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Banks Are Now Accused of Cheating Customers Billions

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Re: Banks Are Now Accused of Cheating Customers Billions

#21

Post by foobarian »

reaperducer wrote: post #13
Animats wrote: post #9

Earlier quoted context omitted.

Yes. Before brokerages were part of banks, cash in a brokerage account was usually stored in a money-market fund, with whatever interest money market funds were paying. Once merging with a bank, cash was swept into an in-house bank account. This didn't matter much when money market funds were paying near zero interest. But the zero interest rate era is over. Except for demand deposits in banks, which pay well below m…

My parents instilled in me a mild distrust of banks. It's for this reason that I get my statements mailed to me each month, and each month I reconcile what's on the paper with what's in my spreadsheet. Guess what? Every year I find a mistake in at least one bank statement. And it's always in the bank's favor. Sometimes it's a few cents, but once it was a few hundred dollars across multiple errors. When I've told peop…

So it seems that over multiple years and considerable hours spent on this chore, the payout was a few hundred dollars? Assuming it was corrected? That's not a great cost/benefit ratio.

Re: Banks Are Now Accused of Cheating Customers Billions

#22

Post by randycupertino »

deathanatos wrote: post #18
diggan wrote: post #2

Original article: https://www.ft.com/content/de751907-c870-4b8c-b86b-317483f76... ( https://archive.is/wxqsC )

… this website, "FrankNez", has recently been spamming subreddits Reddit recently too, some off-topic from what is being spammed. (Their user there: https://www.reddit.com/user/OfficialFrankNez/ , so you can see for yourself.) — e.g., an article "Kamala Harris Is Now Proposing Raising Crypto Tax To 28%" was cross posted to 13 subreddits and removed by moderators on at least 9 of them. It smells like it's just rehashi…

Thanks for pointing this out. I couldn't get past the paywall of the original article and so posted this one. Also thanks to the person who posted the archived ft link!

Re: Banks Are Now Accused of Cheating Customers Billions

#23

Post by welder »

mhb wrote: post #20
reaperducer wrote: post #13

Earlier quoted context omitted.

My parents instilled in me a mild distrust of banks. It's for this reason that I get my statements mailed to me each month, and each month I reconcile what's on the paper with what's in my spreadsheet. Guess what? Every year I find a mistake in at least one bank statement. And it's always in the bank's favor. Sometimes it's a few cents, but once it was a few hundred dollars across multiple errors. When I've told peop…

What kind of mistakes are these? I've been reconciling my bank statements for decades and if it doesn't balance, it's been my mistake.

He just uses a crap bank.

Re: Banks Are Now Accused of Cheating Customers Billions

#24

Post by mrmetanoia »

beaglesss wrote: post #19
reaperducer wrote: post #13

Earlier quoted context omitted.

My parents instilled in me a mild distrust of banks. It's for this reason that I get my statements mailed to me each month, and each month I reconcile what's on the paper with what's in my spreadsheet. Guess what? Every year I find a mistake in at least one bank statement. And it's always in the bank's favor. Sometimes it's a few cents, but once it was a few hundred dollars across multiple errors. When I've told peop…

Unless you hold a lot of money, you're at the mercy of someone actually caring to fix it, and if not an annoying and possibly expensive lawsuit It's not I trust the bank, its just the times they've stolen under $500 from me they've more or less said 'fuck you deal with it' and after that I can just work to make the cash back a lot easier than I can sue for it. So I just closed my accounts and did that. Fighting the b…

Yeah, it's a bit of a war of attrition.

Re: Banks Are Now Accused of Cheating Customers Billions

#25

Post by smallmancontrov »

welder wrote: post #23
mhb wrote: post #20

Earlier quoted context omitted.

What kind of mistakes are these? I've been reconciling my bank statements for decades and if it doesn't balance, it's been my mistake.

He just uses a crap bank.

Crap banks abound.

Re: Banks Are Now Accused of Cheating Customers Billions

#27

Post by ryandrake »

dmoy wrote: post #14
0cf8612b2e1e wrote: post #5

Who has the best interest rates for idle cash? I have been using Marcus, but it is not a huge burden to shop around.

For money markets, it's typically vanguard. Other brokers that are not bad for sweep include IBKR, Fidelity, Schwab, etc. But vanguard will always have higher interest on cash. Marcus is FDIC insured savings though, which has slightly different implications. There's websites that compare current highest savings rates (nerdwallet, bankrate, whatever). Going in the other direction, there are things like SGOV or Treasur…

You can also directly buy short term US treasury bills, which are paying roughly 5.25%, are auctioned weekly, have an extremely liquid secondary market, no fees, and essentially risk-free (backed by the US government).

Re: Banks Are Now Accused of Cheating Customers Billions

#28

Post by colechristensen »

shahzaibmushtaq wrote: post #7

Not only because of interest payments banks defrauding customers but also due of hidden charges.

A month ago I got a mystery deposit then a letter explaining why I’d been given hundreds of dollars back from my bank… I’m thinking they were trying to get ahead of this kind of investigation.

Re: Banks Are Now Accused of Cheating Customers Billions

#29

Post by ryandrake »

beaglesss wrote: post #19
reaperducer wrote: post #13

Earlier quoted context omitted.

My parents instilled in me a mild distrust of banks. It's for this reason that I get my statements mailed to me each month, and each month I reconcile what's on the paper with what's in my spreadsheet. Guess what? Every year I find a mistake in at least one bank statement. And it's always in the bank's favor. Sometimes it's a few cents, but once it was a few hundred dollars across multiple errors. When I've told peop…

Unless you hold a lot of money, you're at the mercy of someone actually caring to fix it, and if not an annoying and possibly expensive lawsuit It's not I trust the bank, its just the times they've stolen under $500 from me they've more or less said 'fuck you deal with it' and after that I can just work to make the cash back a lot easier than I can sue for it. So I just closed my accounts and did that. Fighting the b…

Most of the mistakes I see are things like restaurants charging more than what was on the bill, and if you paid with a credit card, these are usually very easy to dispute. From actual banks, I haven't seen any problems, and yes I check whether the interest and dividend payouts are correct--they always are.

The article here is about banks defaulting customers to low-yield sweep accounts, but it doesn't look like they are actually under-paying interest. The accounts just don't pay a lot of interest. Honestly, the customer should know how much interest their sweep account pays and move that money to higher interest accounts if that's important to them. Whenever I put cash in a brokerage that I'm not going to use for a while, I always take the time to move it from the cash sweep account to an interest-bearing account. Buyer beware!

Re: Banks Are Now Accused of Cheating Customers Billions

#30

Post by jnordwick »

dadbot wrote: post #10

Not sure if is the same, but I noticed that account interest rates that went down when the reserve rates went down didn't go back up. We opened up accounts for our kids at a local credit union that had close to 0% interest. Fast forward 2 years and the rates are just as bad or worse. Savings accounts are 0.25% compared to >4% at other credit unions.

It makes sense for interest rates to go down when the reserve rate is cut. That means there are more dollars to buy bonds with pushing up the price and lowering the yield (the inverse relationship between price and yield is a mathematical identity). Eurodollar rates are routinely lower than us dollar rates, and they don't have any reserve requirements.
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