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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

#31

Post by TeMPOraL »

lotsofpulp wrote: post #12
loeg wrote: post #6

Relevant recent Levine article on this from last week: https://www.bloomberg.com/opinion/articles/2024-08-07/ai-com... > Cash sweep sweep > If you go to a bank and say “I’d like to open an account and deposit some cash,” they will happily open a checking account for you, take your cash, and pay you an interest rate that is, in round numbers, zero. [4] (My checking account pays 0.01%.) If you say “no, I want a savings…

> But if you utter the correct series of incantations, at least some banks will open a high-yield savings account and pay you 5% or more. You gotta find the right bank, though, and utter the right incantations. Sometimes it’s tricky Searching the internet for “list of highest interest bank accounts” with the device in your pocket is apparently a tricky incantation. Shopping an entire country’s investment options has…

As if interest rate was the only important variable when evaluating bank accounts. Banks have plenty of ways to make money on unaware customers - or rather, to make it expensive in time and effort to avoid losing money on things like transaction fees, account fees, card fees, etc., many of which are waived if you deposit and/or spend the right amount of money in the right order through the right financial instrument in the right cadence.

(Not to mention, every bank has a godawful shitty app, and there's some serious opportunity cost in learning how to cope with the new kinds of shittiness of your new bank.)

Re: Banks Are Now Accused of Cheating Customers Billions

#32

Post by jnordwick »

loeg wrote: post #6

Relevant recent Levine article on this from last week: https://www.bloomberg.com/opinion/articles/2024-08-07/ai-com... > Cash sweep sweep > If you go to a bank and say “I’d like to open an account and deposit some cash,” they will happily open a checking account for you, take your cash, and pay you an interest rate that is, in round numbers, zero. [4] (My checking account pays 0.01%.) If you say “no, I want a savings…

Levine is a national treasure. He's always so balanced, funny, and informative.

Re: Banks Are Now Accused of Cheating Customers Billions

#34

Post by lotsofpulp »

0cf8612b2e1e wrote: post #15
lotsofpulp wrote: post #12

Earlier quoted context omitted.

> But if you utter the correct series of incantations, at least some banks will open a high-yield savings account and pay you 5% or more. You gotta find the right bank, though, and utter the right incantations. Sometimes it’s tricky Searching the internet for “list of highest interest bank accounts” with the device in your pocket is apparently a tricky incantation. Shopping an entire country’s investment options has…

Just because it is possible to navigate through the dark patterns does not mean we should be comfortable with the situation. I do not have the time nor expertise in every facet of my life to know if I am getting a raw deal.

So what do you want, the government to mandate every aspect of your life?

Obviously, the government should be offering constitutionally protected and inalienable electronic money accounts that pay the same interest the banks get paid.

But that is not in the cards right now, so spending a few minutes, or maybe an hour at most reading a couple websites about which bank pays the most is really not much to ask. It’s called shopping, and it’s how a market works. Markets don’t really work if market participants evaluating which sellers are offering better value.

Re: Banks Are Now Accused of Cheating Customers Billions

#35

Post by ezfe »

coldpie wrote: post #33
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.

Check out your local credit unions.

Local credit unions rarely are at the same level as HYSAs because they have physical infrastructure to maintain

Re: Banks Are Now Accused of Cheating Customers Billions

#36

Post by Ylpertnodi »

TeMPOraL wrote: post #31
lotsofpulp wrote: post #12

Earlier quoted context omitted.

> But if you utter the correct series of incantations, at least some banks will open a high-yield savings account and pay you 5% or more. You gotta find the right bank, though, and utter the right incantations. Sometimes it’s tricky Searching the internet for “list of highest interest bank accounts” with the device in your pocket is apparently a tricky incantation. Shopping an entire country’s investment options has…

As if interest rate was the only important variable when evaluating bank accounts. Banks have plenty of ways to make money on unaware customers - or rather, to make it expensive in time and effort to avoid losing money on things like transaction fees, account fees, card fees, etc., many of which are waived if you deposit and/or spend the right amount of money in the right order through the right financial instrument…

>Not to mention, every bank has a godawful shitty app,

Well, not my bank. In fact i stopped using a third party app to track my spends. I do appreciate i may have struck gold with this particular app/ bank - and should i wish to change bank i will insist on going thru any new app to give it a fair shot. If it's not up to the quality of what i already have...no dice. I'm not wasting my time/ money tapping away on crap.

Re: Banks Are Now Accused of Cheating Customers Billions

#37

Post by pc86 »

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…

Somewhat related story about banks just saying "fuck you deal with it."

I left a subscription and long story short I got charged an extra $119, which was the monthly fee at the time. I reached out to the business over and over again and eventually they just said they were not refunding it unless I came back as a recurring customer, which I wasn't interested in doing. I submitted a charge back, submitting all my supporting information that the charge was extraneous beyond what I had agreed to pay, and eventually after a few months the bank (Discover) agreed with me and claimed the chargeback was settled.

Fast forward nearly a year later and boom a $119 charge pops up on my card. Discover tells me that the retailer had appealed (a process I was never notified about and didn't get a chance to respond to), that they accepted the appeal and the decision was final.

The wrinkle in this is that at the time I was in the process of digging out of a high five figures in credit card debt and this card had a ~$25k balance month to month so they were getting about $600/mo in interest from me. I called a manager and said "I have been paying this off at the rate of $2-3k/mo and plan on continuing to do so if you reverse that charge, otherwise I'm transferring the balance to another card and the interest ends today."

For whatever reason they were totally willing to throw that money away over $119, so I transferred the balance and closed the account. It is totally believable to me that they would do more or less the same thing with stealing money from cash accounts, if not intentionally then at least negligently and not taking the time to properly investigate.

Re: Banks Are Now Accused of Cheating Customers Billions

#38

Post by lotsofpulp »

TeMPOraL wrote: post #31
lotsofpulp wrote: post #12

Earlier quoted context omitted.

> But if you utter the correct series of incantations, at least some banks will open a high-yield savings account and pay you 5% or more. You gotta find the right bank, though, and utter the right incantations. Sometimes it’s tricky Searching the internet for “list of highest interest bank accounts” with the device in your pocket is apparently a tricky incantation. Shopping an entire country’s investment options has…

As if interest rate was the only important variable when evaluating bank accounts. Banks have plenty of ways to make money on unaware customers - or rather, to make it expensive in time and effort to avoid losing money on things like transaction fees, account fees, card fees, etc., many of which are waived if you deposit and/or spend the right amount of money in the right order through the right financial instrument…

It basically is. If you search a list of top bank accounts on a number of websites (like doctorofcredit),you will see very quick and easy breakdowns of fees.

Pretty much all the popular online banks with high yield savings are fungible, they all offer free transfers and blah blah, there’s nothing to worry about.

Re: Banks Are Now Accused of Cheating Customers Billions

#39

Post by CoffeeOnWrite »

loeg wrote: post #8
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.

It's hard to beat a decent money market fund.

But you want a MMF that is the sweep. Like Vanguard, but not Schwab.

Re: Banks Are Now Accused of Cheating Customers Billions

#40

Post by loeg »

CoffeeOnWrite wrote: post #39
loeg wrote: post #8

Earlier quoted context omitted.

It's hard to beat a decent money market fund.

But you want a MMF that is the sweep. Like Vanguard, but not Schwab.

Sure, there are some benefits to that. I happen to use Vanguard for this (VMFXX sweep).
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