Taking Care Of Business... Not

How much lower can America’s banking system fall? Listen to this tale of woe from John Smith (the names are changed to protect the innocent). He’s a customer dealing with a bank he has been doing business with for 20 years. He has borrowed millions of dollars from his bank in the past, and always paid on time and in full, and has a respectable credit score of 795.

On June 24, Alice, his CFO, emails his personal banker a simple request: Could the bank increase the credit card limit of his employee, Jane Doe, from $500 to $1,000 by moving $500 from Smith’s card to Doe’s? Alice requests an email confirmation, which she receives from Mrs. Bank Officer, who says, “I will submit a request and let you know once it has been completed.”

On July 1, Alice sends this email: “Mrs. Officer, can you give me a call on this … ? We are not looking to increase the total credit line, only reallocate what we already have.”

She receives this reply: “Alice, I have been attempting to get Jane’s card limit increased to the $1,000, but they will not allow me to do it for her. Apparently, because the main card was opened so long ago, no guarantor was set up on the account. I have called the credit card area four separate times and spoken with different individuals hoping to find someone who would take care of it. In order to get the limit increased your boss, Mr. Smith, will need to call to complete the request.”

On July 7, Smith receives the following letter: “Dear Mr. Smith, We recently received your request to be added as the authorized officer to the above account. Please be aware that if added as the authorized officer, you will be jointly and severally liable for all charges made to the account. Please fill out the enclosed form and return.”

On the same day he receives another letter saying, “Unfortunately, we are unable to complete your request at this time because you are not listed as an Authorized Contact.”

Smith completes the “Owner/Authorized Officer Information Acknowledgement of Business” form and attaches a note saying Doe’s credit card has been in use since 2001, with no complaints or payment problems.

On Aug. 4, Smith calls to check on the application and is told he will have to fax the credit card department a copy of his company’s local business license and a copy of his signature. Mrs. Bank Officer tells him once that is done he needs to call again and specifically tell them that he needs to be set up as the guarantor and that he is the contact person for his business credit cards. On Aug. 5, CFO Alice sends the bank the information.

On Aug. 6, Smith calls to follow up and is told he must answer a few questions. The first one is, “What was your company’s last check listed on your bank statement?” Smith tells them he isn’t in his office and will have to call his CFO to find out. He later calls with the information and is asked this question: “What is your current balance on your bank statement?”

He says he would have to drive back to his office to find out and asks why the answer to the first question wasn’t sufficient. “We change the questions each time you call. It’s policy,” he is told. The next morning, from his office, he and his CFO call the bank and answer the questions.

On Aug. 18, Smith receives the following: “Dear Mr. Smith, in order to process your request for your credit card account please provide the following information: Your complete home address (Federal law requires that we collect and verify your home street address). Any of the following documents in your name would be acceptable: a utility bill or a monthly bank statement issued in the past 30 days, or an IRS document dated within the last two years. It is important that you provide this information within 30 days of the date of this letter (Aug. 9, 2008) otherwise, we will be unable to consider your request further.”

Smith faxes a copy of his mortgage invoice and waits for the application to be approved.

On Sept. 9, Smith was still waiting. He has not heard back from his bank. It’s been two and a half months, and he still has no answer to his fairly simple request.

There is an old maxim: “If you take care of the small things, bigger problems will take care of themselves.” In this case it might seem the small problem comes from a small bank; but this is one our nation’s largest.

Certainly banks need to protect themselves during this difficult time and be careful about credit, but treating longtime customers like deadbeats isn’t the answer.

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