Nov 11

Bank of America marketing: how to lose customers on a grand scale

By Alex Neihaus Consumer Outrage, Politics No Comments »

embarrassed

Well, growing a business ethically continues to defy Bank of America. First, it duped shareholders by concealing girnormous losses at Merrill-Lynch last year — then it agreed to paying ML’s brokers astronomical bonuses, all apparently in exchange for an extra $50B in TARP funding.

Next, it pissed off a Federal judge who wouldn’t let BofA off the hook for the ML debacle. The judge simply refused to approve a sweetheart settlement.

Now, its CEO is leaving early…much to the relief of taxpayers, shareholders and John Thain (who’s looking for a new office to redecorate for millions of dollars). And, worst of all from BofA’s perspective, slamming credit card customers is going to be much harder next year because Congress passed new, long-overdue credit card regulations.

So, I guess it’s no surprise that BofA’s marketing is as ham-handed and tin-eared as the rest of the company. Consider this: the well-known WalletBlog has taken Bank of America to task for misleading customers and congressmen on credit card charges. First, Bank of America said it wouldn’t increase fees; then it announced it will. When WalletBlog pointed this out, they got a call from BofA corporate communications, trying to explain how a fee increase isn’t a fee increase by using Clintonesque parsing of words like “pricing.”

OK, so I don’t begrudge a PR type arguing strict meanings with bloggers; they have lawyers who can assure them that the plain meaning of their promise to not raise fees — what normal people understand — doesn’t count…that it’s OK to write a letter to legislators that sounds like a commitment, then decide to do what they really want to: fleece people.

But what shows how completely off the planet BofA is…how tin-eared they are…is their request to WalletBlog to lay off:

Naturally, at the end of our call, Bank of America asked that we stop circulating our blog post from last week. But we’re going to hold off on that until they provide the public with some clearer answers. The more digging we do, the more it seems like Bank of America should be taken to task. And it’s possible that we’ve just cracked the surface.

Anyone with half a day’s experience in press relations knows you never ask a writer, blogger or journalist to retract a story in the absence of factual errors. It’s guaranteed to produce exactly what this did: a mention of your arrogance along with an enhanced determination to keep the story going.

Would BofA have asked the Wall Street Journal to recall copies of the paper with a story it didn’t like? How about asking MSNBC to stop talking about a story like this? No…it’s only because the fool who called WalletBlog thinks less of new media — that it can be more easily controlled — that he or she asked WalletBlog to quash the story. It’s emblematic of problems not just in the risk management side of BofA, but throughout the entire bank.

My message to the WalletBlog: keep it up and don’t ever consider retracting something because some corp comm hack who thinks you’re unimportant asks you to leave them alone.

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Oct 07

Choose one: New FTC blog post guidelines a) protect you b) kill free speech

By Alex Neihaus Consumer Outrage, General musings, Politics No Comments »

shillwarning

Well, this is one of those times when the government acts and you get to chose your reaction. On the one hand, the emergence of the ‘net as the definitive source of reviews for everything from software to celery has become a bonanza for the shills of the world who review products for filthy lucre and who pretend or obscure that they’ve been bought.

On the other hand, while advertising isn’t a protected form of free speech, it’s sad that we need government intervention limiting speech to prevent these people from preying on grandma’s Google search for cookie dough.

Into this fray steps the FTC with new rules to take effect in December, 2009. (I’ve attached a PDF of the new rules to this post for your convenience.)

You can see the rules struggling to keep up with new and social media. That, in itself, is an interesting commentary on how technological innovation always outstrips government’s ability to keep pace, much less anticipate the impact of technological change. Consider this heavily parsed defintiion from the rules:

An advertiser’s lack of control over the specific statement made via these new forms of consumer-generated media would not automatically disqualify that statement from being deemed an “endorsement” within the meaning of the Guides….Thus, a consumer who purchases a product with his or her own money and praises it on a personal blog or on an electronic message board will not be deemed to be providing an endorsement.

