Sunday, January 3, 2010

Another Reason I'm Divesting From Bank of America

And another reason you should ditch your big bank for a non-profit, member-owned, democratically-run credit union...

Bank of America will exploit your vulnerabilities to suck more money out of you.
BofAvampires.jpg picture by betterthanmachines
A personal case in point:

My wife and I recently were victims of identify theft. Someone in the DC metro area was going around spending hundreds of dollars at a time with our credit card, even though our actual cards remained safely in our wallets. Around the same time, a Bank of America mortgage representative called me "to discuss the home loan [I had] applied for." With a sinking feeling in my stomach, I explained that I had not applied for a home loan and, in combination with the credit card fraud, this sounded like identify theft.

I will give BofA credit for one thing. They very quickly detected the fraudulent credit card use, deactivated the card, and notified us. And they made no effort to stick us with the bill for those charges. Apparently they know our spending habits so well that they had no doubt that it was not us on that shopping spree. That part worked well, even if it is a little creepy how they knew that $200 spent at a Target and $300 at a K-Mart a couple suburbs over from where we lived smelled fishy. So on the credit card aspect, Bank of America gets an A+.

But I give Bank of America an F on the broader identify theft issue. When I first spoke to the mortgage specialist and explained the situation, she said she would look into it, talk to their "fraud department," and call me back. When she did call back, she sounded exactly like she did first time she called, cheerfully wanting to discuss my loan application. This time, she even wanted to tell me why it wasn't approved. Good Lord! Had she completely forgotten the previous conversation? She had indeed. And the loan application had even advanced since we last spoke! After some frantic re-explaining, she gave me the number for the "fraud department."

Mistake: Thinking The Bank Is Your Friend

OK, good, the Fraud Department. They'll know what to do, I thought. They have specialists, I was told.

It was late in the evening when I finally got a hold of Bank of America's "fraud department." I relayed the whole story once again--the credit card fraud and the loan application. The guy on the line seemed to understand and said that we would get everything taken care of. He told me I needed to join the Privacy Assist program, where my credit files would be monitored and I would have identify theft recovery specialists on my side. OK, great, let's hurry up before the thief takes out a big loan, I thought. Then, as he continued talking through what amounted to the fine print, I heard him reference "a 30-day trial period at no cost."

"Whoa, hold on," I said. "I don't want to purchase another service from Bank of America. I don't want to buy anything. Please do not enroll me in any 30-day trial. I just want to get this identify theft situation taken care of. And if a crime was committed here, don't we need to contact law enforcement?"

"Our specialists handle that," he answered. "And sir, you would not pay anything for the first 30 days. At that point, if you like the service, you can keep it. If not, you can cancel."

"Yes, I understand how a trial period works," I said. "But I don't want to sample anything. I just want my bank to help me restore my financial identify, repair my damaged credit, and advise me if there are other steps we need to take."

His answer was probably the most honest and human thing he said in the whole conversation:

"Sir, this is really all we do for this type of situation, for identify theft cases. We direct people to the Privacy Assist program. You'll get it free for 30 days, and then you can cancel if you like."

Feeling like I had no other options and I had to do something quickly, I signed up for the program, promising myself I would cancel it on day 29. BofA certainly knew better than I did how unlikely that was. I wonder what the numbers are for that sort of thing. What percentage of people actually do successfully cancel before the trial period ends? Life happens. Other things come up. When I realized that the 30 days had come and gone, sitting around on hold to cancel this worthless service was just another thing on my to-do list.

Making It Seem Like They Need to Exist

Let me save you the same trouble and tell you what the Privacy Assist Premier service will give you for $13 a month: Bank of America will email you once a month saying they detected "no significant changes or activity" in your credit files. Of if you open a new line of credit (I bought a car during this period), they will email you telling you that you did that. (These emails begin with "ATTENTION DAVID! ATTENTION!") You can get virtually the same thing for free by calling any of the three nationwide credit bureaus and putting a "fraud alert" on your credit report. I never spoke to one of BofA's vaunted "specialists" by the way, but maybe they exist somewhere.

This is one small window into the larger truth about Bank of America and the big banks in general: They are mostly useless. They do for a price what you can get for free elsewhere.

