Trust Is A Two-Way Street

If he wasn’t the first to coin the term trust-based marketing, then Glen Urban of MIT was certainly one of the first to write about it and help marketers understand the importance of trust in a customer relationship.

Today, financial firms are embracing this concept — it seems like just about every FI exhorts consumers to “trust us.” Unfortunately, their actions don’t always live up to their words.

And unfortunately, many firms fail to recognize that trust is a two-way street.

The following is a recent post from a fellow WordPress blogger:

Earlier this month, I spoke with a bank rep about a $592 fraudulent charge that had been posted to my checking acct. I filed a dispute against the merchant and was told it would take approx. 5 business days for the matter to be resolved. In the meantime, I was concerned I would incur insufficient fund fees.

The rep informed me I would be able to file a “separate” dispute once this dispute cleared. Essentially, rack up fees, then we’ll credit your acct? Pretty wacked.

Two days later, there was a credit to my acct. for $592. Yeah – problem resolved – or so I thought. I incurred over $300 in insufficient funds fees – Yikes!

As instructed by the rep, I called to file an additional dispute to recover the insufficient funds fees.The rep I filed the original claim with failed to record it on my acct. So they claimed to have no record of a dispute. On top of that, I was informed the (evil) merchant “credited” my acct. for the unauthorized charge.

Since the merchant “credited” my acct, it was no longer considered a fraudulent charge & there was no need for a dispute. What the @%&$?

I got passed off to a manager who informed me the bank wasn’t responsible for the insufficient funds fees because there wasn’t a record of a dispute. So now you’re telling me it’s my fault that your people are incompetent?!


My take: Clearly, a number of things went wrong here. But what strikes me as the most egregious sin, however, is the lack of trust — of the bank in its customer.

Granted, there’s a lot of fraudulent activity going on out there. But this bank basically didn’t believe its customer when she said she had called to file the claim. In effect, it called her liar.

So here we have a bank, who, if it’s like many of the others out there, is telling customers and prospects in its ads and marketing messages to “trust us.” And what does it do? Turns around and mistrusts its own customers.

A simple review of this woman’s account would likely have provided clues as to whether or not she was trying to commit some fraud. But it should never have even come to that.

The bank — without batting an eyelash — should have apologized and told her it was sorry and that it would credit her account for the fees. And then look into the legitimacy of the situation. We’re talking $300 here.

What’s sad about this situation is that if this customer is a professional or small business owner, she’ll be likely to get cross-sell offers from the bank to open investment accounts or a small business account. And what do you think are the chances that she’ll respond to these offers? I wouldn’t bet on it.

There are two things about this story that make me shake my head. Apparently, there are still a lot of banks that just don’t get that:

  1. They have to identify and act on the moments of truth that occur, and
  2. To get trust, you have to give trust.

This was a moment of truth. The bank didn’t identify it, and (in this case) couldn’t rectify it. The result: Maybe not a lost customer, but probably a customer who’s unlikely to grow her relationship. And definitely a loss of trust.

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15 thoughts on “Trust Is A Two-Way Street

  1. Under what terms does a $592 charge generate $300 in fees? And in three days??? Did she have 4-5 trasactions rejected during that period? Even then, $300 seems outrageous.

    Her bank took every opportunity to reinforce negative bank stereotypes: fees, rules, greed, insensitivity and indifference.

    Did she threaten them? Did she tell the bank to cancel that fee or close her account?

    I wonder what her local credit union would have done in this situation?

  2. @JP: Good questions. She probably had an NSF fee and a returned check fee in there, and who knows what else. Did she threaten them? Who knows. And why should she have to. Here’s the point: It’s not like there are customers walking around, looking for reasons to leave. She might have a perfectly content customer up to that point. Hell, she might even have been a … what does Wymore call them.. oh yeah, a Promoter. (Is she one of them today? Not a chance). The blogger was probably too stunned by the treatment she got to think to threaten them.

    What would a CU do? For better or worse, I bet the answer is “it depends”. Depends on which branch manager or rep she would have dealt with. Which is really what’s to blame at the bank in question.

    I wouldn’t be surprised if another manager at another branch would have handled the situation completely differently. Which is at the heart of the trust issue — it has to be institutionalized. It can’t simply be anecdotal.

