Report: Banks Make It Really Difficult To Take Your Business Elsewhere

Outrage over fees assessed by banks on checking accounts and other unfair practices has led to consumers attempting to leave their institutions in droves. But as a new report by Consumers Union points out, banks throw up a myriad of obstacles that can confuse consumers who are trying to switch banks.

“Consumers may be fed up with their bank but they can encounter roadblocks that make moving their money a real headache,” said Suzanne Martindale, staff attorney for Consumers Union. “Some bank policies are designed to make it challenging for customers to walk away. That creates customer inertia and stifles competition, making banks less responsive to what consumers need.”

So what do you need to know? First, opening a new account at another financial institution can take time, a few days or even a few weeks. After you transfer direct deposits and automatic payments out of the old account and into the new account, that’s the time to close your old account and move funds into the new one.

That’s where it can get tricky, even for the savviest consumer, says Consumers Union. It reviewed bank policies at the top 10 retail banks in the U.S., along with a survey of banks and a secret shopper investigation, and found a bunch of roadblocks in the process of switching banks.

• Banks try to ensnare customers with new products, making it harder for you to move. Re-routing your automatic payments and deposits can take four to six weeks, in an often intimidating, complicated process that discourages you from switching. It can also be tough to have enough money to maintain two accounts during the switch.

• Fees to close accounts and transfer money can be another obstacle at banks like HSBC, PNC, and US Bank, where customers are charged $35 to close any account open for fewer than 180 days. BB&T and Citi charge a $25 fee if the account is closed within 90 days.

• Zombie accounts are a problem as well – Chase and Bank of America sometimes reopen old accounts after they have been closed by customers. These accounts can result in customers owing money in penalty fees or monthly maintenance.

Consumers Union is calling on Congress and the Consumer Financial Protection Bureau to consider a number of policy changes to enhance consumer choice and bank competition.

• Banks should be required to bear the responsibility for transferring a customer’s automatic payments and deposits from the old account to the new account within 14 days

• Banks should provide same-day electronic fund transfers at no cost to consumers
Check hold times should be reduced so consumers can quickly access deposits in new accounts

• Banks should be prohibited from assessing unfair fees for closing accounts

• Banks should be prohibited from reopening accounts after consumers close them

• Banks should be required to provide clear and accessible account closing procedures

• Bank regulators should examine the feasibility of portable bank account numbers to facilitate easier bank switching.

For tips on switching banks, check out Consumers Union’s “Move Your Money Checklist.”

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  1. Schildkrote says:

    “Outrage over fees assessed by banks on checking accounts and other unfair practices has led to consumers attempting to leave their institutions in droves. But as a new report by Consumers Union points out, bank’s throw up a myriad of obstacles that can confuse consumers who are trying to switch banks.”

    Behold the dreaded apostrophe, a veritable roadblock of punctuation that not even a vaunted Senior Editor can use correctly.

  2. nbs2 says:

    I’m generally in agreement with CU on this, but not with the portable account numbers. With phone numbers, a universal system, with centralized government distribution, was in place for years before portability, making it possible to change systems without risking overlap of numbers. With bank systems, each bank currently uses its own system, including different lengths and methodoligies. To try to unify the system at this time would be madness.

    • dush says:

      It would be difficult, but the technical hurdles don’t mean it isn’t a good idea right?

      • NeverLetMeDown says:

        Cold fusion, faster than light travel, and a decent movie with Nick Cage would also qualify if “a good idea, regardless of whether it’s in any way feasible” is the standard you want to use.

        • dush says:

          So you believe a more unified bank account system is not in any way feasible?
          Are you from the dark ages?

          • NeverLetMeDown says:

            Is it feasible? Sure. Lots of things are feasible. Look at the cost/benefit, though:

            Benefit: Makes it slightly easier for people to switch banks.
            Cost: Tens of billions of dollars (Y2K cost ~$400BN, this would be at least 10% of that), which _will_ get absorbed by customers, in some way shape or form. Massive turmoil when some conversions don’t go through (paychecks don’t get correctly deposited, mortgage payments don’t get deducted, etc. etc.).

