According to a recent Public Interest Research Group in Michigan Education Fund (PIRGIM) study, the majority of common consumer complaints revolve around bank checking accounts.
The non-profit group examined approximately 19,000 complaints made to the Consumer Financial Protection Bureau since March 2012 and found that not only most complaints were checking-centric, but also big banks accounted for the majority of the issues.
Eric Mosher of PIRGIM explained that the report was not to point fingers but rather to identify issues to create solutions. “The point of the report is to give an overview of what the CFPB has found and to give some sort of critique of what the CFPB would do better. Databases like these will make it so consumers will be more informed going into relationships with banks.”
Nonetheless, big bank issues were quite pronounced. PIRGIM listed the top complaints overall and by deposit--big banks consistently lead the list:
Banks with the most complaints overall:
Banks with the most complaints per deposit
Mosher adds that the examined database only took into account the complaint and no determination was made regarding whether the bank was truly at fault. In terms of checking issues, 78% of the problems focused on opening, closing and managing accounts.
One reason Mosher believes that the top 25 U.S. banks accounted for 90% of the complaints was because these banks have the most customers. However, credit unions representatives have their own theory.
"I believe the frustration with big bank checking, or any product with a big bank, is that big banks are not locally owned,” says Scott Burgess, Rivermark Credit Union’s ($555 million, Beaverton, OR) President/CEO. “They're also for-profit financial institutions that prioritize shareholder interests above their customer interests. And that tends to work against consumers. That is a key difference between banks and credit unions."
“In a nutshell, consumers are tired big banks changing the rules on their checking and charging more fees,” Burgess continues. “Our Free Rewards Checking account has over 880 account reviews with a member rating of 4.8 out of 5 stars. And what's not to like. No minimum balance, No monthly fee, earns our highest deposit rate, offers ATM fee refunds nationwide and you earn debit card reward points.”
Burgess also referred to a member’s comment to further illustrate his point: "A couple of years ago I switched from a large corporate bank to Rivermark and I've never looked back. Their staff has been incredibly friendly, both in the branch office as well as over the phone. Their high level of customer service is especially important to me because I travel a lot and need account assistance from abroad. Their online banking is easy to use and I have never been charged any random, unexpected fees. All-in-all an excellent experience."
Other credit union proponents echo Burgess’ sentiments. "To us, the checking account is the foundation of the relationship. So it is imperative that we continue to secure that rapport by offering a product that is easy to use and affordable," says Stanton Davis, vice president of marketing at Alabama Telco Credit Union ($610.1 million, Birmingham, AL).
In addition to relationship building, ease of use may be lost in the big banking world. "We prefer simpler accounts, since they are easier to explain, easier to understand and easier to administer,” says Joe McGowean, vice president of marketing communications at Alliant Credit Union ($8 billion, Chicago, IL). “I suspect more complicated product designs result in more confusion or more frustration and as a result more complaints."
Have you complained about your big bank account but haven’t done anything since? Now’s the time to move to a credit union and put complaining in your rear view.By Gina Ragusa