Fed up with your bank but too frustrated by how tricky it is to take your money elsewhere? You’re not alone: Our benevolent benefactors over at Consumer Reports have been busy polling bank customers to see how they’re feeling about their financial institutions and found that while almost one-fifth of all consumers with checking accounts flirted with the idea of switching to a new financial institution in the last year, many didn’t just because it was simply too difficult to do so.
The advocacy arm of Consumer Reports, Consumers Union, previously pointed out the myriad obstacles banks throw up to discourage consumers from taking their business elsewhere, and it appears those tactics are working.
Those who wanted to change banks were frustrated mostly because of increased fees for routine services, but things like transferring automatic payments kept half of those who wanted to make a move right from doing so,a ccording to the results of the Consumer Reports National Research Center survey released today
“Unfair bank practices and rising fees are prompting more and more consumers to consider voting with their feet and taking their money to another bank or credit union,” said Suzanne Martindale, staff attorney for Consumers Union, the policy and advocacy arm of Consumer Reports. “But many consumers don’t follow through because moving your money takes a lot of time and money and some bank policies make it harder than it should be. We need to make it easier for consumers to switch banks so they have a real choice when it comes to where to keep their money.”
Setting up a new account can take days or even weeks, and then transferring direct deposits and automatic payments between accounts can prove to be a real pain.
According to the Consumer Reports survey, 19% of checking account holders had considered switching their accounts to a different bank within the past year. Those thinking of making a switch were asked their top two reasons for wanting to move. Some of the most common reasons:
• 43% cited fee increases for routine services.
• 38% percent said another bank was offering better terms
• 26% percent pointed to poor customer service experiences
Over half of those who were considering a switch said they were hindered from doing so, citing multiple reasons, including:
• 63% said that concerns about the trouble it would take to transfer all their automatic payments and deposits to a new account kept them from switching banks.
• 37% indicated that the process would take too much time and effort to complete
• 28% said they didn’t want to pay any fees to transfer their own money.
Consumers Union has called on Congress and the Consumer Financial Protection Bureau to figure out a way to make it easier for consumers to move their money and make banks work harder to get them as customers.
Same-day electronic transfer of funds, automatic rerouting of direct deposits or automatic payments and a portable account number you could take with you from bank to bank are all things consumers said would make it easier for them to make a switch.
For tips for consumers who are unhappy with their bank, see Consumer Report’s More Bank Fees Are Coming: How to Fight Back Or Flee.