            Bottom line, you COULD do it, but it’s a massive waste of resources for only a minor gain.

    • JJFIII says:

      That is nonsense. It would be simple to have it done. Somehow ALL these larger banks were able to make account numbers work when they “merged” with failing banks. They could easily set up a new system of account numbers very similar to a SS#, a DL# or a phone number. Hell they could even do something like a VIN# that every car has. If a person or company has multiple accounts it could be followed by a -2 or -3 or -4 at the end of the number to signify it is multiple accounts.
      It’s funny how I can port my cell number in a matter of minutes, but to change my direct deposit can take anywhere from 2-8 weeks. On top of that, there is no warning of when it will actually happen and which account it will go in, until it actually happens.

      • nbs2 says:

        And we see that large banks don’t have issues when they merge?

        Setting up a new system would alleviate the issue, but trying to transition in a new account numbering system instantly is bound to fail. You could install a new numebring system, phase it in over several years, and then install a portability regime, but that wouldn’t change my assertion that unification at this time would be madness.

        DL#s aren’t unified. Each state uses its own system.

        As for your individualized account numbering system, would individuals be assigned account numbers by the government or by the first bank to issue them an account? What happens in cases of joint account ownership or custodial accounts? When someone changes their account number because of compromised security, would all numbers be changed? What if someone closes an account – would the suffix be recycled? I go through ING DIrect accounts like candy (I currently have around 10 active accounts)

        Finally, the issue of direct deposit. It sounds like you are suggesting that by having a portable account number, the payor’s bank (XYZ) would simple continue to deposit fund in account 123, without regard to the bank receiving the funds. I suspect that XYZ would be very concerned about ensuring that the move of account 123 from Bank ABC to Bank DEF was initated by you and not as the result of a security issue. Which would still take time. Getting rid of the other roadblocks to account movement would do more to help the consumer than account number portability.

      • Doubting thomas says:

        No it is hardly nonsense.
        I work for a bank, we recently merged with a smaller bank. 2 fully staffed IT departments will be working overtime for the next 3 months before we are ready to do data and account conversion. We then have the next 6 weeks scheduled to work out any bugs, errors, or kinks.
        That is 2 small banks moving less than 10,000 customers.

    • Mike says:

      Then how come checks work? They work because there’s a universal system for account numbers.

      • NeverLetMeDown says:

        No, they don’t. There’s a universal system of ROUTING numbers (the numbers that tell you what bank you’re going to). The account numbers vary wildly, and are, in some cases, replicated from one bank to another. Think of the addresses for an apartment building (routing) and the apartment number (account number).

        Saying that there should be a standard, universal account number, that moves with you from bank to bank, is like saying that every apartment number should be unique, so that, instead of living at 123 Main Street, Apt. 3A, you lived at 123 Main St, Apt 3749824233.

        It would also require determining which numbers overlap, and issuing huge numbers of new account numbers, across thousands of banks.

        Certainly, if you wanted to set the system up with unique account numbers from day 1, you could have done that. Doing it today, however, would be an absolutely massive, incredibly expensive, sure to cause huge turmoil undertaking (because there’s no IT transition where at least a small % of the change doesn’t go wrong), with minimal benefit.

    • jimbobjoe says:

      It would work by making the entire routing number+account number the account number. And you move that from bank to bank.

      This could be done by either having a lookup database saying account “123456789 12345″ is at Big Brother Bank of Beverly Hills.

      Or it could work by having the bank that owns routing number 123456789 point the computer where it needs to go: “no no…this account has moved. It’s currently at the Big Brother Bank of Beverly Hills. Go look for it there.”

      In either event, this means that routing numbers would become disassociated with a particular bank, but it would be feasible.