Breaking Free of Big Banking

Yesterday I finally called Bank of America to cancel my Privacy Assist Premier service. I'm a little embarrassed to say that they billed me $13 a month for six months for something I could have gotten for free. The guy on the other end of the line was working hard to keep me in the program. When he said in passing that he could see I logged into their website that day to read the policy details of the program, it didn't help his effort at all. It was creepy. I had to tell him five or six times, in increasing volume, that I wanted out before he quit pitching me new offers and finally canceled my enrollment.

The point is not that $13 a month hurt (it didn't) or that the Privacy Assist program sucks (though it does) or that I was faultless (I made a series of mistakes). The point is that I went to Bank of America worried and in a hurry, and they profited from my vulnerability in a way that offered me virtually nothing in return. It's deception and waste. Vampire bats don't suck out all of their host's blood when they drink. They just take as much as they can without causing the host to take notice. Bank of America calculates that the 30-day trial means you won't feel the bite and that $13 a month is an unnoticeable amount of blood.

But this event helped me realize that Bank of America is a vampire in a larger sense too. Like the other big national banks, they are sucking our money away simply to make themselves fat. I do checking, savings, and credit card with Bank of America. They siphon off as much money as possible from each of those accounts. They use a lot of that money to pay their executives more than they are really worth and to lobby for more corporate vampire-friendly laws. There is nothing I get from Bank of America that I could not get simply by pooling my money with the money of lots of other ordinary people in a non-profit, cooperative financial institution.

That is why I am in the process of closing my Bank of America accounts and moving my money into a credit union. There, my routine financial transactions will no longer feed the vampires. And as a bonus, I get better rates on my accounts, precisely because my money is not wasted on vampire profit and lobbying Congress destroy the country.

If you haven't already done so, consider moving your own money out of a big national bank and into a credit union. Locate a credit union here. If you have trouble finding one, you can contact your state credit union league. Odds are, you are eligible for membership in at least one credit union. If not, has a good resource for finding the next best thing: a community bank.

It may seem like a small step, but if many of us take it, it would mark an important shift in the balance between corporate power and people power.


Sara said...

you have reaffirmed my happiness with our down home community bank.

i probably have way too much credit monitoring going on, but i consider it peace of mind. when i was applying for a cell phone, i practically had to give them a dna sample to prove my identity, but it made me happy to know a crook wouldn't have it so easy. but you are right, lots of that stuff i could accomplish for free. but! as you say with cancelling before a trial period ends, if it were left entirely up to me, i wouldn't do those free things in a timely manner.

check with your homeowners insurance on the identity theft, too. (said the insurance agent)

Dave said...

Ah, thanks for the expert advice! I do need to do some more looking to see if anything else was (or still could be) affected by this whole ordeal.

stricklangela said...

This is a wonderful post, and something from which many (including myself) can benefit. I have had many issues throughout the years with Bank of America. They have, time and again, attempted to charge a monthly maintenance fee to my savings account, even though my savings plan with them specifically states that I will NOT be charged such a fee. Similarly, the company I work for has had money extracted numerous times for "fees" which when explained are vague at best. BofA has always reinstated said fees right back into the account when this is called to their attention - well, that is after either the comptroller or myself has called only to a heavy-accented, outsourced, scripted rep, struggled to explain the situation to them, asked for their supervisor, gotten transfered only to have the call fail and have to call back, being told that their department is not responsible, etc. All of this has me convinced that what they are hoping to accomplish is to randomly extract money from your account without your noticing. When they are caught red-handed, they give you a BS excuse and put the money back in your account. The relationship is like a friend to whom you continue to lend money and never get it back. When you catch them trying to steal money directly out of your purse, it's time to end the relationship. Vampirical, indeed.

Dave said...

Right on, Stricklangela. I think that what often looks like disorganization and confusion on their part is actually strategy. Transfer the call to another department. Transfer it again. The call drops. You call back. Oh, sorry, that office is closed now, you'll have to call back. They know that many people would rather just be robbed than sit on the phone and chase down a little shred of justice. It's high time to be proactive against the big banks (by moving our money out of them) rather than reactive (by begging them to suck less blood from us).