Hate your bank? Use a credit union

Photo by Ronn Ashore

I spent several years suffering with grotty customer service at Citibank, and then I was hit by a check fraud that spiraled into a kafka-esque nightmare. A house-mate snuck into my room, stole a check, forged my signature (poorly) and then cashed it for $1000. Einstein that he was, he'd had to write his driver's license and social security number on the back, which showed up when I got the photocopy back. Not wanting to tip him off, me and the other housemates contacted the police, who were very helpful and interested. Now all we needed was the location where the check was cashed, which didn't show up on the statement.

After 3 months of both me and the police constantly calling and visiting Citibank, they refused to provide us with any details. I was constantly fobbed off with bogus excuses, since the case was allegedly in the hands of their fraud department who must live on an island somewhere in the south Atlantic with no means of communicating with the outside world, since I was never able to get a phone number or address to contact them. I finally received a refund after blowing my top at the local branch, and then promptly closed my account, threw the house-mate's possessions out on the front lawn and sent a copy of the forged check to his parents.

I was reminded of that when I saw this article on someone being hit with a $888,888.88 bank charge, with no explanation or help from the bank staff. It sounds like exactly the same sort of organizational failure that stymied my efforts to get help. From what I can see, the big banks have spent the last decade trying to build automated systems and procedures so they can get rid of expensive staff. That mostly works for routine operations, but as soon as something unusual happens you need somebody with judgement and authority to make decisions.

So what's the answer? I moved my account to a credit union eight years ago and I've been incredibly happy with them ever since:

– The customer service has been fantastic. They have trained, motivated bank staff able and willing to sort out problems for me, both in the branch and on the phone.

– I pay zero ATM fees, even when I'm traveling, since I can use any other credit union's machine for free.

– They don't gouge me with any other fees either. The big banks make nearly 40% of their revenue from 'non-interest income', and the bigger they are, the more they rely on them. Even worse, the 20% of households who pay the majority of overdraft fees (ie the poorest) pay 80% of those, averaging around $1300 each annually.

– I also get a warm glow inside because my deposits are funding straight-forward loans to local people and businesses, not financial speculation or empire building by bank CEOs. I'd rather be helping George Bailey than Gordon Gekko.

My personal account is with Keypoint Credit Union, and my business one with Lockheed, and they've both been stellar. If you're sold on the idea, there's almost certainly one that you can join, either because of where you live or the industry you work in. If you're current with a large bank, you won't regret switching.

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