  3. dush says:

    “Banks should be required to bear the responsibility for transferring a customer’s automatic payments and deposits from the old account to the new account”

    I don’t understand why this wouldn’t be taken care of by the consumer with their own employer and creditors. Why is it the bank’s responsibility to make sure you get your money or your bills get paid?
    I agree with all the others though. A portable bank account number that stays with you would be great, like being able to transfer your phone number to a new carrier.

    • incident_man says:

      Because it’s usually the bank’s fault that the customer wants to switch, be it a “policy change”, a new fee (typically because the CEO is unhappy with how many zeroes are in his paycheck), minimum deposit requirements, etc., that are anti-consumer and possibly anti-competitive. Granted, there will always be those who are switching because the bank won’t honour an unreasonable request, but usually the banks bring it upon themselves when someone decides to leave.

    • jimbo831 says:

      I agree, that part of this is incredibly stupid. If I decide to switch banks (for any reason) why should my bank have the responsibility of helping me set up my bill payments and direct deposit with their competitor? How lazy are people getting now?

    • MikeVx says:

      While seemingly stupid at first, the point about moving payment information to the other bank should be possible. As a practical matter, there is only one player in the bill pay space, CheckFree, or whatever they are changing their name to now. I know of no bill pay system that is not CF behind the screen, they bought the only serious competitor, Transpoint, that the sector ever had.

      CheckFree could be told to move the payment profile from one bank to another, and save the customer the effort. Deposits are another issue, and if you were stupid enough to use vendor-initiated-auto-pay, this is your chance to fix the problem.

  4. Blueskylaw says:

    Is this even a surprise? Banks are some of the most vile and greedy companies on the face of this earth. If there was a button that would give them an extra million dollars in profit but would cause the death of a thousand people, the banks would hire a round the clock crew to push that button until mankind went extinct.

    • Awesome McAwesomeness says:

      Best internet quote ever.

      “If there was a button that would give them an extra million dollars in profit but would cause the death of a thousand people, the banks would hire a round the clock crew to push that button until mankind went extinct.”

      • Blueskylaw says:

        Only when the last tree has died and the last river been poisoned
        and the last fish been caught will we realize we cannot eat money.

  5. Schildkrote says:
  6. BurtReynolds says:

    Opening my new CU account took 15 minutes.

    Closing my BofA account and receiving an envelope of cash took 10 minutes.

    Driving to the CU to deposit my BofA cash took 15 minutes.

    Changing the account and routing numbers for electronic payment of CCs and student loan took 10 minutes.

    That really wasn’t hard. I do agree with outlawing the “zombie account” though. I made sure I had no outstanding checks, never use auto bill pay, and immediately (as stated above) changed my electronic payment settings to not mistakenly try and pay from BofA. Ideally, even if I did, it should just bounce like there is no account with that number.

    • gaya2081 says:

      Depends on how many things you have set up with your bank account, and some employers take 2-4 weeks to change direct deposit. I took a lazy 6 months to switch everything over, and 3 of those months were just the old account sitting open with about 1,000 in it just in case something tried to pull from it. I finally closed it permanently last month.

      • BurtReynolds says:

        I forgot, I changed my direct deposit the next day and my company implemented it the next pay period.

        I couldn’t leave my BofA account open once I switched the DD. BofA charges you fees without the DD on the account I had.

  7. Hermia says:

    Ten years ago I switched from a bank to a credit union after they got rid of fee-free checking. The local bank had been gobbled up by Bank One. I opened an account at a credit union, waited for all my outstanding checks to clear, walked into a branch, got the remaining money and closed the account.

    Months later I was called by the bank’s collections stating that I owed them over $500. Come to find out the bank rightly gave me a few cents in interest when I closed my account, however one of the bank’s systems showed that interest to be a negative $0.03. My account was not closed but thrown into overdraft. Because it was “closed” in one system I never got any notifications, meanwhile the fees were piling up in the other.

