What’s In My Wallet? Hope.

Capital One Kitty
The Kitty called me back

I recently complained about my business bank’s proposed unilateral change in checking account terms because they moved from simple to complicated in their cost structure.

Not only that, but earlier this Spring I had written that they really rubbed my rash when I tried to close a line of credit with a 2 cent balance (!) and treated me to the full Skynet-Kafkaesque-Brazil-dehumanizing-bureaucracy[1] that probably extended my personal therapy sessions to deal with bank rage issues[2] for yet another year.

I’m surprised and delighted to report an update this week:

Capital One reached out to me to apologize for the confusion, answer my questions, ask my advice as a customer, and to listen.

This is huge.

A woman named Allie sent me an email, offering to track down the background to the specific information I reported in my post.

Next, on the following day, she set up a conference call with Rich, from the small business banking network, and Carrie, from small business development.

We all spoke for about twenty minutes.

Rather than be defensive about my pointed criticism, they thanked me for being blunt and said they wanted to improve.  Rather than try to justify the institutional changes they were making to business accounts, they said they wanted to use my feedback to serve customers better.

These three were good communicators, and good listeners.  When I got on my self-righteous soapbox about how mistrustful customers are of their banks – and with good reason – they encouraged me to offer suggestions.

“How can we do better?” they asked numerous times, in different ways.  This is a great start.

I’m as cynical as they come on the issue of bank customer service, so they took a risk in setting up a conference call with me.  I would have had no problem turning yet another unfortunate interaction into red meat for an angry anti-bank blog screed.

I have to admit, however, these folks did well.  Somebody at Capital One has figured out how to make the customer feel good.  So the challenge will be to take that approach and expand it to the rest of the bank.

Seth Grodin periodically writes about the profitable opportunity – in a horrible customer-service world – to distinguish your business through customer delight.

Here’s hoping Capital One gets there in time.

Please see related posts: Why you hate your bank

[1] We really need a short hand version of this idea in English, rather than an extended and unwieldy hyphenated reference to two movies, and an author.  This kind of idea lends itself to one big long German word, but I unfortunately don’t speak German.  Surely the Germans have a word for this already, no?  Would somebody please help me?

[2] Is ‘Bank Rage Issues’ in the Diagnostic and Statistical Manual of Mental Disorders yet?  Apparently the American Bankers Association has been lobbying hard for its inclusion.

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Another Reason You Hate Your Bank

whats-in-your-wallet Cat
Grumpy Cat. That’s what’s in my wallet.

Capital One Bank, my business bank since 2004,[1] called me yesterday.

“Great News!” chirped the person who introduced herself as my business account manager, but who I’ve never met, and who has had no previous conversation with me before, ever.

“Ok,” I replied flatly, immediately wary, because banks are not generally in the Great News business, in my experience.

“We’re in the process of switching all of our business customers over to new checking accounts by January 2014, and I thought I’d give you a call to tell you about the two great options you can choose from!”


“You have previously been in the Completely Free Checking account, but we’re transitioning all of our customers away from that account, and you can choose from either a Cash Back Account, or an Interest Checking Account!”

“Ok.  Tell me about the Cash Back Account.”

“Assuming you have a balance of at least $2,000, then for every transaction you make per month, whether a deposit or withdrawal or transfer, we’ll credit you with $0.10!”

“I don’t make many transactions per month, but it sounds nice, what’s the catch?”

“We limit the number of transactions in the Cash Bank Account to 100 per month.  If you go over that many, we charge $19.95!”

“Ok.  What about the other account?”

“With Interest Checking, if you keep an average balance of at least $10,000 we pay you interest, and you have an unlimited number of transactions.  If you have less than a $10,000 balance in the account, we charge $19.95!”

“What kind of interest?”

“Right now we pay 0.2%!”


“So which one would you like to choose?”

“Well, let me see if I’ve got my math straight here:  With the first type of account you give me ‘cash back’ but that is capped at a total of $10 maximum, but above 100 transactions I’m paying $19.95 per month.  So I earn an increasing amount up to $10 the more activity I have, but then suddenly I pay $20 just after I qualify for the $10 ‘Cash Back.’   And then with the second type of account, let’s say I keep my $10,000 balance in your account, you will pay me $20 per month on that size balance, but again you get the right to ding me basically that same $20 anytime I dip below $10,000.”

“That’s right!  Which one would you like to choose?”

“Well, really, neither.”