In contrast, postings by a blogger who is paid to speak about an advertiser’s product will be covered by the Guides, regardless of whether the blogger is paid directly by the marketer itself or by a third party on behalf of the marketer.

…For example, a blogger could receive merchandise from a marketer with a request to review it, but with no compensation paid other than the value of the product itself. In this situation, whether or not any positive statement the blogger posts would be deemed an “endorsement” within the meaning of the Guides would depend on, among other things, the value of that product, and on whether the blogger routinely receives such requests.

You all clear on that now?

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Aug 17

Charles Schwab’s lies are (finally) gonna land it in court

By Alex Neihaus Charles Schwab, Consumer Outrage 1 Comment »

lies

It felt so good to unload two weeks ago on Charles Schwab for lying about the safety and liquidity of auction-rate securities they sold me. Blogging as catharsis is underrated, especially if you have as much tied up as I do in these now illiquid ARSs. As I pointed out in my previous post, just about every other firm else has settled, but not Schwab. No, they blame everyone else — the underwriters, the customers and, now, even the New York attorney general.

Today, the big news is that the New York State Attorney General is making good on the threat to file suit. This welcome but not-unexpected turn of events gives me not only another chance to vent against Schwab, but also for the first time to document that I wasn’t the only customer they lied to.

Today, the Wall Street Journal has published excerpts of what the lies the brokers told customers. Check out some of what they told people:

Customer from Massapequa, N.Y. Customer: “You know, I’m not trying to make a ton of money. I just want to play it safe.”
Broker: “Understood.” …
Broker: “When you go to get out of this, even though you tell the rep sell it that means you want to stop the auction. The hardest part of this auction is getting into it. That is the tough part. Getting out of it is easy as just selling.”

Customer from Seaford, N.Y. Customer: “I can just get out every 7 days?”
Broker: “That’s right.”
Customer: “I can just give you 7 days and don’t renew and you put the money back in my account?”
Broker: “That’s correct.”

Customer from Remsenburg, N.Y. Customer: “It is some kind of short term muni-based piece of paper used as an alternative to [a] money market.”.
Customer: “So that is better than what I am getting?”
Broker: “Yeah, yeah. It is better than saving in the money market at the moment.”
Broker: “You pick up about 50 to 60 basis points over what you would get in a money market, and what you are giving up is next day liquidity.
Customer: “OK. I can adjust it by $100k amounts every week?”
Broker: “In terms of if you wanna get out?”
Customer: “Yeah.”
Broker: “Yeah.”
Customer: “I’ll know a week ahead of time if I wanna make a big investment.”

Customer from New Hyde Park, N.Y.
Broker: “And it’ll roll over monthly unless you call me and say, ‘Hey [Broker], don’t roll it over anymore.’”
Customer: “Oh, I see. OK.”
Broker: “And then next month I’ll stop the auction and all the cash will come back to your account.”
Customer: “OK, [Broker], thank you.”

Customer — location unidentified Customer: “Well I need the liquidity because I may buy a house soon.
Broker: “I see.”
Customer: “I sold my house and this is money that’s just there temporarily.”
Broker: “instead of looking for the highest yield, I would personally look at the highest security. And that would be my second thing. And probably periodic auction rate securities. That would work better than any bond mutual funds for you. That’s my humble opinion.”
Customer: “OK. And it would be safer?”
Broker: “It would be much, much safer, for sure.”

Assurances like these are what lead me to invest money. Schwab brokers delivered these same lies to me.

What’s Schwab’s response to this news? Well, they issued a press release this morning, saying, in essence, “Not our fault…not our problem…all those customers we talked to about safety and liquidity can schove it. We ain’t schettleing.”

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Jul 22

zug.com turns it up to 11 on Verizon over privacy

By Alex Neihaus Consumer Outrage, General musings 1 Comment »

Remember the original Spinal Tap movie in which the amplifiers go to 11? Voila! Instant meme.

turn the volume up to 11

Well, I’ve just read a blog post from zug.com called “The Verizon Prank” in which John Hargrave risks big dogs and angry neighbors to make a point I wish more people were concerned about: lax privacy controls. Maybe we have the beginning of a new meme: Hargrave standing outside Verizon’s CEO’s home with the amp on 11 yelling, “Can you hear me NOW??”

