Today Consumers Union, the public policy and advocacy arm of Consumer Reports, called upon Congress and the Consumer Financial Protection Bureau to enact measures to make it easier for consumers to move their money to a new financial institution.
Consumers Union criticises that:
- While nearly one fifth of consumers had considered switching to a new financial institution in the previous 12 months, the challenge of transferring automatic payments and other factors kept half of them from making the switch.
- Having enough money to maintain two accounts during the switching process posed a significant barrier. Since switching can take up to six weeks, the only safe bet was to have enough money in both accounts to cover any potential automatic debits.
- Figuring out how to make the switch can be a confusing process for many consumers. None of the top ten largest banks reviewed by Consumers Union provided customers with clear instructions for closing accounts on their web sites or in written account disclosures.
Suzanne Martindale, staff attorney for Consumers Union argued: “Consumer frustration has only grown over the past year as bank fees have continued to rise. But many frustrated consumers end up staying with their bank because switching to a new financial institution can turn into a big hassle. It’s time to make it easier for consumers to move their money so they have a real choice when it comes to where to bank.”
Consumers Union therefore calls upon Congress and the Consumer Financial Protection Bureau to introduce measures that inter alia require banks to bear the responsibility for transferring a customer’s automatic payments and deposits from the old account to the new account within 14 days, that prohibit banks from assessing unfair fees for closing accounts, and that banks provide clear and accessible account closing procedures.
Further information: www.consumersunion.org/pub/core_financial_services/018494.html
Source: Consumers Union