I’ve recounted my own sorry experience with Chase, in which branch staff repeatedly misrepresented its business checking product. I’ve closed that account, but Chase nevertheless managed to extract some fees on a supposedly “fee free” account.
Another example of Chase’s aggressive and less than upstanding conduct comes from a reader via e-mail:
I have been unemployed for 8 months now. I would not normally tell any one this except that I have an Unemployment Benefits (UI) debit card from JPM Chase. The card only works at Chase ATMs and the grocery store. When I tried to purchase gas with it or tried it at my community bank’s ATM, it gave an error.
I am in the unusual situation of having a lot of money in the account. I have been living off of personal savings instead of using the card because of convenience. You can’t pay rent via debit card or cash, only by check.
I finally decided to try to transfer the money from the Chase debit card to my community bank account. My bank told me to just have Chase perform a wire transfer for $25. So, I went over to Chase. It turns out that it is not so simple. First off, the UI debit card Texas gave me is a state account managed by Chase. I can take out $2000 per day max. The “easiest” way was to set up a checking account with them. The woman I spoke with was a really good salesperson and I told her so. Both she and another man were trying to talk me into switching my banking over to Chase. Here were a few of the claims:
1. They have 250 layers of encryption so their computers were the safest and most secure among the banks. (Utter rubbish since they had Windows XP Pro desktops and software. I’m in IT Security.) I heard this from the banker I was dealing with and another banker in the next cube over. Encryption confers secrecy, not necessarily security.
2. I explained to them that their customers’ computers were the weak link in their security. Many banks do not have to reimburse business account owners’ lost funds that are stolen by online thieves via trojans on the customers’ systems. She and a third man claimed that all accounts were covered by comprehensive fraud insurance.
3. She claimed that if I switched my retirement accounts and consolidated them into one account with the aid of a portfolio manager at Chase, I could possibly realize 30% yields though I didn’t press her on the time frame of such a yield. It seemed a bit preposterous. She stated that if I rolled my retirement accounts into a portfolio that it could earn up to a 30% yield. I heard her say that twice. She asked me if I lost a lot of money in my retirement accounts and she implied that they could give me a high yield to recover my previous losses. She was appealing to my greed or financial insecurity, take your pick. The thing is, she didn’t say 30% annual yield, or give any time reference for the yield. It could have meant 30% yield over 30 years for all I know, but there was no time period associated with the word yield. That leaves a lot of wiggle room for escape. I likely didn’t look as smart or as old as I was, and I did present her with a state debit card, so she may have assumed I was easy pickings.
She claimed that they did quite well last year. I told her it was due to the government guarantees and the investment side of the company, but she claimed that the commercial side (retail and business) was something like 65% total profits (30% retail +35% commercial).
4. Convenience – easy online bill payments. I have that at my bank, but I don’t use it. I don’t want my account information in too many third party’s computer systems. Also, a coworker missed a direct deposit one month a few years ago and his account overdrafted several times due to automatic bill payments.
I suppose that I am lucky that I walked out of there with all of my fingers. I have never seen such aggressive salesmanship by a banker in my life towards a small retail customer. I now have a Chase checking account with a debit card and the Overdraft Protection is tied into my pre-existing Chase Credit Card and costs $10 per overdraft (It’s $2 per overdraft at my community bank.) and a way to transfer the money from the state debit card to something I control. I should be able to transfer all of the money out of there within a week or so and then cut my community bank a check. I’ll still be stuck with a checking account I didn’t want, and I’ll likely be pestered every time I try to transfer money from the original UI debit card to the Chase account. The alternative would have been to walk out of there periodically with $2000 cash which wouldn’t have been very wise.
I thought that the UI debit card was a bad deal, but I didn’t realize that it was even worse because Chase is managing a state account and limits the amount of funds that can be removed at any given time. The state is saving money, but citizens are being forced to deal with a private entity to get benefits they are eligible for.