My kids often ask why I object to signing pin pads at checkout lines. Simple, I tell them. Would you like to have your signature digitized and placed on orders for everything from stocks to cellphones? Wouldn’t care for that, they say.

But that fuzzy “privacy stuff” is protected, they protest. We live in public on Facebook and Twitter (and I don’t?)…we don’t worry about privacy.

The upbrading from my kids helps the confused cashier who thinks I am a nut and who can’t restart the transaction…yes, the pimply dude will say, your kid is right. Trust [TJMaxx, Wal-Mart, Exxon, Sears, L.L. Bean, the corner spa, the library] to protect your information. Like your lovely daughter there (lascivious glances at my tender young kids!), I trust [Gulf Oil, Toyota, AT&T, Verizon, T-Mobile, Charles Schwab, the IRS] with anything they want to store about me.

Not me. I remain very skeptical. And, after you finish laughing your ass off at this video, you should become more skeptical, too.

Jun 16

Get a Grip on Miracle Wipe

By Alex Neihaus Consumer Outrage 3 Comments »

Do you crunch? Or fold?

After over three years of blogging, I am officially nonplussed.

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Apr 26

The two best choices for the worst company in America

By Alex Neihaus Consumer Outrage 1 Comment »

ticketmaster_no_full

 

I just love The Consumerist blog. It’s snarky, fun and to-the-point. But it worried me no end when Consumer Reports bought it. You know, the people who have the temerity to “accept no advertising” but who continue to sell useless “car price information.” These are the people who hawk their magazine shamelessly while being among the very few magazines or newspapers left in the world that do not publish their editorial contacts’ email addresses. CR is happy to tell you what to do. Just don’t bother trying to contact them or, perish the thought, criticize them in any way. (Just ask Bose about that.)

So, when they bought a blog that actually understood the concept of community, I was scared that we’d start seeing the monthly preaching and supercilious editorial content (right next to ads for CR’s overpriced “gift annuity”) that I’ve loved-hated  in the magazine since I was 12. After all, their blogs on consumerreports.org mirror perfectly the printed book’s preachy, holier-than-thou tone. If this was their idea of gettin’ jiggy with the ‘Net, I wasn’t buying it. I thought The Consumerist  would instantly become The Bloviatist.

But I was wrong.

Proof? You say you want proof? Just follow this link. The Consumerist is holding a public vote for the worst company in America. And the two contestants are Citibank and Ticketmaster.  No question for me there. Ticketmaster is the extortionist of the entertainment industry. Their business practices should be legal only in Tehran.

It’s not like it wasn’t close. Tomorrow — April 27, 2009 — is “Alex’s Freedom from Citibank Day.” It’s the day my last CD matures with these…uh…”bankers.” It’s the day that, if my 15 written and phoned requests, blood and DNA samples do the trick, Citibank will cut me a check for my money and mail it to me because that’s the only way they can get it to me. That, despite the fact they were able to transfer the money into the account to buy the CD. It’s the Bank of Kafka — your money goes in…government money goes in…and Gregor Samsa comes out.

But, given that Tickermaster charges a “convenience fee” for what can only be convenient for their bottom line, it’s nolo contendere for my vote. As I wrote this, it was Ticketmaster taking the “prize” 70% to 30%. Go vote…for Ticketmaster. Then, tomorrow, call Citibank and close your accounts there (if you can).

Good on, ya, Consumerist. I hope CR continues to let you live.

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Feb 21

American Express to customers: Forget do-not-call; we’ll call you anytime we like

By Alex Neihaus Consumer Outrage 1 Comment »

American Express tells customers to forget about the do-not-all lists

When you get a credit card statement, do you ever read all the legalese on the back of the pages with the I-owe-a-fortune-amounts? I’ll bet many people don’t, despite the imploring of many consumer advocates.