Then, the cross sell

The conversation went on from there, and involved her trying to get me to take out a business credit card with Capital One (I don’t need another business credit card) because that could eliminate my fees if I had at least one transaction per month on the card.

Of course I actually do have a business credit card with Capital One, but with a different business entity, but that doesn’t count, because that would involve logic and human decision-making and taking into account a customer’s actual business relationship, which as I’ve written before has absolutely no place in modern banking.

What’s my problem here?

So why did this phone call remind me of why banks suck?

It’s not precisely the dehumanization, the elimination of judgment, that I complained about before.

And I swear it’s not because they want to change me from completely free to charging fees.

Well, it’s partly that, but in a really specific way.

I don’t mind paying some fees, and I do believe banks should charge for their services, one way or another.

No, what really gives me diaper rash in this situation is Capital One’s introduction of an essentially hidden, complicated, and disingenuous pricing scheme.

“Cash Back Checking?”

It’s called “Cash Back Checking” but your number-of-transactions algorithm means I either get a fraction of $10, or I pay $19.95?  And the way you charge me month-to-month could toggle back and forth, just like phone plans with a limited number of minutes that suddenly fall over the cliff and get expensive when I go over the limit?

All that means is that I can’t predict what I’m paying for the service on a monthly basis.  Meanwhile Capital One has all the information for determining fees.  In case I want to inquire, I’m facing long waits in voicemail and call-center hell.

“Interest Checking”

Also, your “Interest Checking” is a joke as well.  $20 on a $10K balance, but with the right to charge $20 when the average balance drops?  Obviously consistently larger business balances will go to higher interest-bearing accounts, and much more so, when rates actually rise to something meaningful.

It’s the toggling back and forth between “interest” and “fees,” when the interest is hardly significant in the first place, that shows the point here is not a straightforward fee structure, but rather the smoke-and-mirrors of a bait and switch.

So it’s not really the fees that scratches the rash, it’s the opacity.

Opacity is always a banker’s friend.  Opacity is also a reason to end a friendship.


Please also see related post:  Why You Hate Your Bank

and Maybe there’s hope, The kitty called me back

[1] Actually I signed up with North Fork Bank, a business-oriented bank built up on Long Island, then making an aggressive push into Manhattan at the time I started my business.  Their Free Business Checking was of course why I went with them in 2004.  But in an era of constant bank mergers, it makes no sense to expect a bank to maintain the same deal over the years, or to expect any personnel to stay in place.  North Fork fatefully bought Alt-A giant Greenpoint Mortgage in 2005 (seemed like a good idea at the time!), then got bought by Capital One in 2006.  Capital One announced the elimination of Alt-A lending in August 2007 and took a massive hit on that investment.  Ah, shareholder-wealth destruction via bank merger…good times!

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Why You Hate Your Bank

whats in your walletWarning:  This is a story about customer service in the banking industry, so reader discretion is advised.  Do not read if you are prone to high blood pressure.  Also, this is not an apocryphal story.  This actually happened to me this week.[1]

The Background to the Problem

One of my businesses became inactive last year, so at the end of the year I closed out my checking account for that LLC with Capital One.  This Spring I filed articles of dissolution with the Delaware Secretary of State (where the LLC was created), as well as with the Texas Secretary of State (where I was doing business.)

Also this Spring I received a statement from an old $25,000 Capital One Line of Credit affiliated with this business entity.  It showed a $0.02 balance owed, a mistaken leftover from the last time I used the line, probably about two years ago.  A few months back I tried to close the line in person at the branch but the branch manager said they didn’t handle business lines of credit there, and she gave me a number to call to sort it out with Capital One customer service, over the phone.  So far, so good.

Two Pennies

I’m enough of a detail-oriented person when it comes to my businesses that I decided to get in touch with the bank and definitively close out the line of credit.

Two cents is silly, and the result of a bank error from a few years back, but it was a loose thread that I needed to tie off, and anyway it’s probably not a good idea to have open lines of credit that I’ll never use, especially since I had dissolved the business.

Also, I’m a Mary Poppins fan, and a finance-guy, so how can I not appreciate the ironic, iconic importance of two pennies (Tuppence), when it comes to banking stability?

Like I said, I had visited my bank branch to close the account, but the manager told me to call customer service.  Evidently Dick Van Dyke was not available at that time.

