E*Trade Bank Review (A Chronicle of Customer Service Misery)
Four months ago I began the process of opening both a Complete Savings and a Max-Rate Checking account at E*Trade Bank. I ignored the fact that E*Trade has had some financial problems in the past, because I was lured by the promise of high interest rates. Now the rates have been slashed and I have been slapped with a $15 "ACH Handling fee". I'm moving my accounts elsewhere.
Herein lies my tortured tale of woe in trying to get the accounts set up. My advice: don't bother; it is the classic bait and switch scheme with a added bonus -- poor customer service.
Four long months ago, I filled in a multiple page online application for both accounts. After I painstakingly entered in a prodigious amount of data on myself and my wife, I immediately received an email assuring me that my initial deposits would be transferred from my regular checking account the the new E*Trade accounts, in "2 or 3 days". It never happened.
A week later, I called to see what had happened. I didn't see any outgoing transfer at the regular bank account. The CSR had no record of my applications. He suggested I call back when the banking department was open. I didn't; I figured they were just backlogged.
Later that week, I received a phone call from someone claiming to be from E*Trade to verify my identity. I was asked several easy multiple choice questions like "which of the following addresses have you ever lived at?", and others. The questions were easy questions, until she started asking me about someone else entirely -- namely, "Michelle Turner."
I failed the verification because I was asked personal financial questions about someone I never heard of.
Immediately, I thought the worst-- that someone had compromised my identity. I peppered the rep with questions on which credit reporting agencies they got this information from so I could investigate. After 30 minutes on hold, I spoke to a supervisor who said it wasn't a big deal, and finally gave me the contact information for Equifax.
Further, the supervisor told me that I would have to email, fax, or mail a copy of my drivers license and identification. I complied, sending the required copies via first class mail.
Another week went by and I called the customer service number. The rep had no record of the bank accounts. He tried to transfer me to the "banking department" but it was closed. Another few days pass and I called again. The representative was able to pull up the information and said bluntly, the account was "on hold, but it looks like they received your documents."
A week later a get a box of checks with my name only. I called the customer service line and was told that the account was still "on hold." The representative couldn't answer why I received a box of checks for an account that wasn't even open yet. The CSR ordered a new set of checks printed with my wife's name on it as well as another set of ATM cards.
A few days later I received a box of checks and separately, ATM cards. My wife pointed out that her name is misspelled on the ATM card.
Another call to E*Trade Bank, and we find out that the account is opened. It has taken a full month to open the account. The Complete Savings account was never fully opened, and the interest rate has been cut. The account now pays 2.9% APY (It was 5.0 APY in January) which is less than my previous savings account.
To add insult to injury, I have been slapped with a $15 fee on the third statement cycle. Additionally, if I close the account within 120 days, there will be another $10 closure fee.
I am now finding many, many similar stories on the Internet about how incredibly bad E*Trade Bank's customer service is. I sincerely advise anyone interested in a high interest bank account to avoid E*Trade at all costs.
I have also noticed that E*Trade no longer has their phone number prominently displayed on the website. You have to drill down a couple of pages to find it now.
Given the large number of complaints online, I think that this is the classic bait and switch game:
- Advertise a ridiculously high APY to draw in customers.
- Next, drag the application process out a month, so you don't have to honor the original offer.
- Cut the interest rate.
- Surprise the customers with maintenance fees, and closure fees.
I think it is time some of these financial institutions failed. For far too long, we have allowed financial institutions to change the terms of agreements, add fees at will, apply universal default, and modify interest rates at will.
These are the very credit card companies and banks that Paulson wants to give $700 billion in tax money to. Personally, I would love to see Paulson publicly admonished and fired.
Labels: Personal Finance
