If you find yourself rushing to the “safety and experience” of a big bank, just remember this story.
Listen To This Story
We all heard the advice, in the aftermath of Silicon Valley Bank’s rapid demise: We should park our precious resources with the biggest banks. And in fact hordes of depositors did just that, pulling their deposits from small and medium size banks — where you just might have a shot at getting the bank’s president on the phone — and transferring them to the behemoths, which actually “know what they are doing.”
I had to smile.
It was a bitter smile, though. Because I am here to tell you that the big banks are… not… very… competent.
This story has nothing to do with the safeguards and sound investing we all want to see from banks. No, it concerns the spectacular fecklessness of some of these large organizations on the most mundane of matters.
What I am about to share is a personal story that nonetheless speaks to a problem affecting us all: the danger of bigness and consolidation.
The narrative begins in the spring of 2021, when the nonprofit news organization I founded, WhoWhatWhy, asked our bank, JP Morgan Chase, to issue a payment to a regular vendor.
At the time, mailing checks was still a common method, so we would order a check online and Chase would send it. Simple enough. Chase was to issue and mail a check in an amount exceeding $5,000 to the recipient’s PO Box.
Well, it should have been simple. Sometime later, though, the vendor contacted us to ask where his payment was. This surprised us since we looked and were able to verify that payment had been ordered. We also were able to see an image of a cashed check, with a signature.
But when we showed it to the vendor, he told us that the endorsement signature was not his.
We quickly verified that the signatures were quite different. In short, someone intercepted a check mailed from a bank to a United States post office box and cashed it, pretending to be the recipient.
It’s worth noting here that this is not, as we shall see, some one-off rare bird — so a big bank should have a routine protocol in place to deal with it (e.g., refund the client’s loss and then deal with the bank-to-bank reimbursement).
Obviously a bank like Chase or TD Bank can afford to be without the $5K a lot better than some mom-and-pop vendor or someone on Social Security.
We immediately contacted Chase. They needed us to submit an affidavit for their fraud department. We did, but for some reason, they later told us they never received it. So we sent a second affidavit.
This one they received, and in due course they began their inquiries.
After some time had passed, we received a note from the bank: They were still trying to run this down, but in the meantime they would not be crediting back to our account the $5,000+ in question.
The issue: They needed the corresponding bank — TD Bank, the one that had cashed the check — to investigate and report back their findings.
The problem, however, was that the other bank was not responding.
Their Response: There Is No Response
In the two years since discovering the fraud, the only time I ever had a semi-meaningful conversation yielding even a bit of information was in February 2022 when I spoke to “Mia” in ”option 3.” She was nice enough. She said they had “escalated” a month earlier, and that on the very day I had called, one of the investigators was “visiting it” — it, apparently, being the issue, not the other bank.
Mia told me that the most recent action was a “demand letter” sent to TD Bank at “Atrium Way.” I had no idea what the significance of that address or location is, and apparently, neither did she. Then, she told me, they had waited a week for a response, and now it was two weeks. She wasn’t sure if actual phone calls had been made to TD Bank, “because that was handled by the back office.” But, she said, “we were unable to get a response from them.”
Mia said this situation would qualify as either a Claims Investigation or a Corporate Security Investigation. Normally, she said, it would take 30 to 90 calendar days to resolve. “I’m not sure what is holding them up.” She confirmed that Chase’s first contact with TD Bank was back in September 2021.
As I pressed the issue and asked more questions, Mia said she would contact “our senior service specialist.” She said she had tried to escalate this, but that, unfortunately, “since we have already tried to reach out, we are not able to send another request to escalate this further.”
Mia then explained to me that what Chase was doing was a “courtesy” to our company. But, she added, brightly, “what is great is the case is still active.” And, she added, like a detective with a cold case: “The case will remain active. We will never close the claim!”
In the intervening period, I spoke with various New York State entities and individuals, and to people at congressional banking committees, as well as attorneys who handle bank-related matters. Everyone seemed a little puzzled by the whole thing, agreed it seemed ridiculous, and no one knew quite what one would do to get this resolved, what the banks’ obligations were, or even who would actually know the answer.
For those worried about government over-regulation, I think I can invite them to relax.
To make a long story short, this continued for months, and months turned into years. Every time we checked with them, Chase told us that they had still been unable to get a response from TD Bank. Of course, I had to italicize that one.