Consumer Reports, in particular, practically harangues readers to be aware of the ability of credit card companies to change terms and conditions as they wish.

So, when I got a 12-page statement from American Express this month full of amendments to the credit card agreement, I decided to give it a read. One thing stuck out, in a section entitled “Telephone Communications.” Check out what I am agreeing to should I use the card after April 2, 2009 (all emphasis is mine):

You authorize us to call or send a text message to you at any number you give us or from which you call us, including mobile phones. You authorize us to make such calls using automatic telephone dialing systems for … offers of American Express products and services... You agree to pay any fees or charges you incur for incoming calls or text messages from us without reimbursement.

You can read the whole section in the PDF attached to this post. As I read it, American Express is saying:

  • The heck with Federal and state do-not-call lists. If you call them for any reason — say you are checking a charge — they get to call you back at that number for anything they like, including marketing purposes
  • If you make the mistake of calling them from your cell phone, you can expect them to call you back on the cell phone whenever they like. And you pay for the airtime. I know people have lots of minutes, but do you like burning them up while listening to a pitch for American Express’s latest high-cost credit product?

It’s pretty interesting how American Express has slipped the marketing permissions — a sort of default re-opt-in for people who have explicitly opted out — into the middle of a section ostensibly about security and account protection. While I don’t think anyone would object to getting a call about potential fraud, I, for one do not want American Express to feel free to call me on any number their ANI system sees me calling from. It’s bad enough that they use ANI to identify me when I call from home. (Did you realize that even if you have the phone company block outgoing Caller-ID for all your calls, an 800 number you dial still gets the number? After all, they’re paying for the call.)

What bothers me most about this is this is precisely the kind of thing that makes people really resent big companies. American Express wants to become a bank — get its piece of TARP. Then it wants to use loopholes to get around telemarking regulations and privacy opt-outs. Otherwise, how will they sell us checking accounts and CD’s?

No wonder there’s distrust of businesses…when you get your attorneys to slip something like this into an agreement, using “business logic” to rationalize it, you only put customers on the other side of a bright line…one they will pressure politicians to ensure business cannot cross.

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Jan 22

Are you feeling like you’ve been screwed, but can’t quite figure out how?

By Alex Neihaus Consumer Outrage, General musings, Politics 1 Comment »

insurance-companies-demonstrate-greed-once-again

Maybe it’s your health care insurer manipulating your out-of-network health care claim reimbursements to increase their profits.

Remember last fall when you signed up for the significantly more expensive plan that lets you choose a doctor out-of-network? You thought you were being smart.

Instead, it turns out you’re being screwed. Your extra premiums are finding their way into the pockets of the same insurer who buys TV ads with happy, young, healthy mothers and fathers in the park playing Upsie with their cute, giggling babies. Not a care in the world, presumably, because they’re covered…but it’s really a picture of ignorant bliss because when that baby needs a specialist, that couple’ll have to sell the Chevy and walk to appointments to pay the doctor’s bill.

Check out this report from the New York State Attorney General on how insurance companies are screwing their policyholders on out-of-network reimbursements. It’ll make you sick (just be damn sure you don’t go out-of-network to see a doctor).

For me, this is just another example of the unrestricted greed that nearly 30 years of Reaganism (“government is bad…unrestricted markets are good”) has generated and the incalculable damage it has done to our society. If a business can figure out a way to screw you — and better yet, legally do it in the dark like United Healthcare did with the cost database it uses to reimburse policyholders — well, that’s just normal, right?

Everywhere you look, we’ve been  cheated. Big Business is totally out-of-control. The financial system has collapsed — and taken our security with it. Even our ideals were trashed mercilessly by a government that lied to us all.

But, oh boy, watch out. This country has had mega-pendulum-political-swings in the past (the Progressive Era, the New Deal). If there are more people out there who think like me (and you bet there are), politicians had better get the message and get some stuff done (health care, re-regulation of the business and financial worlds, a sane foreign policy). And they better get it done now.

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