The Tragedy of Antigone

I called the customer service telephone number at Capital One provided by my branch manager. After receiving an automated voice menu in which “close my line of credit account” was never an option – on the second time through the automated voice menu, I think I pressed ‘1’ for loan account balance – and  reached a human. 

On her request I gave my first and last name and account number and explained that I needed to close my line of credit.

“Please hold for someone who can help.” Click.

Okay…another two minutes pass.

“Hello, this is Antigone for Capital One, can I have your first and last name and account number?”

Of course she can.  Again. Not a problem.

I explain that I would like to close my line of credit associated with one of my business entities which has been inactive for a long time, and that the associated checking account has been closed for months.

This is where the drama begins.

“Uh, do you know you have a balance on the line?  We will not be able to close it.”

“I know that.  It’s 2 cents.  That’s been on there for a couple of years.  After I transferred money from my checking account to pay off the balance, the 2 cents showed up.  Probably a day’s interest accrual or something like that, by mistake.”

“Ok, but the system won’t let me close the account if you have a balance.”

“But it’s a mistake by the bank,” I replied.  “The line always automatically deducted monthly payments from the associated checking account.  I made sure to request a full payoff of the line when I closed the checking account.”

“Ok, but the system won’t let you close the account.  You’ll have to go into the branch to do it.”

“I have another Capital One business checking account, and I have a Capital One credit card, maybe can you take the 2 cents from there?  I’d really like you to have the 2 cents.  I understand this is important.” (Because, again, “Tuppence”)

 “We can’t do that.  You’ll have to go into your local branch.”

“Well, I went to close the account at the branch, but they said they couldn’t close business lines of credit at the bank.  It has to be done over the phone, and this was the number the branch manager gave me.  Maybe you could just check with someone?”

“Ok, could you please hold and I’ll check?”


5 minutes of hold music.  My soul begins to ache.  I can feel the already-advanced process of telomere shortening in my chromosomes accelerate.   Antigone returns.

“I’ve checked with my manager, but there’s really nothing that can be done if you’ve got a balance on that line.”

“I understand.  But you see, the branch says they can’t close it, and now you say you can’t close it.  And I’m afraid if I go back to the branch they’ll say the same thing again.  Could you please just recheck, because we’ve got an insolvable problem.  I’m really trying to get you your two cents, and I really want to keep your records up to date.  But this is beginning to bug me.”

“Ok, let me put you on hold again and call your branch directly to see if I can get them to help you close the account.  What’s the address of your branch?” 

I look it up online and provide her with the correct address.  Then, hold music for another 8 minutes. 

Entire civilizations, like the Whos of Whoville on specks of dust under Horton’s protection, grow, flourish, and perish in the interim.  Red giants become white dwarfs.  And our little blue orb floats alone and unnoticed, two-thirds of the way out on the spiraling Milky Way galaxy.

“Hi, Michael?  I reached the branch, but Cynthia who answered the phone said she couldn’t do it, and the branch manager was in a meeting.  The best thing is probably to just go down there.”

At this point in the call, 18 minutes into my epic quest to close the Tuppence Line, I’ve moved – in my mind – into full-blown unhappy mode. 

The NSA, undoubtedly monitoring this (and every other call we’ve ever made) will have registered a voice-tone recognition alert that the customer on the line, me, is no longer ok with how things are going.  Although I am still calm and mostly even-keeled, the absurdity has become too much.

“Antigone, listen, I’m not upset with you, but can you see how this whole episode really doesn’t work, from a customer service perspective?  Can you get the absurdity of this?  Are you a Mary Poppins fan?  I am.  Do you remember the Tuppence Song with Dick Van Dyke as the old banker?  I understand the importance of 2 cents.  Even though it’s a bank error, I really want to pay it, but I can’t.  You won’t let me.  And even though I’ve now spent 18 minutes trying to help the bank, you won’t let me.  And to leave it unresolved like this is really unsettling.”

I urged Antigone to try to elevate the problem with a manager, and to figure out a way to solve the problem for the customer.[2]  She promised she would “open an inquiry” with a manager and someone would get back to me.  We ended the call.

The Law and the Higher Law

I really don’t blame Antigone.  She remained positive and polite throughout the call, albeit ineffective.  She isn’t the main problem.

Antigone’s stuck in a bank that values ‘the system’ and ‘efficiency’ – whatever that means and at whatever the cost – over human judgment.[3] 

Why do people hate their banks?  We hate banks because we sense, rightly, that banks respond to a single set of laws.  At every turn, bank customers must be treated a certain way, and therefore be reminded that they are subject to non-negotiable societal laws around process, automation, and efficiency as understood by the company.