    Collections repeatedly called and sent me letters stating that I owed them money, and that there was nothing I could do but pay.

    I went into the original branch and was told that there was nothing they could do to reverse the fees, and that I should pay or talk to Collections.

    Collections finally decided after weeks of waffling that the branch manager could reverse the fees, but only that particular branch manager. Nothing they could do.

    I went back to the branch and the branch manager told me there was no way she was reversing those fees and that I had to pay. “Not my problem that you overdrew your account.”

    After finally involving the BBB, my state rep, and threatening to get a lawyer the branch manager reversed the fees and closed the account… or said she did, anyway

    A year later I start getting statements again, after Bank One was taken over by another even larger bank (can’t remember which one now). The account is active again with a negative $22 in maintenance fees.

    The whole cycle started all over again. More letters to the BBB, more letters to the bank, more visits to the branch. Another three months to get it all settled.

    Never will I bank with a big bank again. I am with a small credit union, and not once have I had an issue in the last ten years. I aim to keep it that way.

    • orion43 says:

      Wow all that over 03 cents? Reminds me of when I had to pay the goons at BofA over $500 to finally close my account. That was over 15 years ago when I wasn’t even 18 yet. I went to a credit union and never looked back.

      • Hermia says:

        Seriously, 3 cents. It was the most asinine thing I’ve ever been through to this day. Three cents they owed me, as well.

      • Hermia says:

        Seriously, 3 cents. It was the most asinine thing I’ve ever been through to this day. Three cents they owed me, as well.

    • bikeoid says:

      File a complaint against them at http://occ.gov/ – they’ll come around very quickly; at occ.gov, select “Bank Customers” and go from there.

  8. Ihaveasmartpuppy says:

    • Banks should be prohibited from reopening accounts after consumers close them

    When I closed out our BOA accounts last year they told me any attempted deposit or withdrawal on the account would result in it being reopened. I voiced my MAJOR displeasure with that statement, to deaf ears of course. Why on earth is this even possible? For how long – 1 year, 5 years, forever? It doesn’t even seem like it should be legal.

    • castlecraver says:

      Seriously. How can a bank force me to keep doing business with them after I’ve made the decision to cease doing business with them?

      • Difdi says:

        They can’t. But they’re gambling on you not knowing that, or not wanting to deal with the hassle of legally blasting them.

    • dru_zod says:

      I don’t get why they can’t just reject the attempted deposit or withdrawal. If the account is closed and someone tries to deposit money into it, tell them the account is closed, don’t take the money. Simple. Do the same with any attempted withdrawal. Since everything is on computers, there is no reason the bank’s system can’t be programmed to reject any attempted transactions on that account.

    • NewsMuncher says:

      The one thing I see with them saying a bank cannot reopen a closed account would be if they closed it without proper permission and the customer is like “wtf? my account is closed?! Hey! Re-open my account!” But probably it’s just that the customer’s permission should be required for account re-opening.

    • Greggen says:

      If a bank said that to me, I would tell them to expect a certified letter confirming that my business relationship with them was severed, that I would not be responsible for any unauthorized reopening of my now closed bank account, and would consider such reopening of my closed bank account an act of banking fraud and would pursue all legal options in such a case.

      And follow with actually sending the letter to them.

      If you dont agree with the terms, conditions and fees you can close the account.

  9. CubeRat says:

    Excellent advice for people who do not want to think for themselves or be responsible for their own actions. I call BS on this article, I admit I haven’t had to change my personal accounts in awhile, but I’ve helped others. It isn’t that hard.

    FYI: you will always have problems if you cannot balance your accounts (keep track of balances at multiple banks.
    If this is a issue for you, I recommend that you stop auto payments & auto deposits first. Open your new account with cash or an automatic deposit if necessary. Then transfer most of the funds from your old account. Last, close your old account but be sure that you’ve either carefully monitored any last entries, or let it stay open for 5-10 days without any activity.

