Brian BandellSenior Reporter – South Florida Business Journal
Bank of America, Wells Fargo Bank and JPMorgan Chase Bank are the institutions Florida consumers complained about to regulators the most in 2011, according to a study by Miami-based bank analyst and economist Kenneth H. Thomas.
Working through his company K.H. Thomas Associates, Thomas obtained records of complaints filed against financial institutions to the Florida Office of Financial Regulation’s Division of Financial Institutions, the state’s chief bank regulatory agency.
Florida consumers lodged 1,231 complaints against banks in 2011, down from 1,379 in 2010. However, that’s still significantly higher than the 992 complaints from 2008 – when the financial meltdown was just starting to take hold.
The trend in hard-hit South Florida wasn’t so positive. Complaints from Monroe, Miami-Dade, Broward and Palm Beach counties increased to 180 in 2011 from 149 the year before. Thomas said it’s because the housing problems are worse in South Florida.
“Even though the economy has improved in the state, we are still the epicenter for the housing crisis,” he said. “People stilling trying to do workouts and modifications, and they aren’t getting the help they are looking for from these banks.”
Filing a complaint against a bank is a serious matter, Thomas noted, as it involves filling out a five-page form and attesting that the information is true. He recommends that people try to work out issues with their bank before contacting the OFR.
“To get to that point, you have to be really upset,” he said.
The OFR complaint page is here.
The most common complaint in 2011 was account balance disclosures, at 28 percent of all filings, according to Thomas. That includes disputes about overdraft fees – the subject of many lawsuits against banks – and other automatic fees.
The second most frequent complaint was mortgage problems, at 23 percent. Other common issues were general loan complaints and credit card disputes.
Thomas’ records show that most complaints the OFR received in 2011 were referred to federal regulators to follow up on. Only 7 percent of complaints were found to have no violation, and 4 percent were resolved by the OFR.
City National Bank President and CEO Jorge Gonzalez said his institution excels in customer service because it has a 65-year history in the state and it makes sure its bankers don’t have too many clients to service.
“If a banker has 20 relationships, they can probability deliver a high level of service to everybody, but if they have 100 relationships, they can probably only deliver a high level of service to a few of them,” Gonzalez said. “It’s a slightly more expensive model, but you need that for best-in-class service.”
Last year, City National hired Steven Clark as its service director. Clark has experience with customer service in both banking and hotels, such as the Ritz-Carlton. He said his goal is to create a concierge-level customer experience.
Gonzalez said it’s worth it to spend on customer service because that reduces client turnover, which is expensive. He said it’s important to treat all customers the same – no matter how much money they have. Some institutions offer higher levels of service to wealthy clients.
Many banks, especially those struggling with losses, have cut back on staffing levels in recent years. That includes top complaint-getter Bank of America (NYSE: BAC). Officials with BofA didn’t respond to a request for comment.
Space Coast Credit Union had the most complaints of Florida-based institutions and was in fifth overall. Thomas noted that SCCU had a 0.6 percent deposit market share in Florida in 2011, but attracted 6.5 percent of all complaints.
SCCU spokeswoman Meredith Gibson said the credit union changed its Member Rewards relationship pricing program in 2011 for all 370,000 members, and that resulted in some people moving to different types of checking accounts. She said former members of Eastern Financial Florida Credit Union , which SCCU merged with in 2009 to enter South Florida, have complained at a higher rate than historical SCCU members.
“They experienced many charges as a result of the merger, and they continue to be unhappy with SCCU’s practices in some areas,” she said. “A particular market condition that caused complaints in 2011 is dissatisfaction with the disposition of requests for mortgage loan modifications. While SCCU has been actively working with members who are experiencing hardships, there are cases where we cannot provide a solution that is satisfactory to the borrower.”
Gibson said SCCU has an internal system for tracking and responding to customer complaints, and these entries are regularly reviewed by senior management.
“To date, the OFR has not found that SCCU is in violation of any regulation and has closed all cases,” she said.
Considering that BofA holds a 19.1 percent deposit market share in Florida, Thomas said its 13.6 percent share of all complaints isn’t that bad. Wells Fargo (NYSE: WFC), SunTrust (NYSE: STI), Regions Bank (NYSE: RF) and BB&T (NYSE: BBT) also had a lower ratio of complaints compared to their deposit market share.
However, both JPMorgan Chase Bank (NYSE: JPM) and Citibank (NYSE: C) had a high share of the complaints compared to their place in the Florida deposit market, Thomas’ study found.
The most banks that received the most complaints in Florida in 2011 were:
- Bank of America and affiliates: 172
- Wells Fargo Bank and affiliates: 115
- JPMorgan Chase Bank and affiliates: 99
- Citibank and affiliates: 53
- Space Coast Credit Union: 48
- SunTrust Bank and affiliates; 48
- Regions Bank: 25
- BB&T: 24
- HSBC Bank and affiliates: 19
- BankAtlantic (NYSE: BBX); 18
- Capital One (NYSE: COF): 18