Monday, February 13, 2012

Scotia Bank wants dumb customers,

.. they are more profitable.
March 1st Scotiabank puts up chequing account and other fees. The simplest account – a personal chequing account, used by millions of Canadians, goes up to $5.95 from $3.95. Two bucks. That’s 33% increase in fees on your personal chequing account.
Suppose Scotiabnk has 10 million customers across Canada. They ask for $2 more from each person and they get $20 million per month, or $240,000,000 per year – a quarter of a Billion dollars just added to their bottom line. They didn’t have to do a thing to earn it. They aren’t giving any new services for that. They just asked every personal account customer for another $2. It’s that simple.

Now, you can imagine some people may move their accounts to another institution, one that offers no-fee chequing say. Those will be the smart people, who read the notice included in their statement, who realize they just got dinged another $24 per year for nothing. Does the bank care? No. Those smart people were probably their most troublesome customers anyway. If they were also valuable customers, with large debts (interest paying, say) then the bank would probably waive their personal chequing account fees if they asked. If they weren’t profitable customers, then good riddance to them. This is called culling the herd. Raise the fees, get rid of the smart, troublesome customers. Keep the dumb profitable ones.

Scotiabank wants dumb, profitable customers. They want people who don’t make demands, ask awkward questions, like “Why should I pay an additional $24 per year for my personal chequing account anyway? I put my paycheques into it, you don’t give me any interest on that money, yet you get to use it to loan to other people and earn interest, but I don’t get any of that. I just pay fees. Why is that anyway?”

“Good-bye, nice knowing you,” is the bank’s unspoken response. “See ya, wouldn’t want to be ya.”

Also, the fee for using your debit card more than the allowed number of times each month goes up from $0.65 to $1 – that’s right 35%. Of course, you don’t get any additional services for that; it is just profit added to the bank’s bottom line. Thanks, sucker.

Insidiously, Scotiabank has waived debit fees for students under 19 years of age. Why is that I wonder? Could it be to train the youngsters into exclusive use of their debit cards so that when they hit adulthood, they will choose a monthly fee plan instead of cutting back on the use of the debit card?

You see banks don’t want us to use cash. They charge current account holders for depositing cash. That’s right. If you are a business, say, a clothing store, or a photocopy shop, Scotiabank charges you a fee for depositing cash. They say it costs them to ship all that paper to the central clearing house. How troublesome it must be for them. They actually have to count the money people give them for safekeeping. It’s much cheaper to let the computer count the transactions. Better yet, if we can train people when they are young to use a debit card for everything, then when they grow up they won’t want cash anyway, spoils the line of your jeans you know. Then we can ding them a monthly fee to use that debit card and raise it every once in a while. In time we can bleed them dry and they won’t even notice. Remember that story about the frog in the pot of boiling water?

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