind of idiot lets third parties withdraw from their checking account?
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-44184-100x100.png\")
Gallant must not bank with Wamu. I was told I could only get overdraft protection if I had $10,000 in my checking account. If I had $10,000 lying around, why do I need overdraft protection?
Of course, given the way I get a different answer from each different person I talk to, that could also be incorrect information.
Also, because I'm tired of the \"join a credit union\" response, can someone recommend a credit union in NYC? The only ones I can find have various restrictions that I do not meet. It seems like big banking is obviously king here. I am probably just switching to the ING checking soon.
As for overdraft protection, I wouldn't classify it as anything like a payday loan. My overdraft account charges 21% annual interest. Not a low rate, but considering that an aware consumer would only carry a balance on that line of credit for a few days, it's a pretty good way to avoid hundreds of dollars in punitive fees and the hassle of bounced checks.
Gallant makes sure he has sufficient funds available before making purchases.
This again sounds like a simple, common sense one, but too many people depend on \"float\" times which are being brought down more and more due to checks being converted to ACH transactions, check 21 as well as other method to cut down on transaction time.
Sure, but that's a two-way street. If checks are going to be processed faster, I would hope deposits are too. That is, if a check is able to go through and withdraw from my account on a weekend, then my weekend deposits should be credited to my account equally quickly and easily.
Actually, banks need you because without depositors, they have no money to use on the lending side. On top of that, when audited, the FDIC looks at their loan to deposit ratio, and if it is too far skewed one way or the other, they take a hit. When you see a bank offering high interest on a deposit account, it means they either need to get their loan/deposit ratio up, or they plan on expanding their lending department in some way.
I used to work in the customer information area of a bank, and one of the things we had to drill into officers' heads was that a high deposit balance or a high loan balance did not mean a profitable customer. The profitable customers are those with several services through the bank, a good mix of account types, and, obviously the ones who bounce a lot of checks because, well, they paid a lot of fees.
dogmatixx,
I don't know who you bank with, but my bank charges $10 per transaction in an 'overdraft protection' plan, in addition to the APR. If I were overdrawn by a few bucks, that would translate to a much larger APR. I fail to see how that isn't usury.
http://www.businessweek.com/magazine/content/05_18/b393108...
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I got a notice from my tax assessors office that my last payment wasn't received. Ugh! I went down to my bank, WF, to place a stop on the check (I know, only six months) and the person face to face with me would not wave the $30 fee. I argued a little and walked away disappointed. I got home and called the 800 customer service number. Talked to a nice rep who was more than happy to give me a courtesy credit. The telephone rep trumped the actual person!
Now I know never to go into a phone store, except to get the info about phones and features, and never expect a real person standing in front of me to give me a break, but instead to call and be nice to the ALMIGHTY 800 SERVICE REP!
I like the part where customers are foolish because they don't realize the numbers on your ATM receipt that say current balance and available balance don't actually reflect the current or available amount of money in one's account. See, you can't rely on the plain meaning of words; you have to read the fine print.
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@spanky:
Goofus gets all the chicks.
We chicks may want to DATE guys like Goofus, but we want to MARRY guys like Gallant. ;-)
What's with all this credit union nonsense? There is NOTHING inherent about them that makes them better than banks. I have heard plenty of stories about credit unions being terrible, and because there are no owners to answer to, there's no recourse.
@Fuzzy_Duffle_Bag:
You can search for a credit union near you here:
My boyfriend tried it when he was looking to join one and get an auto loan, and I couldn't believe how many came up for the average person in central New Jersey.
I'm joining the credit union choir.
Credit unions are non-profit. That means that any net gain they end up with goes back to their members in the form of better rates and lower fees. Banks exist to take your money and give it to their shareholders. Nothing more; if they happen to give you something you want in the process, great, but they don't really care either way.
I've been a credit union member for nearly ten years, and I have nothing but good things to say. They had free online banking *ten years ago*. That, along with free checking, no-hassle overdraft protection (I didn't even need to ask for it), great interest rates and a great deal on my car financing...yeah. They're also part of a credit union network that's all over the country and lets me do my financial stuff even when I'm in a different town. I listen to my friends talk about their banking troubles and I just shake my head.
@star_: When referring to the statements, MY bank does issue all standard privacy updates and the like, but they are released WITH the statements. All updates to the products and changes to them are either printed in the \"Announcements\" area of your statement or included in a addendum with the printed statement.
It is done this way so it is easier to reference \"the update for that price change was included on your October 2006 statement, I can reprint that statement for you if you like.\"
If sent separately it can always be claimed that \"I didn't receive that notice.\"
I'm sorry for being so bold and cryptic in this post but I have my job to consider. Oh, I also didn't send this email. I can tell people where I work, but I'm not allowed to disclose internal information.
Hmmmm. $6.00 Statement Copy, $25.00 Express Card mailing fee, can't have anything but a paper statement zent, has to call the service number to get the ATM unblocked after 3 failed entries... I do believe I work for the same bank as the submitter. Unfortunately, I'm not allowed to say what bank I work for.
But given the final \"Goofus\" statement, it is a State Accredited Financial Institute and is thus not Bank of America. So, knowing it has to be a state bank, that means the official title would be ??????? Bank of [State]. And from what I have read, I would guess that but the email either came from Louisiana, North Carolina, Rhodes Island, or Pennsylvania. Everything fits perfectly.
Now, having spent three paragraphs doing everything I can to not identify who pays my paycheck, I can say that there is a lot of information about banks that consumers simply don't know. I wrote a huge list for http://iwillteachyoutoberich.com but Ramit hasn't posted it yet.
Since the consumerist was extra nice and allowed me to comment back, i did first want to point out the update that was posted:
http://consumerist.com/consumer/banks/banking-dos-and-dont...
Though just a general statement, Overdraft Protection can come in many forms. Some better than others based on your bank and the product you are in. Even at my bank, some accounts carry a fee to \"transfer\" the money from your Overdraft Credit Line or from your Savings. But it is a once per night fee, same price to cover a transfer of $5 as it is to cover $500.
Now these products were not made to be used like \"payday loans\", which is actually part of the reason WHY the fee is imposed on some accounts. It is meant to be used when a \"mistake\" happens, not to go Christmas shopping. In fact, if you attempt to make a purchase in your account and you have a low balance (or zero balance), the transaction may be declined even if your Overdraft Credit available balance is $1000.
Some people also abuse the service even when it comes from savings, forgetting there are regulatons guiding how many electronic withdrawls can be made from a savings account. (See http://www.bankersonline.com/regs/204/204-133.html )
The reason cs_ninja (from a community BANK) says to use the debit card as a \"credit card\" is because the bank makes money on the transaction vs. paying a fee for the pin-based transaction. It's called \"interchange income.\"
Credit unions are regulated by NCUA, an agency of the federal government. They are OWNED by their \"members\" unlike banks that are owned by a few wealthy stockholders.
Credit unions offer better interest rates on loans and deposits because they are a not-for- profit financial cooperative. All earnings are returned to their members in the form of better rates and additional services. Not only that, credit unions treat you like a friend instead of a number. At credit unions, PEOPLE come first.
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What bank is this guy from? Some of the stuff I know isn't true for my bank (Chase), like paperless statement enrollment as well as the timing for pending/posting of debits. A little perspective on who we're hearing from would be helpful.
Also, I freaking adore Goofus and Gallant.