Bank of America–a Break From Milking Customers?


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I recently learned about an online and in-branch campaign by Bank of America called “A little knowledge is a powerful thing.” The idea is to education customers about banking and credit card fees.
Bruce Hammond, president of BofA’s card services says:
Our research shows that if we equip consumers with this account information, they become more empowered to manage their finances and more satisfied with their banking experience.
Can this be true? This is a bank that at the end of the day processes withdrawal not chronologically but largest to smallest. Why? It increases the chance an account being over drawn and creates an opportunity to charge fees.
I do hope the announcement is for real and results in a change through out the banks practices. I have multiple accounts with BofA and haven’t seen any evidence of it yet.
Here’s hoping.

John Todor
John I. Todor, Ph.D. is the Managing Partner of the MindShift Innovation, a firm that helps executives confront the volatility and complexity of the marketplace. We engage executives in a process that tackles two critical challenges: envisioning new possibilities for creating and delivering value to customers and, fostering employee engagement in the innovation and alignment of business practices to deliver on the new possibilities. Follow me on Twitter @johntodor


  1. I give credit to Bank of America for bringing attention to information that is readily available to every one of their customers. Even though we do not read the fine print, all fees are laid out at the beginning of the banking relationship. Consumers, unfortunately, are bombarded with the fine print and have become quite adept at just ignoring it. It’s easier to say that we didn’t know. Really…we choose not to know as we are drowning in the sea of information.

    The customers for which such education is aimed at are those for which fees might actually apply. In the banking environment, those are customers with limited resources. The bank is trying to help them to have more clarity around money management issues. If you float checks, you may get caught without the funds to cover them and then a fee will apply. No one wants to pay fees or pay for banking services but most deserve the fees that are applied. If you do not have the money in your checking account or have your balance at the credit limit on your card, you should be expecting a fee to hit you when you break the rules.

    As a BofA customer too, I know that checks that hit on the same day are ordered from largest to smallest but these checks are hitting on the same day and you should be expecting the money to be “gone” when you write the check. Is it fair to expect the bank to not assess fees? There is a cost to process returned checks and it should be passed on to those who cause this problem. I do not bounce checks but still have to subsidize the process which has to deal with those who do. We are all paying for such behavior in the cost of doing business with whatever company, not just banks. Have you ever looked at how many billions of dollars of debt the utility company writes off each year. We are paying for that in our utility rates.

    Even when I was living paycheck to paycheck, I did not spend what I did not have because I knew that I could not afford the penalty. I hope that education will help those who have money management challenges because we will all win in the end.

  2. Jodie,

    I don’t object to fees that are made clear to the customer. The problem I have is bank have become more and more likely to introduce fees that are not clearly understood by the customer. One could argue that if they are spelled out in the fine print and the customer doesn’t pay heed, the customer is at fault.

    However, the terminolory is not written in a straight forward manner. Most customers would need to hire an expert to figure out what it really means to them. The bank can rationalize the fees are justified but this is very short-sight thinking. Customer resent fees they don’t understand.

    If BofA is really going to help customers understand fees so they can manage their own affairs, I applaud it.

    Helping customers comes down to effective communication not obscuring the issue. When I think of effective communication I am reminded of what the playwright George Bernard Shaw said abour a century ago.

    “The problem with communication is the illusion that it took place.”

    If bank continue to believe in the illusion they will continue to be viewed as untrustworthy. It is clear that most banks fall into this category. However, as research from Gallup and the Carlson Marketing Group demonstrates, when a customer trusts a bank the amount of business they do increases and they actively advocate that bank.

    John I. Todor, Ph.D.
    Author of Addicted Customers: How to Get Them Hooked on Your Company

  3. John,

    I do think it is very laudable that Bank of America is attempting to educate customers about their fees. As the recent sub-prime debacle has highlighted, too many customers are ignorant of what they are signing up for when they sign up for services with a bank, particularly for products like credit cards.

    You say “This is a bank that at the end of the day processes withdrawal not chronologically but largest to smallest”. Of course, this is how almost every bank does it, not just Bank of America. The reason often cited by the banks is that they feel it is important to pay the big bills first. The true reason, of course, is that it increases the numbers of checks that bounce due to insufficient funds. NSF (not sufficient funds) fees are a significant revenue generator for banks. The easiest way to avoid these fees is to have an overdraft line linked to checking accounts, yet most banks do not push that service unless you ask for it. Most banks would rather have this revenue in the short term than customer satisfaction in the long term – if their actions are anything to go by.

    Naras V. Eechambadi, Ph.D.
    email: [email protected]

  4. Every business has contracts, even small businesses like mine. Often times the boilerblate in 5 point type is stuff the lawyers make you put in.

    But I think when you look at any business-customer relationship, its success hinges on just a few things. What the business will/won’t do. What the customer must do including any potential risks. Those thing should be spelled out clearly in the contract, and explained to the customer if necessary.

    An appopriate test for the selling organization, and indeed the individual sales rep, is not whether the customer signed the contract. But rather did the customer understand the key terms in it.

    If bank managers were rewarded on customers actually knowing what they signed up for, instead of burying the details, I’ll bet things would change in a hurry. But when there’s money at stake, the temptation is to gloss over things like: “If the housing market growth slows or interest rates rise, this (sub-prime) loan will put money in our pocket but you could lose your house.”

    A former sales rep in our organization used to tell me, when the customer complained about something, that the details were in the contract. My response: your job is to ensure the customer understands what he/she is buying, not just get the contract signed.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  5. This sounds like a public relations initiative or to satisfy some new government regulation. The large banks get large for a reason – they find ways to make money at their customers’ expense.

  6. Hi, this is a great way to make the customer feel more comfortable about their banking service as sometimes it happens that many customer are being ignorant about the service very easily come under the influence of some other bank marketing agent, So it is rather wise to make them aware of each and every facility of the bank provided to them and the fees structure so that they have clarity about the service provided by bank.

    Mutuo Prestito


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