When talking with Chase, be precise, and ask several times

Here is a great story that outlines exactly the tendency of Chase’s customer service to give incomplete or simply bad information.

How Chase Bank Almost Helped a Teenager Get Scammed

by Jeff Sovern

A teenager I know responded to a listing for a summer job on Craig’s List.  The employer claimed he was opening an art gallery and would pay $400 a week for twelve hours of work running errands and the like.  Because he was out of the country, he was unable to meet her, but emailed her a list of questions.  Upon receiving her answers, he hired her.  She was thrilled.

Shortly afterwards, he overnighted her two money orders totaling $1,700. He instructed her to deposit them and take $200 for half of her first week’s salary; she was to wire the remaining $1,500 to an artist that day.  When she mentioned this to me, I became concerned.  What if she wired the money and the money orders later came back dishonored?  And why hadn’t he wired the money himself rather than trusting a teenager he had never met?

So she called her bank–JPMorgan Chase–to find out how long it would take before the money orders cleared.  The answer she received was one day.  That didn’t sound right to me, so I got on the phone.  I explained my concern that this was a scam and that I didn’t want to know when she could draw on the funds, but rather when the funds would clear so that she was assured that the bank would not charge back her account when the money orders came back dishonored.  Once again, I was told one day.  I was still unconvinced, so we called again.  Again we were told one day.  I haven’t looked at check clearing for ages; had things changed so much in the interval?  I tried a third call to Chase, and this time the representative told me what I had expected to hear the first time: while Chase would make the funds available in one business day, it could take much longer than that to determine if the money order was legitimate and that if it were dishonored, Chase would charge back the account.  I instructed the teenager to text the employer that she would not wire the funds until the money orders had cleared, on the theory that if he’s legitimate, he will get in touch with her.  So far, she hasn’t heard back.  I don’t think she will.

The teenager is disappointed at the loss of her seeming summer job and simultaneously relieved at not having lost her savings.  But there’s a bigger issue here than just what happened to her.  Most teenagers–and probably most adults–would have stopped at the first phone call.  Many would have wired the money.  Maybe they could later persuade Chase that it should not charge their account back for the dishonored money order because of the information provided by its customer service agent, but more likely they wouldn’t be able to.  Chase was in a position to prevent this fraud–and it didn’t.

First of all, I am simply shocked that Chase would make any deposited funds available that quickly.  Their tendency has been to stretch out the hold period longer and longer where now it is often 7-10 days.  Second, the customer asked, how long until the check clears, not how long until funds are available.  When talking with Chase, you may find it valuable to ask questions in two or three different ways, and perhaps with at least two different people, just to make sure you get the same answer each time.

Now Chase lacking for credit card customers too

We all know how much Chase beat up even its good credit card customers in response to growing worries about the health of its credit card portfolio.  But what we didn’t know was just how many people went for the exits.  Looks like their treatment of customers has purged the ranks to the extent that, now that the health of their credit portfolio has improved somewhat, they have a serious problem with revenue growth, according to the Wall Street Journal.

But the question about whether their credit card portfolio has really improved is in question as evidenced by conflicting information in the Wall Street Journal story:

• They reduced their reserves for losses by $1.5 billion
• Their write offs went from 11.75% in the 2nd quarter to 10.2% in the 3rd quarter

But this is directly contradicted by the fact that the percentage of customers that were delinquent by at least 30 days went up from 4.96% t0 5.62%.

So it seems that Chase may be doubly screwed here, they still have a fairly sick portfolio and are not that attractive to existing good customers and new customers.  Oh yea, and there is our mounting evidence that they are losing retail banking customers.

What happens when interest rates rise?

It is a well known fact that banks like Chase are making bank (so to speak) right now because they can borrow money from the Federal Reserve at almost zero percent interest and lend that money for quite a bit higher, or use that money in their own proprietary trading operations.  Life is good, and profits are fat.  But when interest rates fall, what will Chase have to fall back on?  There are some doubts about whether their consumer banking unit (aka Chase Bank) will pass muster as a thriving business.

First, consider Chase’s slash-and-burn tactics with retail baking customers that by our analysis appear to be driving customers away.  But more important is the anecdotal evidence that their customer service just stinks, as evidenced by a customer that has only been with Chase a short while, meaning, a very important type of customer, the new and potential customer:

I’m going to start this post off in a very personal fashion, I do all of my banking with JPMorgan Chase Bank, aka Chase. I’ve been a customer for just a few months and the service is outstanding, well sort of. My business banker is a down to earth, reliable, honest person and knows the various programs in the Chase portfolio. Aside from him, the customer service at the Howard Beach, NY branch is horrific. I go to deposit my payroll check, and the teller gives me an attitude as does the manager (who mind you seems more concerned with Real Housewives of New York City than her 20+ customer in the branch). I work hard for my money, I work hard for my business, and no I don’t take things like Air Conditioning for granted, they apparently do. I’m tired of shitty customer service, whatever happened to the customer being right, or service with a half-ass smile. I guess that went out the window, when they started treating bank customers like flight passangers. Please stand in a straight line, with two forms of ID, your blood type, hair color and a sperm sample please, while we verify this is you and record your every move, so make sure you fill out the deposit slip correctly, because you CAN’t HAVE ANOTHER. Banks Suck, they really do. JPMorgan Chase can’t afford to lose even the smallest of business, because we all know they aren’t making any money anywhere else, and with interest rates the way they are, they need to start being nice or Santa is going to start thinking twice.

