Tuesday, February 17, 2009

Chase Bank makes stupid offers, and loses money by failing to live up to them

I recently wrote about how Chase Bank's inflexible systems just cost it money by not allowing me to make a $100 payment to my mortgage account to make up an erroneous underpayment. Instead, I had to make an entire additional payment, depriving them of a significant amount of future interest.

In January, I received an offer from Chase Bank to open a checking account with them, with a minimum deposit of $100. After I set up direct deposit, within ten business days of the first deposit they would deposit $125, which would be mine to keep so long as I left the account open and receiving direct deposits for at least six months.

I asked an online banker whether there was any minimum amount that had to be direct deposited, and was told no. I decided to set up the account in person at a branch near my office, and again asked whether there was any minimum direct deposit. The banker told me no, there was no minimum--if I wanted to deposit only $1 per paycheck, that would be fine.

As I have no interest in using Chase Bank as my primary bank--I'm quite happy with a regional bank that is one of the top-rated places to work in the country and has demonstrated reliability to me repeatedly over several decades--I decided to maximize my return on this otherwise non-interest-earning account by minimizing my deposits. My employer provides a convenient way for me to control my own direct deposits into up to three different banks, so I added a new direct deposit of $0.01 per paycheck into my new Chase Bank account.

The first $0.01 went in on January 15. On January 30, no $125 had been deposited, so I sent an online email inquiry asking when I could expect to see it. A response a couple days later told me I needed to call in to get an answer to my question, so I dialed the toll-free number, waited on hold, and finally got to a person who told me I needed to wait four to six weeks after the first direct deposit.

My second $0.01 went in on January 30. My third $0.01 went in on February 13. Still no $125.

Today, I got another $125 offer from Chase Bank, which prompted me to dig up my application materials and see that they promised my $125 would be deposited within ten business days, not four to six weeks. So I called and left a message for the banker at my branch, I sent another online inquiry asking whether Chase Bank is going to remedy its failure to honor its offer, and called in to the toll-free number again. I described the issue to my "telephone banker," and he asked for my account information. When he brought up my account, he asked if the $0.01 deposits were pre-authorizations for direct deposit, and I told him no, those are the deposits--I was told multiple times that there was no minimum deposit, and there is nothing in the written offer that mentions a minimum deposit. He was unable to solve the problem, and said he would have to send it to be researched, and I would hear back within a couple of days.

If they didn't want to honor the offer, they shouldn't have made it in the first place. By failing to live up to it, they're costing themselves even more money. It's surprising to me that this is probably the strongest of the major banks in the U.S., and the least likely of the majors to end up costing the U.S. Treasury money in the long run from the TARP's preferred investments ($25 billion put into Chase so far).

UPDATE (February 18, 2009): I received a voice mail from Chase Bank stating that the promised $125 will be deposited into my account within the next two weeks. My real-life banker left me a voice mail saying that the issue was that their system doesn't automatically count direct deposits for issuing an award if they are less than $1. So they do intend to honor their offer, it will just take longer since I used the system in a way they apparently didn't anticipate (or did anticipate with the same reasoning companies use with rebates).

UPDATE (February 25, 2009): My $125 was deposited yesterday.

4 comments:

Einzige said...

Yay!

The fuckers.

Alessandro Machi said...

People are protesting.

CONSUMERS to lose 100 MILLION to 1 BILLION DOLLARS A MONTH BECAUSE OF CHASE BANK'S RAISE IN THE MONTHLY MINIMUM PAYMENT ON LOW INTEREST CREDIT CARDS.

Daily-PROTEST.com

BLOGGERS AGAINST CHASE BANK.com

ChangeinTerms.com

CREDIT CARD COMPANIES ME FIRST AGENDA IS CAUSING SOME STATES SERIOUS FINANCIAL LOSSES.

OVER ONE THOUSANDS LETTERS OF FEAR AND LOATHING AGAINST CHASE BANK IN LESS THAN 3 MONTHS AT CONSUMER AFFAIRS DOT ORG.

Chase BANK SUED FOR FREEZING HOME EQUITY LINES.

Jamie Dimon's Competence Called into Question by John Kay.

It has been said of CE of JPMorgan Chase, Jamie Dimon (who does not have a banking qualification), that his dominance exists because at every meeting all the participants know that he could do each of their jobs better than they could. But the business world cannot operate at all if it can operate only with individuals of the calibre of Dimon. --John Kay

swalston said...

I have banking with WAMU for over 6 years and ever since Chase bought out WAMU I have had nothing but trouble. In Feb. 2009 they raised my credit card APR from 12% to 28% (and gave a lame excuse when I questioned it) there solution was if I don't like it pay it off and close the account. As of two days ago, THEY closed my account. I have never been late on a payment and always paid more than my minimum. I hope Karma comes around ant bites Chase in the a** for the disrespect they show their long time customers. I am taking my banking needs elsewhere (I also have two checking and a savings acoont). Bye-Bye Chase. Keep "Chasing" your customers away.

Antonio J. Romero III said...

You had said, "If they didn't want to honor the offer, they shouldn't have made it in the first place. By failing to live up to it, they're costing themselves even more money."

First of all, if you never intended to use Chase as a primary bank, and if Chase realized you were gaming the system, for Chase bank to do anything but not to reward your behavior would lose them money.

On the other hand, if you were talking about Chase's dishonesty losing business, I'm certain that Chase will surely lose substantial profits that all those monthly $.01 direct deposits they would miss out on. Though as far as those individuals will direct deposits greater than $.01, which arguably would be the vast majority of their prospective business, this incident will hardly be noticed.

Anyway, I honestly cannot decide which is more, as you put it, "stupid," the deals that Chase is making or the expectation that Chase eagerly honors those offers for a $.01 per month direct deposit.

No offense is intended, but we must be rational thinking individuals.