    If you have multiple accounts at an institution that you want to close, then do so one at a time, transferring the funds into the last account. The biggest problems come with transferring investment accounts or IRAs, and you should really have the investment adviser at your new account help you with those.

    • ARP says:

      Well since you’re perfect and banks have never made a mistake, you don’t need to be on these boards and can leave. I’m sure the people at Red State would appreciate your just-world philosophy.

      For the rest of us, there are fees that only hit once a year, or fees that we were not aware of, unauthorized fees, or fees you just forgot that can create a zombie account. Since it’s closed, you can’t access your account information and you may never receive a notice of the charge and the inevitable fees.

  10. castlecraver says:

    The zombie account thing really chaps my ass. It’s almost like “overdraft protection” redux: ignore the obvious and easy solution (decline the charge) for the one that allows us to levy a hefty fee.

  11. eezy-peezy says:

    I never have any trouble closing a bank account. And good luck trying to collect “fees” after I get my balance down to zero.

    • jamar0303 says:

      Unless, like another poster said, they reopen your account, assess a fee, and kick it to collections.

      • Nigerian prince looking for business partner says:

        And wreck your chexsystems report in the process.

        • eezy-peezy says:

          don’t know what a chexsystems report is, don’t care. Let em put a black mark on my permanent record.

          • SKChance says:

            Except a Chexsystems “black mark” means never being able to have a bank account anywhere ever again. You might care about that.

            • MikeVx says:

              Not ever again, but for 5 years. As scummy as they are, they do live up to their statement that records drop off after 5 years. I’ve told this story before, the condensed version is: Tried to open a Key Bank account on Web site, bad page design caused incorrect state to be entered. While I got an account at a branch the next day, Key sent me to ChexSystems on the error. Contacted three times, agreed to remove three times, blew it twice, I don’t know if they got the third time as the 5 year limit had passed and the record was clean regardless.

  12. NeverLetMeDown says:

    “Banks should be required to bear the responsibility for transferring a customer’s automatic payments and deposits from the old account to the new account within 14 days”

    What possible justification would there be for this? This is kind of like saying “apartment managers should be responsible for moving your stuff.”

    • nbs2 says:

      I look at it like mail forwarding. You would be responsible for notification to payors/payees and the original bank, but if any stragglers or knuckleheads sent credits/debits to the old account it would be forwarded to your new bank.

  13. Loias supports harsher punishments against corporations says:

    Step 1: Open new account.
    Step 2: Do a $1 direct deposit with your company
    Step 3: When account is verified, change deduction to 100% to new account
    Step 4: Close old account by cashing it out, and deposit into new account.

  14. spamtasticus says:

    I got a $200 voucher from Chase last week and after reading the fine print it was obvious that there is a bunch of fine print making it hard to open collect and then close the account. Unfortunately for them I like this sort of challenge and now its a game to see how much of their $200 I can walk away with.

    • kelcema says:

      Chase is easy, and fun. You do have to have some perseverance, though, as they charge a fee if you close the account within 180 days. If closed within 90, they not only charge that fee, but take back the bonus that they paid you. Or the other way around. Also, the branch employee who opens the account for you gets a commission on the account opening (regardless of how little you use it!) but that commission is reversed if you close within the six months. Being that I like to keep the branch employees on my side…

      - Open account, with just $25.
      – Setup direct deposit from my work to this new account (which then counts as the rest of the $100 minimum they want for the bonus. Just the account itself can be opened with $25.).
      – Within ten days of that first direct deposit, get the bonus. Yay!

      I then set up an auto transfer for a majority (to the nearest even $100, since I know that bare minimum I *always* get paid) of my paycheck, every pay day, from Chase to my actual bank. It’s just one form to fill out and give to them– not that hard.

      After the six months is up, I’ll close the account/cancel the auto transfer/re-direct my direct deposit. No penalties, and the bonus is mine to keep.

