A Tale of Online Banking

I have been banking online for quite awhile and it has overall been a convenient and trouble-free experience. However a few weeks ago I ran into a problem that got under my skin and it seems worth documenting the experience for others.

I will refer to this particular international banking firm as Slime in this blog. So, over the course of the year I set up a Money Market account and bought a couple of CD's from Slime. These experiences went well enough. They weren't quite as convenient in their online processes as some others but they were paying slightly better interest rates and I didn't mind the extra steps that much. Then one fine day I said to myself - Self, now would be a good time to ladder in one more CD. So I took Self over to their website and checked the rate. Sure enough they were offering a nice 4% for a 6 month CD so I slogged through their process which treats each CD purchase as if they had never heard of me before. 

Fast forward about 10 days and the new CD has been set up and funded electronically from another account. Self logs in and checks the status only to find that the interest rate has been set to only 3.1%! Of course by this time when I check their website the lower rate is the new advertised rate.

Being quite sure I am not yet senile and had properly checked the rate I contacted Slime, electronically of course, and to my shock Slime confirmed indeed I wasn't senile. However they informed me the rate they pay on a CD isn't locked at the time you file the paperwork to open the account. It is instead set when they fund the account and since the rate dropped after I opened the account I was only entitled to the lower rate. This was quite a trap but in reading their fine print it was within the stated terms and conditions. Essentially Slime had written in a clause allowing them to slime their own, in this case loyal, customers. 

I let it go for a day or two but it really was getting under my skin. So I fired off another email saying I found their policy highly unacceptable and bordering on false advertising. They simply responded once again that they were "within their rights" and "helpfully" letting me know I could withdraw my money from the CD if I was willing to pay an early withdrawal penalty. Now I was really peeved! Their "explanation" only served to irk me even more.

So I said to myself - Self, you gotta do something about this. Slime is taking advantage of people and they should be stopped. So I said to myself - Self, visit thy oracle for advice. By which I mean I did a quick Google search and found out which regulatory agency was responsible for overseeing Slime. Turns out it was a federal agency called OCC - no, not Orange County Choppers. I mean Office of the Comptroller of the Currency. I found a handy dandy complaint form, filled it out, and faxed it in. By which I mean I emailed it to Maxemail which turns electronic documents and email into faxes for next to nothing. Being a fair minded guy I let Slime know I was going to file a complaint in advance. Would it shock you to hear - er, read - they didn't respond to that message?

After not very many settings of the sun I get a letter from Slime. They apologized for the miscommunication and restored the rate on my CD to 4%. Now not for a minute was there any miscommunication involved. They're just trying to keep me from pushing my complaint with the OCC further. I feel that in light of the shenanigans perpetrated this year by financial institutions penalties and increased regulation are quite likely. Screwing over your customers isn't going to win you any points with the politicians and regulators.

I'm not sure yet if I will yank all of my money out of Slime as the CDs mature. Frankly money talks and if they offer superior rates I will likely still use them. They did "do the right thing" - with a gun pointed at their heads. However if their rates are only competitive I will take my money away.

And, oh yeah, the OCC promised to contact me after hearing from Slime. I'll tell them I'm satisfied with Slime's apologetic action but ask how I can lobby to ensure such actions become illegal. Any time I get tripped up by something like this I imagine how many times institutions get away with things - because people don't pay attention, because they are elderly or otherwise infirmed or impaired, or just too unsophisticated to know how to fight the system. 

It's a rough world and we need to look out for each other.