  3. To answer your question: Yes, I incurred over $300 in insufficient funds fees do to the fraudulent charge of $592. There was approx. one week between the time the charge posted & cleared and then was “credited” back to my account.

    I followed all of WaMu’s recommended steps to resolve this matter and was rewarded in three ways:
    1) I was informed there was no dispute on file, therefore the allegation was no longer valid
    2) No dispute means I’m responsible for the $300
    3) It’s up to me to recover the $300 from the merchant, since they are the ones who made the “mistake”

    Essentially, I’m paying for the incompetency of WaMu because their customer service representative failed to record my dispute. Guess what WaMu, I have a phone bill to prove I was on the phone with your company for nearly 30 minutes. Here’s the real kicker. The manager I spoke with was extremely unprofessional. I asked him,” When and where is the consumer protected?” His respsonse was: “Mame, if this is the only thing you want to discuss, there’s nothing more I can say, I’m tired of repeating myself.”

    So the merchant can freely take my money (without authorization), the bank lets them and on top of that, the bank decides they want a piece too – so they add ridiculous fees to my account.

    I’m appalled. This is far from being resolved and I won’t stop until I recover those fees.

  4. Sheesh. No doubt Washington Mutual could lose a lot more than $300 from the brand damage.

    How do you institutionalize “trust” other than by hiring the right people in the first place? Or firing the wrong people when you hear about blunders like this?

  5. @Trey:

    Two things:

    1) WaMu is probably not going to lose anything in brand damage, because KW’s story isn’t going to reach that many people, and because, for better or worse, stories like this don’t impact us until we experience it ourselves.

    2) You “institutionalize” this by explicitly stating, through policies, that when a customer who has had a checking account in good standing for X number of months (or years) says that s/he filed the claim, the following steps should be taken: 1) Remove fees from account, 2) Initiate an investigation process.

    Memo to all employees: Step 1 comes BEFORE step 2.

  6. @Kristin: Thanks for commenting. I think that there are some people who read this blog who can point you in the direction of some really good credit unions in Portland, OR where this would never happen.

  7. Ron, It could be that this story might come back to haunt WaMu. Has anyone read the book “Citizen Marketers” by McConnell and Huba? They talk about the power of one. KW’s story is now on this blog, Ron. Other bloggers may just pick it up and then, if I were WaMu, I’d be worried.

    Can this happen at a credit union? You’re right, it depends. I think that’s where an active board comes in. A CU board is supposed to monitor poor management and make sure policies are put in place so that the rights of the member come first. I know we’re taking a chance at UFirst with the Boardcast but I’m assuming if KW were our member she might decide to get in touch with the board through the Boardcast.

  8. I hope it does come back. I had the same experience with them, and posted about it a year ago. Actually, I didn’t state the garbage WaMu did (very similar), but talked about how I moved to a different bank because it was much better–and a community bank.

    KW put this post on my site as well (pdxpipeline). I don’t know how much traffic she gets, but we get a good bit. We also get indexed for google rather well. So, when I do a bit more SEO on the post and follow ups throughout her situation; they might likely see this stuff when people google them.

    Let’s hope so–they really hurt me and they have really hurt her (and others from what I’ve been sent).


  9. Julian and Ginny — Thanks for the comments. You folks may very well be right, and that, ultimately, the bank in question WILL get their due.

    It just seems to me that, to date, these incidents haven’t had much impact on any particular bank’s reputation. Despite the fact that it seems so common, and not just among the large banks.

  10. The entire “trust” discussion is a huge pet peeve of mine with banks and CUs. Loan applications still request “personal references” that can be contacted if the loan goes bad – an immediate assumption. Proof of income – “you’re lying to me about how much you make”. I could go on and on about all of the different processes that immediately portray distrust. Institutions have entire departments (called collections/loss prevention/whatever) just to deal with the bottom 1% of their customers/members. Where’s the department dedicated to the top clients (the ones that actually produce a positive return, etc.)?

    Ginny – I hear your point about the BOD overseeing but, by the time they’re involved, the damage is done. In Kristin’s case, the damage was done immediately by “assuming” that she was lying. It was then compounded by hammering her with $300 in fees. What if she was a CU member that was in HR at a major SEG – think the damage would be more than $300????

  11. Mike — You make a great point. The onus is on the borrower to verify the claims. If I go to the bank where my checking account is (and hence, my direct deposit), there’s no reason for them to ask me what I make. They already know.

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