I then began the tiresome process of trying to get bank staff to acknowledge just how ludicrous it was for one of the world’s largest banks to ascribe their failure to refund our lost money to the fact that another of the world’s largest banks was not replying.
I took this to person after person, phone calls transferred from one to another, calls accidentally(!) disconnected and then back in the queue and then pushing the buttons and then repeating the story. Over and over and over.
Finally, a few months ago, I spoke to our branch manager and a “private banker” working there. Finally, I thought, we’d get results. However, they pretty much threw their hands up because of the impossible bureaucracy and rules in place, and the lack of ability to get things actually handled outside rigid statements of “this is just how we do it.”
It all reminded me — and keeps reminding me — just how much bullsheet are those claims that the government is inherently and singularly inefficient and our lives will be gloriously simplified and our needs addressed if only we shrink the beast and trust “the market.”
If This Is ‘Human,’ Give Me AI
Anyway, I eventually remembered having once discovered (not advertised, far as I can tell, anywhere on their site) that there is recourse: an “executive office” where, if you can find the number, you can speak to an actual person supposedly authorized to cut the red tape and get problems resolved.
At the executive office, I spoke with one person, and then a second. She was assigned to our issue. After that, she contacted me several times by phone to update me on what the vaunted Executive Office was accomplishing. Here’s what she told me:
Apparently, the other bank has not responded.
Ah, I see. I did see. A long time ago.
I asked her what they intended to do about it, and she explained that they were already doing it. They were going through the processes. And what were the processes? Why, the very same ones since the beginning.
I didn’t know whether to laugh or yell, but I did point out to her that if the shoe had been on the other foot — like, say, her apartment is flooded and her landlord isn’t responding — she would not simply let it rest at “no response.” She made a sympathetic noise then continued with the company line.
I have no idea why TD Bank won’t answer Chase. I have no idea how those interbank processes work, though I was repeatedly assured they have a marvelous and effective system from which they must not deviate.
I do notice that Chase’s CEO Jamie Dimon is all over the news and appearing everywhere offering his sage advice and views on where the economy is headed and on what we need to know to be secure.
Oh, and, according to the Lifestory research firm’s survey, TD Bank is the “best” and Chase is “most trusted.”
Meanwhile, I just saw an ad for TD Bank that said “TD BANK: Unexpectedly human.”
Trusted or not, best or not, unexpectedly human or not, here we are, approaching the two-year anniversary, and we’re still out more than five thousand bucks, countless hours of burned time, and, obviously, the toll of chronic aggravation.
And that’s putting aside the usual bank interactions you all know: Press 1 for information you didn’t want, Press 2 for accidental disconnection, Press 3 to hear reverything repeated from scratch, Press 4 to get the suicide hotline.
So, when you rush to the “safety and experience” of a big — and getting bigger — bank, just remember this story. And do not for one second believe you can expect peace of mind. Or that your bank, to paraphrase their marketing, “cares about you.”
There’s a PS to this, but it isn’t the great news that Chase and TD have suddenly gotten their acts together. A recent article in The New York Times reported that the exact same kind of fraud perpetrated against us has become fairly commonplace, but also quoted particulars that were different from what we were told by the bank:
Am I liable for funds taken from my account with a washed check?
No, said Mr. Benda of the American Bankers Association. Consumers are not liable for fraudulent or counterfeit checks. “The bank will make you whole,” he said. (Depending on the state, customers usually have 30 to 60 days from the date of their last bank statement to report unauthorized checks.)
But banks must investigate reported fraud and sort out which institution is liable for the loss, so the time it takes to return your money may vary. Customers may request a provisional credit while the inquiry proceeds, Mr. Benda said.
American Banker, a trade publication, reported last year that smaller banks had complained that because of increased fraud, big banks were dragging their feet on covering the funds from stolen checks, taking weeks or months to pay.
I have news for The New York Times: We’re approaching the two-year anniversary of this mess — and the bank is still dragging its feet.
For further context, I refer you to the famed Abbott and Costello routine, “Who’s on First?”
As for the bigger issue at hand — the “smaller” Silicon Valley Bank, despite all the stupid things they did, is another example of the little guy getting pushed out to make for more consolidation. And consolidation is almost never in our interests. Try getting Jamie Dimon on the phone.