I thought Bank of America's five-dollar debit card fee was a horrible PR move and spoke about it in two posts - Bank of America Headlines: Let the PR Crisis Begin and Who is Dumber? Bank of America, NetFlix or Bell Canada?
The Los Angeles times ran an article on this topic and it looks like BoA's fee is moving from bad headlines to negative customer reaction.
Some interesting quotes from the article:
In Los Angeles, police arrested 11 protesters who marched into a BofA branch Thursday and refused to leave after trying to cash a giant check for $673 billion made out to the "People of California." Protesters continued their efforts Friday with a march through downtown L.A.
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"This frankly is just an incredible marketing and PR debacle," said Bert Ely, an independent banking analyst. "They roll this thing out with no testing, make it nationwide, it's higher than anybody else. What kind of reaction do they expect?"
In addition, Senator Dick Durbin called on Americans to leave Bank of America.
“Bank of America customers, vote with your feet, get the heck out of that bank,” Durbin said on the Senate floor. “Find yourself a bank or credit union that won’t gouge you for $5 a month and still will give you a debit card that you can use every single day. What Bank of America has done is an outrage.”
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On the Occupy Wall Street front they have launched a 'Bank Transfer Day' - a campaign slated for Nov 5/6, urging Americans to transfer their money from the large banks and move it to credit unions. Apparently 14,000 people have RSVP'd, indicating that they will be making the transfer.
On the stock front, BoA is down 11 per cent in just one month, although it's unclear just how much (if any) of that is due to the fee hike given all the banks have been struggling in recent months. Although, BoA is down much more than its counterparts (most banks are down between one and six per cent for the month). Yet again though, this could simply be due to a larger beta (degree to which its stock moves in relation to market movements) that BoA has.
Either way, BoA looks like it has some choppy waters ahead of it. Best case scenario, this blows over soon and they simply walk away with a weaker brand than they already have. Worse case scenario, this continues to grow as a crisis and the protest of their $5 fee actually leads to a run on the bank.
I suspect if customers actually start to leave in droves BoA will simply revoke the fee. I know a few years ago up here in Canada, TD once implemented a fee for something that was free. Customers swamped them with complaints and they quickly reversed their position.
There's plenty of noise out there, so BoA might be able to sneak off into the bankground on this, but I'd say it's 50/50 at this point. This silly little $5 fee could become one of the defining moments that fuels the protest against Wall Street further.
Some interesting quotes from the article:
In Los Angeles, police arrested 11 protesters who marched into a BofA branch Thursday and refused to leave after trying to cash a giant check for $673 billion made out to the "People of California." Protesters continued their efforts Friday with a march through downtown L.A.
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"This frankly is just an incredible marketing and PR debacle," said Bert Ely, an independent banking analyst. "They roll this thing out with no testing, make it nationwide, it's higher than anybody else. What kind of reaction do they expect?"
“Bank of America customers, vote with your feet, get the heck out of that bank,” Durbin said on the Senate floor. “Find yourself a bank or credit union that won’t gouge you for $5 a month and still will give you a debit card that you can use every single day. What Bank of America has done is an outrage.”
------
On the Occupy Wall Street front they have launched a 'Bank Transfer Day' - a campaign slated for Nov 5/6, urging Americans to transfer their money from the large banks and move it to credit unions. Apparently 14,000 people have RSVP'd, indicating that they will be making the transfer.
Either way, BoA looks like it has some choppy waters ahead of it. Best case scenario, this blows over soon and they simply walk away with a weaker brand than they already have. Worse case scenario, this continues to grow as a crisis and the protest of their $5 fee actually leads to a run on the bank.
I suspect if customers actually start to leave in droves BoA will simply revoke the fee. I know a few years ago up here in Canada, TD once implemented a fee for something that was free. Customers swamped them with complaints and they quickly reversed their position.
There's plenty of noise out there, so BoA might be able to sneak off into the bankground on this, but I'd say it's 50/50 at this point. This silly little $5 fee could become one of the defining moments that fuels the protest against Wall Street further.
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