Why Banks Get Away with Ripping People Off
All you have to do is google search on banks and you find the stories are numerous of ripping people off. Wells Fargo has to be the poster child for everything from fraud, to identity theft, to questionable sales tactics. In fact, they are about to be handed down a record fine for these practices.
How do they continually get away from it?
(1) Banking Convenience
Why do consumers stay with a bank that they can clearly not trust? I asked this question to branding expert Anne Thompson, author of Do Good, in a radio interview she said that it is top much of an ordeal to move a bank account from one bank to another. Think of the amount of work that would go into a bank move between automatic transactions and deposits. Plus, most people have picked their banks because of convenience. Thus, unless the questionable tactics did not effect them, then they probably will stay put. As a result, the banks don't lose their main commodity - bank deposits.
(2) Arbitration Clauses
This is probably the main reason. If a bank customer has a dispute with the bank, they have to settle it with arbitration. This is a no win situation for the consumer. First, arbitration proceedings are settled in private behind closed doors. Second, the consumer has to hire an attorney to fight an army of salaried bank attorneys. Third, the bank gets no bad press because it is done in private with non-disclosure statements in force on any settlement. The consumer cannot sue since he or she waived that right when they signed on the dotted line.
It is important to do business with those who you can trust. Just remember, It might be just a matter of time before you get a reason not to trust.