One-Fifth Of Consumers Considered Switching Banks In The Past Year


More Americans who were frustrated with their banks considered switching to a more affordable institution.

Jul 24, 2012

By: Daryl Tolliver

Many Americans are becoming more dismayed with financial institutions that increasingly rely on service fee income yet fail to provide good customer service. In the past, some consumers were content to simply stay with their bank regardless of negative experiences. However, times have changed, and as more smaller financial institutions offer competitive programs, rewards checking and affordable products, more Americans are considering switching to a new bank or credit union.

Nearly one in five consumers with checking accounts said they considered switching to a new bank during the past year, according to a new survey conducted by the Consumer Reports National Research Center. The results show that 43 percent of those who planned to switch were frustrated with fee increases for routine services, while 38 percent said another institution was offering better terms. In addition, 26 percent cited poor customer service as their reason for wanting to switch.

Nearly all respondents said the most prominent factors that deterred them from moving to a more consumer-friendly institution were the difficulties and obstacles many banks put in place when it came to transferring over their accounts.

"Unfair bank practices and rising fees are prompting more and more consumers to consider voting with their feet and taking their money to another bank or credit union," said Suzanne Martindale, staff attorney for Consumers Union. "But many consumers don't follow through because moving your money takes a lot of time and money and some bank policies make it harder than it should be. We need to make it easier for consumers to switch banks so they have a real choice when it comes to where to keep their money."

A separate report released by Consumers Union in May revealed the high cost Americans sometimes face to switch to more affordable financial institutions. Large banks, such as HSBC, US Bank, BB&T and Citibank, were all cited for imposing charges to close accounts or transfer money to a new institution. Some fees may range as high as $35 to electronically transfer funds to a new financial institution. In addition, Chase and Bank of America were also named the banks most likely to reopen closed accounts, which can result in penalty fees or monthly maintenance charges.




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