Finally after 5 visits to ASB Bank in Wanganui, NZ I finally got to resolve a discrepancy in my bank account. Having finally met the branch manager (Robin) the issue was resolved. She was a sweetheart. Very agreeable and consoling. I think she was even going to shed a tear when I said I was unable to sleep for several nights. A pleaser or a genuine empathiser....who knows and who cares. I just want decent service.
I probably sound like a victim now, denying personal responsibility...but give me the chance to describe some of the circumstances.
I originally set up this ASB bank account when I moved to NZ. At the time it was an easy process to set up an account. Unfortunately I did not realise that it was a subsidiary of the Commonwealth Bank of Australia (CBA), who has been a dire risk to my financial and psychological well-being in Australia. Was it the same bank? Or is this just the way banks are. We might hypothesise that all banks are like this. After all they have a lot of market power, and really there are only a few banks in each country in a position to offer full service banking.
What becomes apparent when dealing with these banks is that, in the process of streamlining their processes, they give utterly no regard for the interests of the customer. Basically there is no thought process at a customer level. All fees are calculated at head office using super-computers. The local bank manager is just an information collector. The information then goes through to head office where it is run through the computer model, and bam! You have a decision. The problem is that:
1. The people that designed these systems gave absolutely no regard for the customer
2. The staff in local branches who deal with customers feel compelled to defend the bad system that they are employed to use. They can get quite annoyed because many customers complain about their systems, their punitive fees, the high level of the fees.
3. The staff who finally recognise flaws in the system take no steps to tell head office of the problems they are having. The branch manager is required to make changes to override head office computers.
4. Head office staff fail to see the impact of these problems. They are directed and beholden to the head office Vice Presidents, etc who are more concerned with profitability because they get stock options.
I have even had a case of a computer system over-ride a problem that a member of staff has corrected. The implication is that I was on that occasion forced to go back to the bank to correct a problem which I had already corrected.
In this latest incident, I had an automatic payment deducted from my bank account which I was no longer using. Instead of calling me or having an automated email system to notify me that the account was overdrawn, they adopted a process of automatically setting up an overdraft facility. When I received the statement it was $24 "Overdraft" (OD), so I paid $25 to settle the account. At the time I complained because whilst it was an oversight on my part to not have money in this account. Why should the bank have the power to charge $25. Information at hand tells me that the cost to the bank of this transaction was about $1, so they are making a 25x mark-up. Incidentally, this is not how banks are supposed to make money. Why do I say that. Well they are not in the business of charging punitive fees for managing accounts. This is a new development. After all, the insurance company trying to automatically debit my account did not bill me a punitive fee for defaulting on the payment, so why is the bank doing it. Its not like they have incurred any cost since they did not make the payment. If there was any such cost, it would have been a fraction of a $1.
I went in to pay the overdraft on the basis of my latest account, presuming the matter would have been settled. I also went to my insurance company to cancel the automatic payment. A month later I received my next statement. I now had a $47 overdraft, thanks to their deferred method of applying 'punitive' fees, plus interest. It seems the manager did not consider other fees ensuing, as well as failing to look at my account. Anyway he agreed to refund $25. I thought this would lead to a net $1 balance.
The next statement I did not receive. When I finally received the March statement, it had a $67 Overdraft. I could not believe it. I went to see the bank teller who was responsible. He said they are the bank fees. I explained my case, and he said the bank manager would only agree to refunding $39. He also implied there would be a fee to close the account.
In any respect, I had gone from $1 to $67 account in credit, with an offer to credit me $39. I was not happy. It took 5 attempts to contact the bank manager. She was never available, and they never called me to resolve the matter despite leaving my number.
The problems I have is this:
1. Service 1: Poor follow up by staff and manager
2. Service 2: Lack of consideration by staff for customer interests
3. Poor market structure - banks should be in the business of lending money, not charging punitive fees for systems that they set up. Systems which appear 'designed to fail'.
4. Bank capital spending: Senior bank staff should not receive performance incentives based on profit because they tend to under-spend on systems in order to artificially raise profits in order to accrue profit incentives like options.
5. Poor pricing structures - banks should not be able to or charge 'punitive' fees for services, as it creates the wrong types of incentive structure and underscores an asymmetrical business-customer relationship in an industry already open to oligopolistic market pricing. i.e. Even if there are smaller banks, the majority of wealthy people are beholden to those banks which offer full services. There is probably a high level of collusion between banks on fees. They should be required to derive all profits from the spread between the interest rates on loans and deposits. i.e. The spread.
6. CEO incentives: Bank CEOS, in fact all CEOs, should be awarded incentive options on the basis of some relative pricing structure, as opposed to the absolute pricing structure apparent with current regimes. i.e. I believe the current system is a scam between CEOs and boards. It ought to be readily apparent that there is a huge salary and incentive disparity. I suggest ASB CEO options should be based on the gains in the 5-year moving average of the company's stock price relative to banking industry stock sub-index. This is the best way to depict the performance of the bank.
7. Reporting: Banks, indeed all companies, should be required to engage in dynamic reporting. i.e. There should be no secrets. We should be able to see the revenues flowing into a bank. i.e. We should not have to wait 4 months for an annual report. We should have instantaneous real time reporting. There is no reason why this could not be done. Or at least one week delayed release if vetting is required.
The reason why banks are able to get away with this type of crap is because of government. I lodged a complaint with the NZ Commerce Commission, and I received a stock bureaucrat reply that they are under-resourced, and they have too many bigger concerns. I argued that this a major issue. Banks are making huge profits derived from fees. This has to end. They are extorting money from customers. Going into the bank today, the manager was pleased to tell me that they have reduced their fees from $25 to $10. Well great! "You mean to say that you are not stealing as much from me each week". Gee thanks! People do not accept this token gesture. This system is so wrong. Evil! I don't say that lightly. This is what fascism version 2 looks like. Version 2 doesn't have a black mustache and persecute Jews.
You are supposed to have rights! Do you really believe so when the government professed to have regulators, but it does not give them resources. Gives banks the power to establish arbitrarily any fees, then the power to take over the competition so you don't have a choice. The government will not complain because it likes arbitrary structures like legislation. We used to have 'principled' common law. Now we have arbitrary statutory law making us slaves to government taxation and corporate fees.
Andrew Sheldon www.sheldonthinks.com
