A substantial percentage of consumers aren't happy with their
banks, but most find it too much of a hassle to switch.
That's the main finding from a new survey conducted by the
Consumer Reports National Research Center
. The center is affiliated with Consumers Union, an advocacy group
and publisher of Consumer Reports magazine.
The center found nearly 20 percent of checking-account holders
had considered switching banks during the past 12 months. However,
most failed to follow through, saying it is too much of a hassle to
actually transfer their account to a new institution.
Consumers unhappy about fees and bank rates
According to the Consumer Reports survey, checking-account
holders commonly cited concerns with rising fees and uncompetitive
bank rates as reasons for wanting to make a switch. In addition,
poor customer service played a role in prompting consumers to
reconsider where they do their banking.
Survey respondents cited these three reasons as the main
motivators to potentially moving their checking accounts:
- Fee increases for routine services: 43 percent
- Better terms offered by other banks: 38 percent
- Poor customer service: 26 percent
However, in most cases, consumers never follow through on their
desire to change banks.
"Unfair bank practices and rising fees are prompting more and
more consumers to consider voting with their feet and taking their
money to another bank or credit union," said Suzanne Martindale,
staff attorney for Consumers Union, in a statement. "But many
consumers don't follow through because moving your money takes a
lot of time and money and some bank policies make it harder than it
Switching banks considered a time-consuming
Despite discontent with banking practices, consumers are
move their checking accounts
. For many of those surveyed, the main obstacle appears to be the
time and labor involved in setting up a new account and updating
Survey respondents provided the following as the top reasons
they failed to
- The trouble involved in transferring automatic payments and
bills to a new account: 63 percent
- Concerns that the process would require too much time and
effort: 37 percent
- Fees required by the bank to transfer money: 28 percent
Nearly half of consumers who didn't switch their banks said they
would if they could make free, same-day electronic transfers
between banks. In addition, a third said they would move their
checking account if they had a portable account number that could
be transferred to a new bank and slightly more agreed having banks
reroute automatic transactions to their new bank for a period of 14
days would make them more likely to switch.
Consumers Union has also advocated for regulatory changes that
would eliminate barriers that discourage consumers from taking
their checking accounts to another institution. Among their
recommendations, the group believes check hold times should be
reduced, consumers should be able to reopen previously closed
accounts and banks should be prohibited from charging unfair fees
to close an account.