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NetBank, CompuBank
merge; customers get squashed
By Holden
Lewis • Bankrate.com
The merger of two prominent online
banks has cast some customers into financial limbo.
Some former account holders of CompuBank lost access
to their money on May 12, when NetBank took over all of CompuBank's
accounts and suspended some of them. The affected account holders
say that, without warning, their debit cards stopped working, they
couldn't log onto the NetBank site to review their account status
and they couldn't get satisfaction from NetBank's overwhelmed customer
service department.
No one outside the company seems to know how many
account holders are affected. The Atlanta Journal and Constitution
quoted NetBank's CEO as saying that the problem affected 100 of
the 55,000 former CompuBank accounts. But one account holder says
a NetBank staffer told him that the number of problem accounts was
8,000.
A NetBank spokeswoman says the 8,000 figure "is
certainly not accurate," but says she doesn't know how many
accounts were affected.
Spokeswoman Eve McDowell stresses that most accounts
transferred without a problem, and "with a conversion of that
size, there were some accounts that needed follow-up." She
says NetBank tried to contact account holders by mail, e-mail and
through its BankMail messaging system.
"Because we were buying accounts from CompuBank,
while it would have been ideal to get the most current address and
e-mail address from CompuBank, it wasn't always possible,"
McDowell says. The Web sites of both banks were updated frequently
to let account holders know what was happening, she adds.
She says call volume to the customer service lines
are back to normal.
Complete cutoff
The majority of CompuBank accounts were transformed without problem
into NetBank accounts. But when the transition didn't go smoothly,
the problems were doozies:
- Customers paying with debit cards were rejected
at stores and restaurants;
- The debit cards didn't work at ATMs, either, leaving
some people broke;
- Online bill payment apparently stopped working;
- So did automatic debits;
- Callers to the customer service phone lines typically
waited on hold for 45 minutes, only to be transferred to the security
department, where instead of talking to a person they got a voice-mail
message telling them to leave their name and Social Security number;
- CompuBank was an online-only bank that didn't send
out monthly statements, so affected customers can't review their
account activity unless they had the foresight to print out CompuBank
Web pages before May 12.
- Perhaps most galling, the people who lost access
to their accounts on May 12 say they received warning letters
no earlier than May 14. The letters, dated April 30, notified
these account holders that they needed to straighten out problems
with their accounts.
You read that right: On May 14, customers began receiving
letters, dated April 30, that told them to call CompuBank -- and
the number given went out of service on May 12. Customers who called
the number were instructed to hang up and call NetBank's customer
service number, which had 45-minute waits.
Before the merger, NetBank had 162,000 accounts,
more than any other Internet-only bank. Only a small fraction of
Americans have tried online banking, and fears about safety, security
and customer service keep many people from testing Net banking.
Those fears have been realized for former CompuBank customers cut
off from their money. A customer in New York says he had to scrounge
change from friends so he could do his laundry. A customer in Washington
state worries that she might not get her dream house.
Never again
Shelley Norbeck and her husband, Martin Lindhe, are buying
a house from friends who are buying another house. Both sales will
fall through if Norbeck and Lindhe can't close by the end of May.
The money to pay their closing costs and points -- about $6,000
-- was in their CompuBank account. Now they don't know where their
money is and if they'll be able to get to it by closing day.
"It's like a big food chain that's affected here,"
Norbeck says.
They needed a bank statement showing that they have
enough in their account to pay closing costs. Her husband tried
to log onto the CompuBank account over the weekend of May 12, but
couldn't.
"We thought, 'OK, maybe it's
just something down,'" Norbeck says. "Monday rolls around
and my husband tries to buy a sandwich on his CompuBank card."
It was declined.
On Tuesday -- May 15 -- they received a letter from
NetBank, saying that the transfer of CompuBank accounts depends
on NetBank's standard approval criteria: "We have placed your
account on administrative hold status as the current activity in
the account appears to be inconsistent with past experience,"
the letter reads.