Sophocles’ character Antigone, of course, argued that a higher law prevailed over traditional societal law.

In classic Greek theater, the name Antigone has become short-hand for loyalty to a higher moral law – the right to honor our dead – over fealty to a flawed societal rule, punishment for challenging the ruler.  I swear I’m not making up Antigone’s name as a customer service rep at Capital One. 

I see in my interactions with her and Capital One this week as encapsulating certain fixed rules of customer service in an extremely anomic corporate world.  I get it that my bank has a ‘system’ rule about closing lines of credit with outstanding balances. 

I don’t expect Capital One’s Antigone to break out of her proscribed role and commit professional suicide, as Sophocles’ Antigone commits bodily suicide, in honor of a higher law.

But for the love of Oedipus’ cursed lineage and Polyneices’ unburied body, can I please get a human being with some power to be reasonable about the higher-order goal of customer service at my bank?  For fuck’s sake.

And now I will start an argument with myself.

The Bishop and the Banker – Is Automation a Tragedy?

James Jones, the Bishop of Liverpool, England – a sometime commentator for the BBC such as in this program on prisons – interviewed me last month for an upcoming program the BBC will call “The Bishop and the Banker.” 

The main thread of his interview query was the following: “By automating[4] the mortgage lending process in the lead-up to the 2008 Crisis (and presumably beyond) did we lose the ‘humanity’ in bank/customer relationships?  And his follow-up point by implication: can we reintroduce ‘essential humanity’ to the mortgage lending process?

My answer to the Bishop was essentially “No.”  Of course, you don’t just say “no” to a Bishop, so I said more than that, but really that sums it up.

No, I don’t think automation is the key culprit of the 2008 Crisis, and therefore ‘reintroducing humanity,’ to the lending relationship is not the key solution.

During the interview I talked about the price of tomatoes, as an analogy for mortgages.  Yes, sometimes modern tomatoes are tasteless cardboard things, but they also come cheaply and affordably.  Few people would choose to pay $9 for tomatoes, which is the price we could probably retail them in bulk if we returned to the labor-intensive ‘humane’ way of growing tomatoes – in our back yards. 

Adam Smith’s point about the division of labor in pin-making still prevails.  Incredible gains come from splitting up the task of producing the pin-head from the pin-body.  Efficiency in human production generally is a good thing, with great customer benefits.  Few people, if they understood all the consequences, want to take out super-expensive mortgages, even if George Bailey of Bailey Building and Loan Association kindly oversees the whole process himself.

What I think the Bishop missed, so I’ll reiterate my initial response to him here, is that the efficiencies of mortgage lending since the early 1980s are totally awesome.  Why?  Because my 2.75% interest rate 15-year mortgage is totally awesome.  And that kind of rate is not at all possible from the ‘humanizing’ Bailey Building and Loan Association.  Without all the efficiencies of this dehumanizing specialization, mortgages right now would probably cost 8-10%.[5] 

This interview came back to my mind this week, however, as I smacked up against the ultimate dehumanizing experience at Capital One Bank.  Am I a hypocrite for believing strongly in the efficiencies of mortgage lending when it benefits me, but railing against dehumanized customer service when I’m on the receiving end?

I would still answer the Bishop the same way, but my heightened blood pressure from Capital One gave me a new chance to reconsider his question.

I still don’t think we should blame 2008 on the dehumanization of mortgage underwriting, although I need to be careful to figure out why efficiency works in one context and not the other, aside from how it affects me personally.

How to reconcile this, aka how not to be a self-serving hypocrite

Can a bank be both efficient (cheap mortgage money is good) and humane (torture me for Tuppence is bad)?

One solution it seems to me is that Antigone, and all of her customer service cohort, needs more power to use human judgment.  She should never have to spend 18 minutes with me on the phone – in addition to whatever follow-up time she spent afterwards – trying to solve a problem worth two cents to the bank.  She needed to be trusted with business judgment, which clearly nobody in her chain of command has thought to give her.  To be thwarted twice in her quest to over-ride the ‘system’ means the earthly law of systemic efficiency needs to be trumped by the higher-power law of human judgment.

I think we hate banks because for the most part we sense that there’s no over-ride of the system available for person-to-person judgment.  I’m enough of an Adam Smithian to want total bank efficiency, but I also want to avoid the absurdities of bureaucratization.

