March 1, 2017
-American Bankers Association
Banks have steadily won back customer trust since the financial crisis, but that trust could be endangered by sales pressure that isn’t based on the customer’s best interest, according to a new study by J.D. Power. Banks are now reporting record levels of customer satisfaction, and approximately 8 in 10 consumers say that their banks act in their best interest, that they trust their banks to do the right thing and that their banks act ethically.
The study found that high-pressure sales tactics and unexpected new accounts or fees reduced trust and increased the likelihood of switching. Although rare, more customers over time reported being pressured to adopt a product they did not want or need — 11 percent in 2015 versus 3 percent in 2011. Eight percent said they avoided going to branches because of the sales pressure.
The study also showed that 14 percent of customers said they have had accounts opened or funds transferred without their knowledge. Digging into these responses, J.D. Power found that these customers reported one of three experiences: simple and easily corrected errors, such as a typo in a Social Security number; identity theft or fraud by another customer, such as an ex-spouse in a divorce case; or unauthorized account openings by bank staff.
While the overall number of customers affected by these incidents is small, they are much less satisfied. More than half of those who had an unauthorized account or fund transfer or unexpected fees said they will definitely or probably switch banks in the next year — versus just 6 percent overall.
But banks did not need to eliminate sales pitches for customers to report satisfaction. Customers reported high levels of satisfaction when they received financial advice and product pitches, provided they also felt that bank staff had thoroughly identified customers’ needs and tailored promotions to those needs. More than 8 in 10 customers in this category said they would definitely continue to use their bank.
ABA’s Center for Regulatory Compliance recently released a Sales Practices and Incentive Compensation Assessment Matrix to help member banks assess and manage risks posed by their sales practices and incentive compensation programs.
An important step to finding a home, whether you’re renting or buying, is ensuring that you have a good credit history. The American Bankers Association suggests the following tips to improve your credit score.
Request a copy of your credit score report – and make sure it is correct.
Your credit report illustrates your credit performance, and it needs to be accurate so that you can apply for other loans – such as a mortgage. Everyone is entitled to receive a free copy of his or her credit report annually from each of the three credit reporting agencies, but you must go through the Federal Trade Commission’s website at www.annualcreditreport.com, or call 1-877-322-8228. Note that you may have to pay for the numerical credit score itself.
Set up automatic bill pay.
Payment history makes up 32 percent of your VantageScore credit score and 35 percent of your FICO credit score. The longer you pay your bills on time, the better your score. Avoid missed payments by setting as many of your bills to automatic pay as possible.
Build credit through renting.
VantageScore’s scoring model, created by the three major credit bureaus, will now weigh rent and utility payment records. This will allow it to score as many as 35 million people who previously couldn’t get a credit score.
Keep balances low on credit cards and ‘revolving credit.’
Racking up big balances can hurt your scores, regardless of whether you pay your bills in full each month. You often can increase your scores by limiting your charges to 30 percent or less of a card’s limit.
Apply for and open new credit accounts only as needed.
Keep this in mind the next time a retailer offers you 10 percent off if you open an account. However, if you need a new line of credit, don’t jump at the first appealing offer; compare rates and fees offered through mail solicitation, on the Internet or at your local bank.
Don’t close old, paid off accounts.
According to FICO, closing accounts can never help your score and can in fact damage it.
Talk to credit counselors if you’re in trouble.
Using legitimate, non-profit credit counseling can help you manage your debt and won’t hurt your credit score. For more information on debt management, contact the National Foundation for Consumer Credit (www.nfcc.org).
Is clutter weighing you down? Winter is the perfect time to declutter your home and set yourself free. As daunting as it may sound, it doesn’t have to be. Look at the bright side, the less you own the less you have to clean and organize. More clutter = More stress. Sounds good but where do you start?
- Make a plan. Create a list and prioritize the areas of your home that need to be decluttered. Start small, it doesn’t have to be a whole room; it could be a drawer, closet or area that needs work. Congratulations, you have completed step 1!
- Be realistic. Dedicate 15 minutes a day, 3 days a week, to decluttering your first room/area. Pick an easy place to start. When you have completed one area then, and only then, move on to the next. Enjoy your success!
- Apply the hanger method. The last thing you want to do is donate clothing you wear or keep things you don’t. In an effort to identify the clothing you no longer need, hang all of your hangers in the reverse direction. After wearing an item, return it to the hanger facing forward. After each season you will have a more accurate picture of the clothes you no longer wear.
- Get 4 boxes and label them: Trash, Donate, Keep and Relocate. As you go about your daily life and find items in these categories, place them in their appropriate box. This is an easy yet highly effective way to help organize your home.
- Donate. You should feel good about the decision to donate items knowing these items will go to someone in need.
Relax and enjoy spring in your clutter-free home!