As a personal finance writer, I make it my business to stay on top of what bank accounts are actually willing to pay customers for their business, and in a low deposit interest rate environment like the one we’ve been living in for the past few years, online savings accounts are generally alot more generous than brick and mortar ones.
In the past, I’ve recommended Smarty Pig, Discover Savings, and most recently, TIAA-Direct. Unfortunately, I’ve abandoned all throughout my quest to earn at least 1% on my money, because inevitably, they’ve all dropped that promotional interest rate that drew me in initially. While that’s to be expected, some handled it better than others. In the case of Smarty Pig, I got an email letting me know of the new rate. Discover and TIAA-Direct chose to go about a bit more quietly. I understand the strategy completely; most customers won’t take the effort to check. Others don’t want the hassle for a paltry difference. When I worked in financial services, we knew that most customers wouldn’t move unless we could offer a rate of at least 50 basis points different than what they earned at their current provider. But still, I appreciate transparency.
That’s actually the reason I kept my money with TIAA-Direct, despite the fact that the promotional 1.25% interest rate was quickly (and quietly) slashed down to 1%, then .90%, and currently, to .75%. I guess my old employer was on to something with that basis point strategy, because .75% was the point I was ready to walk. Until they committed a major error that didn’t just make me walk; it made me talk.
Here’s why I now consider TIAA-Direct to be guilty of all out banking fraud.
It all started in the wee hours of the morning on Friday July 19th with an email from Chase. “Your checking account is overdrawn.” Naturally, I panicked. Had I been stolen from? As it turns out, yes. From TIAA-Direct, who debited $5,000 from my checking account for deposit into my TIAA high yield savings account–without my permission. Having first assumed the issue was a Chase error, I started there. They assured me that the transaction was all TIAA-Direct’s error, and provided me with a trace number to prove as much to TIAA-Direct.
Onto TIAA-Direct. The conversation started out as expected. They tried first to blame me. Then Chase. Armed with my trace number, however, the guilty party was clear. That’s when the conversation became interesting.
My rep “Oscar” (he must be the “Madonna” of TIAA-Direct because he declined to provide a last name, assuring me he was the only Oscar there), asked about a few dates of recent transactions. Upon hearing that I had a few transfers coming out of the TIAA Direct account on July 15th, he let the dirty truth slip, and stated that the company had had a “glitch” in the system that Tuesday; I must have been one of the customers impacted. I can respect that accidents will happen. But today was Friday. When questioned why I wasn’t notified at the time the glitch was realized (or better, made it a priority to stop the unauthorized transaction, which didn’t happen until Friday) my friend Oscar X stated simply that they weren’t sure who was impacted, and had to wait to hear from the customers to amend the situation. (So you’re not sure which transactions are actually authorized, but you’re a trust managing billions of dollars in assets)?
The next piece of news was even better. My issue would be addressed in 24-48 hours. Well today is Friday so I’ll assume that actually means they won’t even start to investigate until Monday. In the meantime, my Chase account is overdrawn, and it’s up to me to float the difference. Can’t we expedite this, I pressed? Nope. But Oscar assured me he’d put a note of the “urgency” in my record (in getting my own money back, mind you). When asked the name of his manager, the conversation got really amusing.
Oscar:”We have a lot of senior leadership, I can’t really point you to one person.”
Me: “Well certainly someone hired you, issues your paycheck. Who is that person?”
Oscar: “We have a lot of managers. I can’t tell you.”
Me: “Okay. Who is your call center manager?”
Oscar: “I’m sorry ma’am, someone will respond to your ticket. I can’t tell you.”
Me: “Then who do you call when you’re sick and can’t come in to work one day?”
Oscar: “I can’t tell you that.”
Me: “Okay, well you let me tell you that I am a personal finance writer and this issue will be made public. Is there anyone who would like to comment?”
Oscar: “I can’t tell you that.”
Now, I know that Oscar is just the messenger here, but what we have is a company who is clearly unethical. You put employees on the front line who aren’t authorized to handle issues, and you hide from the issues you do have. (Until those front line employees you don’t empower spill the beans about this “glitch”).
At present, I’m waiting to figure out when TIAA-Direct wants to give me my money back, and in the mean time, my account remains open because I can only imagine where my money will disappear to if I close it now.
I know that everyone out there has a story about a bad experience with a bank. I’m not under the impression that I’m special. I’m also not one of those “down with Wall Street” types; I worked in financial services for years, and continue to write for many financial clients because truthfully, I love the industry, and believe in the opportunities it provides people.
But let’s face it, there is a lesson to be learned, that may be one of the most valuable financial moves you make: Consider more than rate when you work with an online bank, and do your research.
After this experience, I spent more time researching TIAA Direct than I ever did before handing over several thousands of dollars to them on blind trust. My costly mistake. In that research, I came across some pretty scathing reviews of TIAA Direct on BankTracker that would have made me think twice about even leaping on that 1.25% rate, had I known. For the record, I also Tweeted my experience directly to TIAA @TC_Talks. Their generic response (also mentioned by many on the BankTracker review): “Providing excellent customer service matters to us. DM us your full name and best way to contact you, so we can help.” I sent this very story to them, and DM’d them with my phone number to call if they can make things right. So far, nothing. Let’s hope those teachers who have trusted their retirement to TIAA-CREF have a much better experience.