The NSA treatment

In my imaginary non-existent poll of bank customers this week – 98% of people[6] reported disappointment with their bank’s customer service.  Why is that? 

At base we suspect, rightly, that the bank couldn’t care less about us as individuals.  Furthermore, banks operate within such a highly regulated environment that their entire frame of reference is to fit customers into neatly defined market and regulatory segments. 

We don’t think of ourselves as bits of data, but the bank does, and we can’t change that. 

Which reminds me:

Among the most frightening aspects of the recent NSA phone-tracking revelations is the creeping fear that we could, any one of us, be caught up helplessly in a faceless bureaucratic nightmare.

Personally, I prefer my spies to use common sense, actual evidence, the justice system, and human judgment before choosing who to target for snooping on the phone and internet.  Apparently, however, all citizens’ private behavior can be subject to the same anonymous tracking, classification, treatment.  This doesn’t sound like a good direction for us all to go in.

Advanced efficient technology, whether for snooping or banking, has temporarily outstripped our societal ability to set up limits to the system.

The 2008 mortgage crisis also felt like it came from this same uncomfortable place of valuing the anonymous efficiency of the system.  At least a part of the Occupy Wall Street movement responded to this terrible feeling that we are just data-points, adrift in a cruel economy.[7] 

If hyper-toxic CDOs rip financial holes in our biggest banks, and 6 million people suddenly get laid off in a 2 year period, who can you appeal to?  Two million homes get foreclosed upon by robo-signing attorneys.  $80 Billion of public funds get pledged from one day to the next – to prop up systemically essential banks still paying bonuses to their employees.  The efficiency of the “system” must be preserved at all costs, but what about the basic humanity?  What about what’s ‘right’?

I don’t yet think the cruel automation of Skynet – whether in banking or the NSA – has permanently won this war.  But we’ve got to figure out a few higher laws that trump the lower-order laws of the system.  We need a new Sophocles to remind us of what’s right.

Postscript to my Tuppence Debacle with Capital One

After I’d written most of this post, a representative from Capital One Bank called me today to tell me, in a treacly voice reminiscent of Bill Lumbergh in Office Space, that he’d resolved the problem for me.  “We’re just going to go ahead and forget about that two cents, hmmMK?  It seems it was from two years ago, so even though technically it’s still owed we’re just going to go ahead and take care of it on our end, hmmMK? Is there anything else I can help you with?”

Um.  No.  You’ve been a big help already.  I refrained from telling him a less Julie Andrews version of the phrase “Go Fly A Kite.”

If you’ve got tuppence for paper and string, you can have your own set of wings, with your feet on the ground, you’re a bird in flight with your fist holding tight (da dum dum) to the strong of a kite.  Ooooh, let’s go fly a kite.


Please see related post, Another reason you hate your bank

and also related Maybe there’s hope, the Kitty called back


[1] And something similar happened to my wife trying to close a checking account with a $5 balance.  And it will happen to approximately 2.38 people nationwide in the time it takes you to read this column.  Ok I made that last number up.

[2] My managing editor (aka wife) insists I clarify at this point that while the words I used may technically have been ‘polite,’ my tone might have channeled my “extremely annoyed bond salesman” voice, which has the power to wither small plants and make children cry.  And also, she really hates it.  Ok, maybe just a little bit of Mr. Gekko returned, but really in this case mostly I stayed cool.

[3] Speaking of allowing for human judgment, this TedTalk is absolutely worth your 20 minutes on this particular topic.  When we rely on rules, algorithms and bureaucracy instead of human judgment, that way madness lies.

[4] I’m paraphrasing the Bishop’s question, but by “automating” I take him to mean introducing efficiencies and algorithms that allow different people and distinct institutions in the process to pre-screen customers, underwrite the loan, provide the capital, and service the loan, rather than do this all in one bank.

[5] I’ve frequently been both a creator as well as an investor in seller-financed mortgages – essentially a do-it-yourself mortgage between a buyer and seller of real estate that eliminates the need for a mortgage bank.  It has rarely made sense to lend at less than an 8% interest rate, and as an investor I’ve always demanded significantly higher.  That’s how I know bespoke mortgage lending is WAY pricier than the type of 2.75% rate available through ‘dehumanizing’ automation.

[6] I rounded downward to be conservative.  That’s just good scientific practice.

[7] Another part of the Occupy Wall Street movement I guess just likes camping.  On concrete.

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