      The kicker, though, is that they have a limit of one new-account-bonus per customer… per calendar year. So, I did this is 2010… and last year… and I’m a month away from getting to close my account for this year. $400.00 in bonuses total over three years– not that shabby for about 15-30 minutes of actual work each time.

      • spamtasticus says:

        Nice. I already used one of their deceptive hooks against them. A long time ago they sent me one of those balance transfer checks for .99% interest for the life of the “loan”. The trick was that it was attached to a credit card that has 27% interest and a provision that any payment you sent will go to pay down the .99% amount. I paid off my car which was 9% plus the full insurance I had to carry with the check and never, ever, ever used the credit card. I ended up paying less than 1% on the remaining 8g’s of my car loan and was able to save about $600 a year worth of insurance.

        • kc-guy says:

          Worked for me. Worked even better as I did this shortly after I nearly totaled my car after a lose-lose sumo match with a deer. Progressive wanted roughly the same for full-coverage insurance as my monthly car payment!

  15. Heresy Of Truth says:

    We had this problem a couple years back with Chase. We had everything switched over, direct deposited, and whatnot. Yet, we could not get them to close our accounts at Chase. It took three visits, at somewhere around an hour+ each to get two savings, and two checking accounts closed. it was totally mad how they kept putting us off. We didn’t have any additional fees, but they would not close the accounts the first time because we had used the account two weeks prior, and “had to make sure everything cleared”. The second time, they decided it was still not soon enough, and the third time, we had to sit waiting for about an hour, and spend even more time with someone in an office trying to tell us we should not close our accounts. I could not believe how much effort it took to close those accounts.

    • MurderGirl says:

      These days, hit Twitter and see if you can start a run on the bank if they can’t or won’t give you your money.

    • BBBB says:

      “… spend even more time with someone in an office trying to tell us we should not close our accounts …”

      For this stage it helps to immediately take control of the meeting by making a non-negotiable demand that they fix/change/etc. some policy/error/etc. immediately and put it in writing that they won’t change it again. Add to that a quick summary of how the other bank reps couldn’t help or messed it up. When they claim they can fix it, ask why the other people didn’t.

      If they gave you wrong information or made a mistake, throw in the “how can I trust you after that?” card.

      Don’t let them change the subject – every time they stray from it go back and say that nothing else matters until this is dealt with.

      [Chase had acquired one of my banks so I found myself a Chase customer – I gave them some time because I liked some of the people at the local branch and it was in a convenient location – then they started raising fees, reducing service, and started bothering me with marketing calls on my cellphone (four times they failed to remove the cell number from their system after saying they would.)]

      My Chase retention attempt on my business account lasted 30 seconds.
      The personal account retention attempt lasted longer because I demanded that they show me how the information I wanted could be gotten quickly at the 800 number – I asked them to show me and the manager spent 20 minutes in phone support hell before giving up.

  16. hymie! says:

    banks like HSBC, PNC, and US Bank, where customers are charged $35 to close any account open for fewer than 180 days. BB&T and Citi charge a $25 fee if the account is closed within 90 days.

    If you’re opening and closing bank accounts every 3-6 months, then something is wrong, and it isn’t with the bank.

  17. homehome says:

    • Banks should be required to bear the responsibility for transferring a customer’s automatic payments and deposits from the old account to the new account within 14 days

    - Don’t agree it should always be the consumers responsibility to make sure their money goes where it’s supposed to. All this would do is make lazy and irresponsible ppl more lazy and irresponsible let them blame other ppl for their responsibilities.

    • Banks should provide same-day electronic fund transfers at no cost to consumers
    Check hold times should be reduced so consumers can quickly access deposits in new accounts

    This is a service that costs money, so I have no problem with a company charging for a service that costs them

    • Banks should be prohibited from assessing unfair fees for closing accounts

    - Unfair? That’s very subjective of what unfair is. Who is going to determine this?

