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Bank of America Cutting More Jobs

This article was written by in Career and Work. 13 comments.

After Bank of America investors have endured a year of suffering, Bank of America employees will start to feel the company’s troubles. Although the bank already announced significant layoffs this year, hot on the heels of a $5 billion boost from Warren Buffett, an overdraft fee lawsuit settlement, and a settlement for a lawsuit pertaining to mortgage-backed securities, the CEO of BofA, Brian Moynihan, announced the company will shed 30,000 jobs between October 2011 and December 2012.

For now, Bank of America is the largest bank in the United States. This move is a reflection of the financial industry, which, in turn, is a reflection of the stock market, with financial companies being a strong component of indexes. The stock market is a partial reflection of the broader economy.

Bank of AmericaWhile not currently in a technical recession, this is just another piece of bad news in addition to the economic woes currently affecting us. Some have a more direct effect than others; high unemployment rates hurt the wallet for many families, while the European debt crisis seems to be somewhat removed from Americans’ daily financial experiences. Layoffs at Bank of America will obviously affect families who rely on BofA salaries and benefits, but it is a signal that economic turmoil may be around for longer than we had hoped.

We may be entering a period where companies want to avoid being “too big to fail.” After deregulation and a regulatory culture that permitted financial institutions to grow without restriction, companies wary of the consequences of being so large in an industry that still bears high levels of systemic risk may find it better in the long run to fly low — the “Careful, Icarus” approach to business growth.

So far this year, here’s the timeline for Bank of America job cuts:

I expect more announcements will come as the financial industry continues to struggle to find footing in the post-recession economic environment.

CNN Money

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Bank of America Shedding 6,000 Jobs So Far This Year

This article was written by in Career and Work. 7 comments.

Financial giant Bank of America is eliminating 3,500 more employees. With this addition to the 2,500 already lost this year, the score is up to 6,000. The bank is trimming the workforce to sell of businesses, like global credit cards and life insurance portfolios. The company’s profits overall aren’t growing fast enough, particularly due to not enough demand for loans, and the lack of excessive revenues is leading the bank to cut expenses.

Bank of AmericaBank of America is selling its Canadian credit card business to TD Bank, and will unload its credit card businesses in the United Kingdom and Ireland, as well. Selling these businesses as well as the life insurance portfolios will help raise capital to deal with a lawsuit. Earlier this year, AIG sued Bank of America for mortgage securities fraud. With the cash gained from the sale of these businesses, Bank of America should be able to afford the judgment, assuming the banks settle. Bank of America is also involved in its own class action lawsuit about overdraft fees.

The latest 3,500 terminations may not be the end of the bad news. The Wall Street Journal reports that the final number of jobs lost this year might be closer to 10,000 rather than today’s total of 6,000. Many employees have already been informed of their personal impact, but others will not be asked to pack their desks until later this year.

Photo: MoneyBlogNewz
CNN, Wall Street Journal, FOX Business

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Bank of America Settles Overdraft Fee Lawsuit

This article was written by in Banking, Featured. 975 comments.

If you qualify for the Bank of America overdraft lawsuit settlement, you may have already received a postcard in the mail from the bank. Here is information on the overdraft lawsuit, only one of many class action lawsuits against Bank of America. If you recently received a check from Bank of America for about $98, you have received a benefit from an earlier class action lawsuit pertaining to the bank’s debit cards. This article pertains to a later lawsuit regarding overdraft fees.

December 2011 update: While the judge has approved Bank of America’s settlement related to the overdraft class action lawsuit and has ordered Bank of America to pay $410 million, a member of the settlement class who objected to the settlement has filed a notice to appeal the ruling. With an appeal filed, it could take at least a year for the issue to be resolved. If the appeal is denied, customers may still be disappointed. With 13.2 million affected customers in the class and fees to be paid from the settlement fund to the lawyers and class representatives, the benefits each customer will receive are sure to be less than the value of a refund of even one overdraft fee.

Any compensation to affected customers is on hold until the judge enters the settlement and any appeals are filed.

Like many banking institutions, Bank of America processes debit transactions not at the time they occur, but in a batch, from largest to smallest. If they don’t still take this approach currently, they did in 2009 when a class-action lawsuit combined several other legal actions. 24 other banks in the United States and Canada were named in the class-action lawsuit, including Citigroup, Chase, and Wells Fargo.

The banks say that by ordering debits from largest to smallest benefits customers. For example, mortgage or rent payments are generally the largest debits, so they should receive priority and should be the first to be paid. This is not how it works in practice, however. The system is designed to make more money in fees, particularly from the paycheck-to-paycheck class of customers.

For example, five debits may be scheduled to post on a Monday:

  • $800 mortgage payment (check)
  • $200 purchase at the grocery store (debit card)
  • $100 withdrawal at a different bank’s ATM
  • $25 purchase at the book store
  • $4 coffee

That’s the order the funds will be taken from this person’s account. If there is $900 in the bank account, the mortgage payment will be processed, but the four other transactions will generate overdraft fees, one for each, likely totaling more than $100. If the debits were processed from smallest to largest, only the mortgage payment would cause a problem, and the check will bounce. This could cost the account owner less money, but a bounced mortgage payment could be troublesome.

