Tag Archives: ING

Goodbye ING

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Last month, Scotiabank purchased the on line bank ING Direct Canada for $3.1 billion. This un-bank as they called themselves started in 1997 and grew to 1.8 million customers through great savings rates, which were often double that of the big banks, competitive mortgage rates, and a lot of innovation.

Around the world our six Canadian no-service big banks are knows as being rather conservative. In some ways that was a blessing in the banking meltdown, but they’re also turtles in any innovation and modernization. Recently we talked about the technology that lets you just scan a cheque on your smart phone and have it instantly show up in your account. No need to head to the bank, just scan and done. Well, two of the banks had never heard of this when I contacted them. I guess they don’t watch TV as almost every US bank now has this in place already.

ING was instrumental in getting all North American banks to focus on on-line banking, customer service and the likes, or they still wouldn’t have much of it. Two of the biggest changes caused by ING’s success are just rolling out: Paypal, which everyone under age 30 is familiar with, is teaming up with Discover to become a bank. Plus, Amex and Wal Mart are in a joint partnership and will offer banking to the 40 million Americans who do not have any bank accounts. They’ll be able to get a pre-paid debit card, actual cheques, and be able to do all their transactions at any cashier in any Wal Mart. No fees, no overdrafts, no minimum balances – and it all started with ING leading the way.

Now our Canadian banks can slow down again, because one of them took out ING. Scotia won’t be continuing their operation and ING will disappear. Hopefully, if you were one of their customers, you’ll switch over to President’s Choice. Unfortunately it’s one of the only on-line banks left, even though they’re owned by CIBC.

Competition is great for us consumers. Unfortunately, another one bites the dust, and we’re all going to be worse off as a result. Scotia is betting they can retain most of these 1.8 million customers. But with all the banks, you have to remember that your loyalty will never ever be rewarded. The longer you deal with them, the more you’ll be taken for granted.

But the last thing we do is to shop around for a better rate, much lower service charges, or a place where it doesn’t take an appointment two days from now to see someone.

As Consumers: We’ve Got the Power

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I often get e-mails and feedback from people frustrated with bad service, high rates, or rip-off fees.

But you have to believe that you and me as customers really do have the ultimate power. We often feel there’s nothing we can do about fees, charges, interest rates, or really bad customer service. But that’s not true at all. You have total power to fire any company you choose, and that’s the best and ultimate power of all.

One of the most powerful stories, which is now being heard around the world, is of a Halifax musician. I can relate to this story and my personal horror stories with this company. It’s from a musician by the name of Dave Carroll.

Dave flew on a United Airlines flight out of Halifax. When he got his guitar from checked baggage, it was damaged. He filed a report, and did what he was told to do. But United told him: too bad – they were not covering the damage to his guitar.

Well, Dave wasn’t done – AND he’s a musician. He proceeded to actually write a song called: United breaks guitars. But get this: He posted his song on You Tube (here is the link: http://www.youtube.com/watch?v=5YGc4zOqozo&feature=fvst ). So far, this video has been viewed more than FIVE MILLION TIMES.

At about two million views, United had a change of heart and contacted Dave to pay for a new guitar. Too late, Dave told them – it’s been two years, but did tell them they could donate the money to charity.

Another Canadian story is a web site on twitter where Canadians can vent their frustration at banks and their service, fees, or the likes, or just give others a heads-up on some bad practices. It’s been set up by ING Direct, the 7th largest company in the world, and a great alternative to the no-service banks, in addition to credit unions.

Sadly, ING takes out the specific bank, because they do not want to appear to be one bank knocking another. But all the information is there, ranging from a petition to venting and a number of polls. You can access it at: www.fairfees.ca

The Financial Times of London did an extensive survey asking who we actually trust. And for 92% of us it’s word of mouth from friends, associates, or colleagues. That compares to around 60% for traditional advertising.

The lesson is that a companies’ image is not what they it is, but what real people experience in the real world and spread through word of mouth.

What Just Happened This Week?

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Wow – it’s only Wednesday and what a week it’s been in the financial markets.

Monday the world markets dropped enough to wipe out $5 trillion in wealth while the US markets were closed and Tuesday morning the US Federal Reserve dropped rates three quarters of a point.

Here in Canada they came down a quarter of a point that the banks did pass on, but there had been rumours that the no service mega banks were considering not lowering the prime rate.

While it was only a rumor that started back in December, there is no way to buy this kind of bad publicity is there? And how great that a number of media outlets, starting with columnist Greg Weston, brought this to the attention of the world.

The logic was that banks wouldn’t pass on the one-quarter point rate reduction to offset some of their rising expenses and that would include the billions of dollars some of them have lost in their subprime mortgage portfolio.

When the prime rate changes, it affects two-thirds of our borrowing costs, either directly or indirectly, for consumers and businesses. A lower rate is the Bank of Canada wanting to impact the economy, manufacturing, consumer spending and the dollar.

How dare the banks consider not moving down the prime at the same time? Isn’t it enough to keep charging us more and more interest, less and less competition and more service charges everywhere? Am I just cynical or are we supposed to cover some of their paper losses?

Just having this idea floated is another big reason to allow more competition in the banking field. In the U.S. there are about 3,000 financial institutions waking up each morning figuring out ways to bankrupt each other – that’s competition. Not the five we’ve got who want to merge into two or three.

But there’s good news in hearing banks might not change the rates. Because when we get mad – we get moving and there are alternatives for your financial needs:

For savings: ING right now is at 3.75%

For loans & mortgages: Credit unions are at or below the mega no service banks’ rates, are locally owned and run AND you’re a shareholder so you’ll get a large refund at the end of the year.

For RRSPs: Mine are with Primerica Financial. Many of their mutual funds have way better returns – and there are lots of other no-load no fee places to comparison shop.

Maybe this is another reminder to get informed because knowledge really is power and to remember to always always comparison shop. There are options and a lot of ways you can save interest and money.