Master Your Card

How important are disclosures? Do you even read yours? I’m about to go a little off topic here because I’m slightly annoyed after today, so here goes. I’m talking about bank disclosures as they pertain to their accounts.

I went into a bank today because they were advertising a 5 month CD special at 4%. One of the better rates around and I’ve done business with this bank before, so I’m pretty familiar with their people. The first thing they tell me is that the special does not offer an add-on like most of their CDs do. Basically, as long as I add at least $500, their other CDs allow me to add existing money to my already open CD.

Strike # 1 – Their disclosures said that all add-ons would be allowed as long as they were in the amount of $500 or more.

When I questioned this they told me they had not had a chance to update their literature and it was something they were working on with their systems’ administrator.

Ok, so I moved on to the next question I had which was about penalties. I don’t anticipate needing the funds, but in the event that I do, I wanted to be sure my principal balance was safe. So, I asked what the penalty was and the representative told me that it was 90 days worth of interest; however, if that 90 days hadn’t accrued, then it would take the interest that had accrued, but not touch the principal. We opened the CD.

At the end as I’m reading the disclosures, there’s no mention of the bank not touching the principal, it just stated that the bank could impose a fee. When I questioned this, the representative pulled out one of their other disclosures that are given with new accounts and we flipped to the page that discussed early withdrawal penalties.

Strike # 2 – The disclosure specifically states that if the 90 days worth of interest hadn’t accrued it would be taken from the principal balance and was even complete with an example.

The representative was just as confused as I was. She called her supervisor over and asked about it. The supervisor was kind enough to say that she’d double check that and be right back. So she left to make a call. When she returned, she assured me that what I had been TOLD was correct. Forgive me, but when it comes to my money I want something in writing.

Strike # 3 – The supervisor hand wrote the information on the back of her business card, signed it, and handed it back to me.

Um, no thanks. I’d prefer you type it up on company letter head with an official explanation that your disclosures are incorrectly worded. Then you can sign the letter and attach your business card.

Everyone was very friendly about the transaction, but the thing that bothers me is that I actually read the disclosures and they were incorrect, according to what they were telling me. A handwritten note by the manager would have done me little good against the corporate sharks that are employed to be lawyers. They’d have taken one look at that and laughed. So, I was a little leery to leave my money at this bank.

Ultimately, I did leave the CD there because the employees were so accommodating to my concerns, but I have to wonder if they’ll take such a thing seriously. I know when I found mistakes in my credit union’s disclosures compared to what we were telling people, it was like an act of Congress to get them changed. No one else seemed as concerned as I was about the ordeal. Their rationale was that consumer’s rarely read it and we over disclosed on everything else. Well, I’m sorry, but that’s just not good enough.

Disclosures are to be accurate and complete, regardless of whether we over disclose or not. The point is to provide our members with information they can make an informed decision with, and as a basis of comparison with other financial institutions. If that information is incorrect, then that’s a violation of the truth in savings act – in this case, anyway. But, it’s also just bad business.

So, what would you have done in this situation? Would you have taken your money and gone somewhere else, been ok with a typed up letter, or would you simply have not noticed?