    • Banks should be prohibited from reopening accounts after consumers close them

    I agree 100% with this. If there is a problem, they shouldn ‘t close it and inform the customer of why and what needs to be done to close it.

    • Banks should be required to provide clear and accessible account closing procedures

    I find directions already clear and concise, ppl just don’t read. But if they need more, then fine I’m on board with this.

    • Bank regulators should examine the feasibility of portable bank account numbers to facilitate easier bank switching.

    I’m 50/50 on this. Me I would probably prefer a new account #.

    • LadyTL says:

      Why should I pay the bank money for not doing business with them? The only reason for that is they aren’t actually going to close your account and want to recoup the costs of keeping the account open even though you told them to close it.

      • homehome says:

        They have the right to do that if they so choose. And I’m pretty sure it was in your TOS. Ppl get paid to close account, it doesn’t get done by a magical leprechaun that works for free.

  18. InsertPithyNicknameHere says:

    I gotta say, I strongly disagree with those first two bullet points. It should not be the bank’s responsibility to forward your direct debits or direct deposits. Nor should they be required to provide a service to exiting customers for free that they may charge ongoing customers for.

    I also think the final point (portable account numbers) isn’t terribly feasible, based on the current system.

    The other items I could really get behind – there’s no good excuse for zombie accounts, in my opinion, and there should be a clear and easy way to close an account without undue fees.

  19. maratama says:

    Years ago, I went it to close my account with US bank, after they had put a check thru my account for 10 dollars too much. When I went in to tell them their mistake, they froze my account..for their mistake. I get all that settled and a week later we go in to close the account…I took my phone and the number for Idaho’s state Banking commission’s with me. We get there and the bank is packed…we go to close our account and get told that will be 35 dollar fee(illegal in Idaho). I ask to speak with a manager, and am informed he is ‘busy’ I then proceed to say, at the top of my lungs “Fuck this, I am calling the state banking commission, they won’t let me close my account” and start dialing my phone. The manager, who was ‘busy’ appeared at the window in nothing flat, everyone in the lobby was very interested…the person at the banking commission told me to put the manager on the phone. I did and in 5 minutes I walked out with a closed account and the 11 bucks I had in it….

  20. dwtomek says:

    “Zombie accounts are a problem as well – Chase and Bank of America sometimes reopen old accounts after they have been closed by customers. These accounts can result in customers owing money in penalty fees or monthly maintenance.”

    That right there, that should be illegal.

  21. Lyn Torden says:

    “First, opening a new account at another financial institution can take time, a few days or even a few weeks.”

    I went to a small local-only bank and it took about 15 minutes to open a new account. If your “new” bank is making it difficult to OPEN an account, then maybe you should move on and find a better one.

  22. km9v says:

    Blah blah blah, credit union!

  23. Lyn Torden says:

    “• Banks should be required to bear the responsibility for transferring a customer’s automatic payments and deposits from the old account to the new account within 14 days “

    This rule should apply to the party sending the payment/deposit. There should simply be no more than a 14 day lead time requirement AND they must also allow the customer/employee/etc to specify and exact date in the future up to 92 days from the first date this can be done.

    It’s best to NOT depend on the bank with the account being closed, but placing a requirement on them, too, should still be in there.

  24. Bionic Data Drop says:

    Companies have been trying their damndest to make it really easy to join and really hard to leave. That is the ONLY substantial reason for 2 year commitments with TV providers and cell phone providers. It’s not like if I pay for the installation, DirecTV will allow me to pay less monthly because they don’t need to subsidize the cost of paying for installation themselves. Actually, if you don’t commit to 2 years, you get zero discounts and thus pay more. Cell phone service providers are a little different, but not much. It’s still all about keeping customers from leaving through fear of financial burden.

    I’m not one for more government regulation, but there should be measures implemented that stop companies from punishing you for going to their competition.

  25. DanKelley98 says:

    Opened a credit union account by doing it online…all of ten minutes. Approved 30 minutes later. When to credit union to show ID and sign papers and order checks and get ATM card. Another 30 minutes tops. Changed direct deposit at work from my old bank to credit union. Five minutes. Case-closed.