She called NetBank several times over the next few
days, placing the phone on speakerphone mode and working while she
was on hold. The customer service people were polite but didn't
have the authority to help. She left her name and Social Security
number on a voice-mail in the security department and waited in
vain for a call back.
Most people might hesitate to leave their Social
Security number on a voice-mail, but lots of former CompuBank customers
did because they felt desperate.
"We were just completely stressed out,"
Norbeck says. "It's not only embarrassing; it's devastating.
At this point they could decide to sell the house to somebody else."
She says she couldn't sleep and she had to ask her
mother to take care of her 7-month-old daughter.
She says the house in Issaquah, Wash., that she and
her husband plan to buy is "the house. The one we had been
dreaming about. It has Cat 5 wiring throughout the whole house.
It's not something we'd easily walk away from."
Cat 5 wiring is computer network cable that provides
industrial-strength broadband access. The house even has network
connectivity in the bathrooms. Such an infrastructure is important
to Norbeck and Lindhe, who make much of their living online.
In fact, they had a CompuBank account because of
e-commerce. Lindhe, a musician who plays under the nom-de-keyboard
Bassic, made thousands of dollars last year via MP3.com. The music
Web site gave musicians the options of being paid by check (which
could take weeks) or by electronic deposit to a CompuBank account.
They chose to open a CompuBank account so they could get the money
more quickly.
She faxed a complaint to the Office of Thrift Supervision,
which declined to comment about NetBank. She says she might have
to borrow the closing costs from her father, which would embarrass
her.
"Yeah, dad, Internet banking is great!"
she ruefully recalls telling him.
"I'm never going to bank online again,"
she says.
Gold and bones
Others lament likewise. Steve Dau, of New York City, says he called
NetBank's receptionist instead of the customer service number and
begged her to connect him to a live person, poignantly telling her
that he was broke and had to eat. After days of trying, he finally
got a call from someone in the security department who said the
hold had been taken off his account.
When Dau tested that assertion, he discovered that
he still couldn't log onto his account. Some bills were supposed
to be paid automatically through CompuBank, "and I have no
idea if those bills have been paid."
His employer told him that his direct deposit went
through, but he hasn't been able to confirm with the bank whether
it has credited him with the deposit."
On top of all that, his girlfriend had an account
with CompuBank and the transition went as smoothly as a Bing Crosby
tune.
"She rubs it in a little bit," he says.
Although his girlfriend had no problems, Dau plans
to bank elsewhere unless NetBank "has a major, major turnaround
in customer service."
Customer William Ifrah wanted to share his frustration,
so he started a Yahoo
bulletin board for CompuBank customers who had trouble with
the transition to NetBank.
David Bancroft of Archer, Fla., says, "It's
quite a screwing they put to many of their customers, and it's not
just me, judging by the information I got on the phone from the
CSRs (customer service representatives) who were disgusted."
Bancroft says he punched random numbers into NetBank's
voice-mail system and reached an employee on Monday who told him
that the problem affected 8,000 customers.
Bancroft didn't know his CompuBank account had been
suspended when he tried to transfer money into it from PayPal, an
online-payment service. That raised the fraud flag at PayPal, which
will lock Bancroft's account May 25 unless it receives an explanatory
letter from CompuBank. That's not going to happen, and Bancroft
can't get hold of anyone at NetBank to settle the matter with PayPal.
Then, late Thursday, Bancroft got another bit of
bad news. He received a voice-mail message from NetBank, telling
him that he didn't meet the criteria for being a customer and that
he would receive a check equaling his final balance in seven to
10 days.
His account featured PayPal transfers, automatic
debits and online bill payments, and since he no longer has an account,
he can't check an online statement to find out which transfers and
payments cleared and which didn't. When he finally gets a check
from NetBank, he won't know if it's for the right amount. He doesn't
expect to get an explanation why he didn't meet the criteria for
being a customer.
His experience with online banking makes him wonder
if the money system should return to a simpler time: "I think
we should go back to teeth and gold nuggets."
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