Watch out JPMorganChase - Customers have been complaining loud and long about WaMu’s banking practices.
Google “WaMu Sucks” and you’ll find pages and pages of search results – all of them obviously angry, and perhaps less obvious, not confined to the subprime mortgage business that finally tanked the company this week.
Despite its ad campaign poking fun at bankers, WaMu has long been accused of pulling the same stunts they spoof in the commercials: misleading offers, disconnected systems making service spotty at best, nickel and diming on checking accounts, and more!
In an attempt to distance itself from toxic mortgages, WaMu turned to traditional retail banking for profitability in the second quarter. As The Seattle Times reported in July, WaMu “opened 250,000 new checking accounts in the second quarter. Fees paid by depositors — for overdrafts, ATM withdrawals and the like — totaled $767 million, up 8.9 percent from the first quarter and 6.5 percent over the past year.” All those “free” checking accounts historically generated a lot of fees for the bank. And customers noticed.
In principle (pun intended) there’s nothing wrong with fee for service banking. The problem in WaMu’s case is twofold: the poor service that historically went along with free checking and putting the bank’s systems to work generating even more fees.
As far back as 2006, there are plenty of examples of WaMu’s poor retail banking service and inadequate systems. In this post from OnTheBrightSide.net, a retail bank customer recounts her experience trying to pay for merchandise with her WaMu debit card. Right, her debit card which should work just like a checking account only better. But not at WaMu.
Beyond exasperating, WaMu systems and policies suggest a systematic approach to racking up late fees for the bank. ConsumerAffairs.com has a seemingly endless collection of complaints about WaMu's retail banking practices (there’s a separate URL for complaints about WaMu’s mortgage-related practices). One customer who had to evacuate due to Hurricane Ike accuses WaMu of “purposely manipulating system times, forcing systems to apply cut off times without proper notification, giving a false sense of security when it comes to transfers, and purposely trying to find ways to cause customers overdraft fees.” Others complain that “Washington Mutual does not give me access to the available credit for 5-10 business days! They've got my money but won't let me use it!”
The retail bank was supposedly the bright spot in WaMu’s portfolio - the only part worth saving. I wonder if anyone at JPMorganChase knows the true state of what they just bought: the bank’s retail customer relationships are at risk, its retail systems are clearly not working, and its retail employees don’t know what service means. WaMu does not look like a bargain at almost any price.