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 THE CONSUMERS UNION PERSPECTIVE
Here, a monthly perspective from Consumers Union on the latest challenges—and possible solutions—facing U.S. consumers today. See archived letters.



Good luck complaining about your bank

Alan and Elizabeth Green
FINE PRINT  Alan and Elizabeth Green were surprised by high interest on a credit-card fee.
Photograph by Jamie Rector
Elizabeth and Alan Green of San Diego thought the 2.99 percent interest rate on a new credit card sounded great, so they transferred the balance from an older credit card. They knew they'd have to pay a balance-transfer fee of 3 percent. But they didn't know that the fee would be treated as a purchase and charged an interest rate of 16.74 percent.

Alan Green sought help. The Office of the Comptroller of the Currency, which oversees national banks, acknowledged his complaint promptly. But it was four months before the Greens got a letter from the agency stating, "It appears the issues have been appropriately addressed."

The OCC hadn't done much for the Greens. It checked with their bank and then repeated what the couple had discovered: that the fine print in the contract noted the higher interest rate. The OCC also said that it couldn't intercede in a dispute over a contract with a bank and that current regulations gave consumers sufficient information to make informed credit decisions.

Alan Green, a mortgage officer with an M.B.A., disagrees. "They got me by the fine print," he says. "If they got me, how about so many other people?"

Consumers Union questions the effectiveness of an agency that dismisses a consumer's problem just because it involves a contract. People won't waste time alerting regulatory agencies to flaws in the marketplace if they risk getting no more than a letter saying, in effect, "We won't help you."


Where to turn?

Five federal agencies monitor banks and field complaints. The OCC has started to simplify the system with its new Web site, at www.helpwithmybank.gov, but consumers must still determine which agency oversees their bank.

Consumers Union has testified in Congress that changes in the system should include one-stop filing and allowing people to complain by phone, fax, mail, or online. To further improve the process, federal banking agenciesshould do the following:

  • Require banks to tell consumers how to complain to federal agencies.

  • Create complaint forms that are easy for people to understand.

  • Take action beyond referring the complaint back to the bank.

  • Include a simple way for people to inform regulators about problems without filing a formal complaint.

  • Periodically disclose the percentage of consumers whose problems were resolved.

Even a good system won't solve the worst consumer banking problems. Regulators should work to address long check holds, high overdraft fees, and misleading credit-card practices. And they should support, not fight, stronger state laws that protect consumers.

To complain about a bank, go to the OCC's Web site or www.ConsumersUnion.org/money.html.