Chase branch manager puts $10M debit out of spite

This story is so incredible it is just believable.

A customer, who got into a argument with a Chase branch manager went over her head and apparently pissed her off, because a couple of days later he found a $10 million debit on his account.  It seems the branch manager was determined to make sure he wouldn’t have the benefit of his own money over the 4th of July weekend.

Chase to target affluent customers

As reported in this Wall Street Journal article, Chase hopes to target more affluent customers, those between the average Joe and the high net worth individuals targeted by its private client services group by naming a new head to its Retail and Affluent Investment Services group, which oversees 2,700 financial advisers in its 5,100 branches.

Chase is doing this because it realized that these types of customers, while around only 8% of all banking customers, represent 2/3 of all deposits and investments at retail banks.  I can only think that by specifically targeting these customers, Chase is admitting they don’t have their fair share of them right now.

That is all well and good, but the real kink in Chase’s strategy is its inability to get basic customer service working properly.  With all the nightmare stories of pure ineptitude and systems failures (or poor design of systems) reported by a wide variety of Chase customers, I an easily imagine a scenario where affluent customers are signed up but then quickly depart when the realize that their most basic banking needs are not well handled. It is no secret that wealthier individuals put more credence on good customer service and less on pricing.

On the bright side, Chase’s desire to court such customers might actually force them to improve operations (make less mistakes) across the board, although I doubt it would cause them to change the way the actually treat the average customer.

Good luck Chase.

Banking should be about relationships

As a small business owner, from time to time the business needs to borrow money. Because we have worked wit the same business focused bank for 5 years, and they know us well, and maintain our accounts in good standing with them, when it comes time to borrow money, it doesn’t take them too long to say yes.  This is called having a relationship with a bank.

Similarly, with my present bank, a smaller bank that prides itself on service, I know the people in the branch I bank at and have very little trouble getting things done.

Now compare those experiences with this one:

Chase gives me the straw that breaks the camel’s back.

Went into a branch this afternoon to cash a birthday check (yay HB to me)!

They say it exceeds my current balance (payday is today friday…) and they can’t cash it for an amount that exceeds my existing balance.

HURR.

WaMu didn’t do that to me (member since ’95, so i know this). His reasoning: “you could write a check to yourself, cash it for more than you have, then bounce it and we are out the money.”

Uhm dude. yeah. That can happen. But this is a birthday check from my mother. WTF Make the policy you can’t write checks to yourself…? Thanks for calling me a potential criminal TO MY FACE.

So I said never mind, took my check back, and walked over to FirstTech where I recently reopened a new account and she was nice, friendly, and cashed it without question. I left some money in the account for fun, but honestly: starting this week I’m moving all my accounts totally over to the CU. I’m so done with banks.

See the difference?  Chase could have easily looked at the customers history with the bank and seen that they are a good risk.  They could have run the check and verified that the account it was coming from had sufficient funds.  Instead, they simply played by a hard rule and relationship didn’t figure into the picture at all.

Even the new credit union the customer recently opened was willing to accommodate the customers request.  Chase isn’t a customer service organization, it is a fee generating machine.  That’s it.

What it’s like to work for Chase

I’ve often been critical of Chase employees as giving bad advice, not knowing what they are talking about, or otherwise inept behavior.  When I came upon this job search forum discussing Chase, I began to understand some of the reasons why Chase employees might be this way.

The overwhelming majority of comments on the JP Morgan Chase forum are negative.  Chase is accused by many people of running a sweatshop and for having high turnover.

Those two along could account for the majority of deficiencies in ability in professionalism Chase staff often exhibit.  If Chase refuses to hire enough staff, customers won’t get the help they need, staff is overworked and stressed, doesn’t last long, and there are frequently fresh faces who probably aren’t going to stick around long enough to get properly trained.

Don’t trust anyone over 30 is now don’t trust anyone who works for Chase

This one from a Criaglist post, soon to be gone, so I am reposting it here.

Here’s a good one:
I rent a room from a friend. We both have Chase accounts.
Last thursday I deposited my unemployment check. The following friday I give my roomie a rent check and told him it was good to go. He takes it to Chase and asks the teller if the funds were available. He was told yes so he deposits my rent check.
The fucking check bounced because Chase held my unemployment check for for five fucking days! In the meantime I get hit with an insufficient funds fee!
CHASE SUCKS!

It sure doesn’t seem like you can trust what Chase employees tell you, it so often turns out to be wrong.