I have been a Merrill Lynch customer for about 30 years now. I have stayed with them despite the fact that their fees for trading are far more than those charged by online brokers. I started out when such fees were the norm – you could save a bit through Schwab, but not that much. I rationalize staying with them despite the huge drop in commissions by saying that I don’t trade much, so the commissions really don’t matter that much, which is true.
The deeper truth is, however, I have loyalty to my broker. Leaving a broker is a bit like breaking up with a girlfriend. Sometimes you know it is the right thing to do, but you feel bad about telling them. It also would cause turmoil and upset your life for a while. It is simpler and more comfortable to stay where you are.
Bank of America, however, who bought out Merrill Lynch back in 2008, is making it very difficult to stay. I cancelled my Bank of America credit card about 8 years ago after I sent in a payment a few days late by mistake and was hit with a fee. They asked when I was leaving why I wanted to close an account that had been open for so long (I probably had the card for about 10 years by that point). I was wondering where their loyalty to me was.
Since that point I have sworn off all credit cards. I’ve always paid off the balances each month, using the cards just for convenience and rewards points, but I began to notice that the due dates were coming sooner and sooner. If I went away on vacation for a week and a half, I might not even get the bill before it was late.
I tried paying extra each month, hoping that if I paid the monthly minimum with the past month’s bill, that would insulate me from late fees. Apparently, however, they don’t count it as paid on time unless you send in the check after the closing period for the new month. They just deduct the additional amount and then require you pay another minimum amount before the due date. It soon became clear that they wanted me to miss the due date, be late, be hit with interest and penalties, and owe them lots of money. I decided I didn’t want to do business with people like that. I’m proud to say I have been credit card free for about 5 years now.
I am now, however, wondering about doing any sort of business with Bank of America (not that the other large banks are any better). It is like they really don’t want the business of most people. Last year, they tried to charge a debit card fee. Other banks quickly followed, but pulled out under public outrage. Now they are planning to up their checking fees unless you do additional business with the bank (read, get a loan with them).
They also were cited in a Wall Street Journal article as one of the banks that use death collectors – shadow companies that try to collect on the debts of those who have died. While this in itself is not really bad – certainly if someone owes a debt it should be repaid from their estate before the funds are dispersed to heirs. The trouble is, however, that some of the companies purposely call during the grieving period and try to get family members to pay the bills out of their pockets. (Note that if someone dies, no one but the person who died owes the money. If they have no estate, the debt cannot be collected). They would use ploys like saying that the person who died would have their reputation tarnished in an effort to get family members to pay it. This seems truly despicable.
I understand that their profits have been cut by the Dodd-Frank act. I also understand that companies try to make money, and they try to increase their profits each year. That is why stocks go up in price.
I don’t feel, however, that they need to increase their profits by nickel and dimeing their customers. Just as they have the right to charge whatever fees they want and treat their customers as they choose, I also have the right to go elsewhere with my business. And while I may not be charged the fees, I figure that if they are treating some of their customers like this, who’s to say how they may treat me in the future.
This is the beauty of Capitalism, provided there is sufficient competition. Those who do the best job of providing for the needs of others can make a lot of money. Likewise, those who treat their customers like they don’t want them, may lose those customers.
So, I’m seriously considering cutting my ties with Merrill Lynch, ties that run very deep. Will they miss me? Maybe, maybe not. My accounts aren’t that big yet. But they may be wondering what happened in a few years if enough follow my lead. Anyone from Bank of America listening out there?