1 in 5 considered changing banks, but many were hindered, poll says
WASHINGTON -- About one in five consumers considered moving their checking account to another bank in the past year, largely because of increased fees, but more than half said they didn’t switch because of the hassle and complications, according to a poll released Tuesday by Consumers Union.
The findings show that the Consumer Financial Protection Bureau should make it easier for people to move their money by enacting changes, such as requiring banks to transfer all automatic payments and direct deposits to the customers’ new bank within two weeks, the group said.
“Unfair bank practices and rising fees are prompting more and more consumers to consider voting with their feet and taking their money to another bank or credit union,” said Suzanne Martindale, a staff attorney for Consumers Union, the publisher of Consumer Reports magazine.
“But many consumers don’t follow through because moving your money takes a lot of time and money and some bank policies make it harder than it should be,” she added. “We need to make it easier for consumers to switch banks so they have a real choice when it comes to where to keep their money.”
Bank of America’s announcement last fall that it would charge customers $5 a month to use their debit cards sparked outrage as the highest-profile example of rising fees at large banks. BofA abandoned the fee in the wake of the controversy, but many consumers began looking for less costly alternatives to major banks.
For example, the National Credit Union Administration reported this spring that more than 1.3 million people opened new credit union accounts in 2011, up from less than 600,000 the previous year.
The Consumers Union poll, conducted in May, found that 19% of 1,157 adult respondents had considered switching their checking account in the previous year. Of those customers, 43% said a top reason was fee increases for routine services, 38% said another bank was offering better terms, and 26% said they had poor customer service experiences.
The margin of error of the poll is plus or minus 3 percentage points.
But more than half of the respondents in the poll said they were hindered in moving their checking account to another bank by complications in the process.
Of those who did not switch, 63% said they were worried about the trouble of switching all their automatic payments and deposits, 37% said the process would take too much time and effort to complete, and 28% said they didn’t want to pay any fees to make the change.
Consumers Union made several recommendations to the bureau in May to make switching checking accounts easier.
In addition to requiring banks to bear responsibility for transferring automatic payments and deposits, Consumers Union said banks should make same-day electronic fund transfers at no cost to the customer, prohibit unfair fees for closing accounts, and consider mandating making account numbers portable between banks in the same way people can keep their mobile phone numbers when they change wireless providers.
The poll found consumers thought some of the changes would make them more likely to move their checking accounts.
Almost half of respondents -- 47% -- said that a free, same-day electronic transfer of their money to another bank would make them more likely to switch banks, 37% said a requirement that all automatic payments and deposits would make them more likely to switch, and 32% said a portable checking account number would make them more likely to move to another bank.
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