The challenge of transferring automatic payments, among other factors, keeps many consumers from switching banks, despite being unhappy with the service, according to a recent Consumer Reports survey.
About one in five consumers with checking accounts considered switching to a new financial institution over the past 12 months, according to our national survey. Consumers wanted to change banks largely due to increased fees for routine services. Of those consumers who considered switching banks, over half said they were hindered from doing so. Survey respondents were allowed to cite multiple reasons for why they didn't switch.
Among the top responses:
- 63 percent said that concerns about the trouble it would take to transfer all their automatic payments and deposits to a new account kept them from switching banks.
- 37 percent indicated that the process would take too much time and effort to complete.
- 28 percent said they didn't want to pay any fees to transfer their own money.
Earlier today, we asked our Facebook readers if they had considered switching banks but stayed despite being unhappy, and if so why. Overwhelmingly, the results mirrored our national survey. People said they stayed because it was too much trouble to transfer automatic payments and deposits, with 122 out of 150 votes. To see our poll, plus some of the other reasons people gave for staying with their bank visit our Facebook page.
"Unfair bank practices and rising fees are prompting more and more consumers to consider voting with their feet and taking their money to another bank or credit union," says Suzanne Martindale, staff attorney for Consumers Union, the advocacy arm of Consumer Reports. "But many consumers don't follow through because moving your money takes a lot of time and money and some bank policies make it harder than it should be. We need to make it easier for consumers to switch banks so they have a real choice when it comes to where to keep their money."
Consumers Union has called on Congress and the Consumer Financial Protection Bureau to consider a number of reforms that would make it easier for consumers to move their money and increase competition among banks.
For more about the changing landscape of banking, including escalating fees and why this is happening read More fees are coming. How to fight back-or flee.