In the more likely event that there is only $500 in this checking account, ordering debits from largest to smallest ensures nothing will go through without generating a fee. However, ordering the debits from smallest to largest, only the mortgage payment would bounce, and there would be no overdraft.

Bank of America will be paying $410 million to settle the class-action lawsuit, which also notes that the banks did not tell customers they could waive overdraft protection, allowing certain transactions to fail rather than paying a fee. Not every bank handles activity posting the same way.

The deadline to opt out of or object to the settlement was October 3. The official website for the settlement is bofaoverdraftsettlement.com.

Photo: Wonderlane
Reuters

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Customer Service: Politeness vs. Demands

This article was written by in Consumer, Featured. 19 comments.

The prevailing wisdom when dealing with customer service representatives is to just keep repeating, “Let me speak to your supervisor,” until you eventually get what you want. Every time I read this, though, I get defensive and annoyed. I can’t forget that year I spent answering the phones for Bank of America, and the myriad of emotions I’d go through in a given day. Sure, BofA is an obscenely big multi-national corporation that probably deserves some serious punishment for its role in our recent financial collapse, but it’s also run entirely by human beings, and the customer service department are the human beings you talk to the most.

I learned a couple of very important lessons as a CSR that are in direct conflict with the “let me speak to your supervisor” rule.

Lesson 1: A friend is more likely to help you

As a CSR, when a customer made a human connection with me, I was always more eager to find ways to help them. Of course I always stayed within the rules (well, almost always), but we bank employees had a surprising amount of leeway for actions such as refunding overdraft charges. Not that that’s really a problem, anymore.

When a conversation begins with understanding, I find that progress is easier to make. So now that I’m always on the other end of the phone line, I start with humility instead of anger. For example, pretend I’m talking to someone who just introduced himself as Alex:

Hi, Alex, my name is Smithee. I’m hoping you could help explain something that’s got me really confused.

  • Write down (or just temporarily learn) his/her name. Use it conversationally, but especially near the end just before whatever changes that need to be made are about to be made.
  • Acknowledge that he/she is an independent, intelligent human being with feelings. They will reciprocate that point of view on you, too.
  • Remember their position: they’ve been talking to people with problems like yours for hours. Believe it or not, they like it when they’re able to help. Give them a chance to help you.

Sometimes I’ll go all out and just start with nothing but a little humor:

Hi, Alex, my name is Smithee and I’m afraid I’m totally ignorant, but I hope you can help.

This opener always seems to get a chuckle from the other end, which makes both of you feel good.

Using this method has been successful for me: people don’t get mad at me, and I don’t get mad at them, and I don’t have to ask to speak to a supervisor. Sure, supervisors get brought in sometimes, but it’s always their idea first.

Starting with friendliness, I get fees reversed, special deals made, you name it. When I used to call the cable (or satellite, or FiOS) company, I always ended up paying less per month for more channels, or higher bandwidth.

It’s not all hugs and puppies, of course.

Lesson 2: Even your friends can’t always help you

The other thing that bugs me about the “let me speak to your supervisor” rule is the innumerable times I personally witnessed irate customers being passed up the line, to no avail. If you’re calling with an unreasonable request (for example, this all-too-true story: “I wrote a $500 check two days before I got paid, sure, but you guys knew I’d get paid on Thursday, why did the check bounce?!”), no amount of yelling will fix the situation. You’ll simply end up ruining other people’s days, ten minutes at a time.

Ask yourself:

  1. Was this my mistake?
  2. Even so, do I have a good history as a customer? (Oh, the data these CSRs can look up…)
  3. Can I spare five minutes to walk off some steam and try to identify with the point of view of someone with a worse job than my own?

If the answers to all of those are yes, then please pay it forward instead of stealing it backward by taking that five-minute walk.

Are there exceptions? Of course! Sometimes the big behemoth is the one who screwed up. But mostly, it’s us customers who made the mistake. If you can sound like you’re willing to laugh it off, the company will be more willing, also.

That’s been my experience, anyway.

Additional photo: melloveschallah

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Bank of America Adding Annual Fees to Credit Cards

by Flexo

With the current and upcoming changes in the credit card industry due to the Credit CARD Act and other regulations put in place by the Federal Reserve, banks and credit issuers are maneuvering as much as possible to be in a good position to continue making money off their customers. Public corporations have responsibility to ... Continue reading this article…

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Ethical? Bank of America Sells Variable Annuity to Elderly Person

by Flexo

I find these stories very sad. First of all, it’s always the customer’s job to be educated about any options they might be considering — particularly when they’re shopping around for financial products. When a customer isn’t educated for whatever reason, it doesn’t provide justification for salespeople to suggest products not in their best interest. ... Continue reading this article…

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The Urge to Merge

by Flexo

According to the New York Times, Bank of America is buying MBNA. This is another reason why consumers should avoid carrying a balance on credit cards if they are being charged interest. As more credit issuers merge, there will be less competition. With less competition, annual fees and interest rates will rise. Update: CNN answers ... Continue reading this article…

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