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Bank Breaking The Law With Bad Service

Posted on 4th February 2019

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This weekend Sheryl had some trouble with her US bank: BMO Harris Bank. She was furious, and very disappointed.

She had everything set up to operate smoothly. Her bank was able to automatically fetch her two US credit card bills, and to make the minimum payments. This had been working smoothly for a few years. Then suddenly, the bank were unable to fetch the bills, so she logged on to the BMO Harris Bank banking web-portal to make the payments manually.

Upon logging in, she was presented with an information pop-up, with new Terms and Conditions, with an "I agree" button. The new Ts & Cs basically say that customers must now have an address in the USA; without this address, virtually all the services which she needs are not available, including paying her credit card bills, whether manually or automatically.

She phoned customer services, and after several failed calls and ages on hold, the agent told her that she needed a US address. Sheryl therefore changed her address to her parents' address. The changes didn't take effect immediately, despite the agent's assurances that they would, so she still doesn't know whether she will be able to make the payments or not.

There are many things wrong with what happened:

  • If there is a contract (in this case, between the bank and a customer), if one party to the contract unilaterally changes the Terms and Conditions, the other party must be informed at the time the change takes effect, if not before. Informing the customer the next time they log-in is not compliant with the law.
  • What were the bank thinking, taking away service from a bunch of customers just because they have non-US addresses? There is likely to be a significant number of customers, and these customers probably have higher than average net worth and income. It just seems to be bad business. I suspect that the root cause is recent US legislation to prevent money laundering.
  • The customer service was so diabolically bad. The phone system doesn't work properly, the agents are overloaded and have a bad attitude, the "facts" they give out are simply not true and the promises they make are not fulfilled.

This is not the first time that Sheryl has had trouble with this bank. When she first moved in with me, it took almost a year to get her new address correctly stored on their system. She wrote letters and sent faxes (yes, it was a while ago, before Harris Bank had online banking). Amazingly, despite seriously incorrect addresses, her bank statements arrived at our flat, until the bank finally had the address right, at which point the German Post Office decided the letter was undeliverable (despite a correct address).

Normally, after such bad service, Sheryl would have closed her BMO Harris Bank account, and opened an account with another bank, but in most cases you cannot open a bank account unless you are resident in the country where the bank operates. She needs a US bank, to pay her US bills, but she lives in Germany.

It wouldn't be so difficult if the USA complied with anyone else's standards, for anything at all, but they don't: not in telecoms (only in the last few years have US customers had 3G and 4G phones - before that, Sheryl couldn't even send her family an SMS!), banking ("what is an IBAN number?"), airport rules (no international zones in US airports, so you have to enter the USA even if you are only in transit), road signs (would it really be so hard to use pictures on road signs, rather than words for everything - driving in the USA if you don't read English is a nightmare), and so on.

I am sure that we will find a solution. When we do, BMO Harris Bank will be getting a long letter detailing why her account has been closed.