  26. DanKelley98 says:

    Opened a credit union account by doing it online…all of ten minutes. Approved 30 minutes later. Went to credit union to show ID and sign papers and order checks and get ATM card. Another 30 minutes tops. Changed direct deposit at work from my old bank to credit union. Five minutes. Case-closed.

  27. EllenRose says:

    I don’t leave an old bank when I’m sick of it, but most of my money does.

  28. frodolives35 says:

    Am I the rare person who has been with the same bank for the last 25 years. Well I guess that’s not true as it has been bought out twice so I guess I have had 3 banks in 25 years. Funny I have been using only 1 branch location all those years. lol

  29. xanadustc says:

    Wow…I stopped reading the article after I totally disagreed with it after swapping banks a few times…

    Simple solution: Get the new account open, wait a month, write yourself a check from the old account into the new account and leave the balance at zero, after thirty days, most banks will just auto-close an account at zero balance!

    If they do not, go in, announce that it is closed, and be done with it.

    • MikeVx says:

      Now that is essentially how it should be done. The whole close-cash-open is hazardous anyway. Migrating your deposits and payments first, then a check to yourself is simple and gives you time to check that everything is covered.

  30. soj4life says:

    I worked at a bank before and it was just commonly known that it is a tedious process to switch banks if you are a consumer that has alot of financial obligations and also sources of income. It is what it is. Switching over the info for your loans and credit cards can take a few minutes with each, the biggest thing is getting your HR department to get the update quick enough for your next paydate.

    As for the suggestions that this group is asking for, some as going to raise costs and or be impossible to implement; others are reasonable. Bank office departments like ACH are usually stretched to their limit already, mandating that they ensure that your DD info is correct and to send anything coming and go is going to increase hiring costs along with system costs. Banks can already somewhat do this right now between their own account but it is a different game when it involves another bank. I doubt that they can tell a creditor to remove the funds from another source. If it is somehow transferred through the account, the old account is going to be in the negative until the bank gets funds from the new bank, that can lead to loses for the bank if they are holding the bag. Banks are not going to offer free wire transfers, there is a cost to perform that transaction and the banks are going to pass that cost to consumers. Reducing hold times for checks will increase fraud, the hold times are there is give the bank some kind of chance to stop loses. Bank accounts are not the same as telephone numbers, banks create them and not a government agency. Phone numbers are associated to an account, they are not the account themselves, so they are easier to move from account to account like a profile picture on facebook.

    Really banks should not be charging a fee if someone closes an account unless there is a promo with opening that account. You get a gift card, a rice cooker, $10 or $25 to open the account. There is a cost to the bank to have new account numbers created and to send you checks and make a card, but it does not add up to $35. Banks can code how an account is closed, either permanent or temp closed until the next statement. Customer should have the ability to choose that option. Sometimes it helps to have an account reopen if it is caused by a deposit, but most of the time it is a check or debit.

    Some of what is being asked is reasonable, but the sticking points are only going to increase costs and prices for consumers. Some things in life take time, not everything can end like a quickie vegas divorce.

  31. Jeff asks: "WTF could you possibly have been thinking? says:

    I don’t see why it should be up to the bank to change your direct deposit, shouldn’t that be between you and the depositor? I go to my HR department and fill out a form and my DD changes on my next pay period. What the hell does Bank X have to do with any of that?

  32. ripoffnation says:

    If the new bank wants a new customer, then the new bank should help bear the costs/pain of the transfer … screw the old bank.

    Letting anyone directly deduct money directly and automatically from your bank is stupid because it gives up control of your money.

    Small banks and credit unions often let you open accounts quickly.

    To be prudent, it is advisable to open the second account and gradually move funds because, things do go wrong even if the banks were perfectly helpful. Of course if funds are limited this may not be an option.