What's Wrong With This Bank?

My Paper dated 10 Mar 09 published this article titled "Investors wary of big elephant HSBC". Investors are worried about its US$62 billion in outstanding loans at its HSBC Finance arm in the US and rising provisions in its business in Britain.

I am also wary of this bank. You see, early last year, I bought 2 insurance policies from its insurance arm, HSBC Insurance as well as 2 investment products from the bank. The bank committed several blunders which I find hard to forgive of such an established bank.

1. Wrong Policy Document Delivered

When I received one of the policy documents in the post, I was surprised to find an extra policy document inside the envelope. It was a policy document of another person! Luckily, mine was on top with my name/address showing through the transparent envelope window. Hence my policy document was correctly delivered to me. I looked at the address of the other policyholder. Since it was very near to where I am staying, I did both the bank and the other policyholder a favour and delivered the document to the policyholder personally. I wonder if another person would bother to do the same to me if he/she was the one who had received my policy document wrongly?

2. Wrong Notifications Sent

Recently I received 2 letters from the bank. It informed me that "no coupon will be paid" for two products. Alright, that was hardly surprising in the current poor economic climate. However, I was puzzled because those were products which I never knew I invested in! Indeed, a few days later, a bank staff called to say that the notifications were wrongly sent to me. He said that the bank would be sending out another letter to tell me so. To date, I have not received the letter.


3. No Record Of My Insurance Premium Payment

On receiving the "Premium Due Notice" for one of the insurance policies, I paid the full annual premium promptly at the bank's Marine Parade Branch. The payment was made in 2 parts - one portion was in cash and the other portion was a transfer from my savings account. Yet one month later, I received a "Grace Period Expiration Notice" from the bank, as shown in the photo below. Also shown in the photo are the 2 over-the-counter receipts for my payments made to the bank on 31 Jan 2009. When I called the bank's consultant to clarify the matter, he requested me to fax the receipts to him. It was indeed fortunate that I had kept the receipts as proof. Just imagine what would have happened if I had not kept them? All other insurance companies I have dealt with so far always send me an official receipt soon after I have made payment, without I having to ask them for it. Besides, what's so difficult about issuing an official receipt? I strongly recommend that HSBC Insurance adopt the same practice so that its policyholders will have peace of mind, especially in these uncertain times.



4. Deduction Of Premium From Savings Account With No Prior Notification

For the other policy, payment of premium was by annual Giro deduction. However, the premium was deducted from my savings account without any prior notification. I would not have known of the deduction if I have not signed up for "sms notification" of my savings account transactions:


And you know what? I just found out that if I did not have enough funds in my account for the Giro deduction, the bank would impose a penalty for the failed Giro deduction. I think this is plain ridiculous. Other insurance companies like NTUC Income will always send me a "Giro deduction due" notification before a Giro deduction. Why can't HSBC do the same? Hello, even if I have enough money in my savings account, my funds could be for other more urgent purposes, okay? Is it too much for the policyholder to insist on a "Giro deduction due" reminder from HSBC Insurance, especially when the Giro deduction happens only a once-a-year and the policyholder might have forgotten that the payment is due?

5. No Official Receipts Issued For Premium Payments

I did not receive any official receipts for all my premium payments. When I complained to the consultant, the bank sent me only a partial receipt for the first policy. I just went to the bank again last Saturday to give them "constructive feedback" about their poor service level.

Now, if you experience what I had experienced with the HSBC Insurance, wouldn't you be wary of the bank too? Come on HSBC, haven't you heard of GEMS? No, not Go The Extra Mile for Service but Got Enough Minimum Standard? You really ought to pull up your socks with regards to your service level. I am but one really dissatisfied customer. I wonder how many more are there out there?

Update on 17 Mar 2009:

This evening, I found a letter from HSBC in my letterbox. At first, I thought that the bank was so efficient in resolving my problems. But no! It was a "Lapse Notice". Damn it!


I am willing to give up the policy, HSBC. But please refund my 2 years' worth of premiums paid, not a cent less!

Update on 19 Mar 2009:

I finally received the 2 receipts for one policy in the post. There was still no receipt for the Giro deduction for the other policy. There was no apology or even a covering letter to explain what went wrong. Come on HSBC, is it so hard to say sorry when you have made mistakes? And so many serious ones some more.

Tenor Singing A Different Tune

With reference to my last post about the use of the words "tenor" and "tenure" in an MAS/ABS pamphlet about home loans, I have received the following reply from MAS:

Dear Mr Koo

I refer to your email of 4 July 2007 to Stomp copied to MAS. We would like to clarify that we did not receive your earlier email.

2 We appreciate your interest in the ABS-MoneySENSE home loan guide. We used the term "loan tenor" in the guide as it is the more widely accepted term in the financial industry to describe the duration of a loan and other debt obligation. For instance, three financial dictionaries make reference to the term "tenor" instead of "tenure". The definition of "tenor" from the Barron's Dictionary of Banking Terms (third edition) is appended for your reference.

"Tenor:

(a) shorthand reference for maturity on a note or financial instrument.

(b) designates a time when a draft is payable: on sight (when presented), a given number of days after presentment, or a given number of days after the date of the draft.

(c) terms set for payment of a draft, i.e. when delivered (a sight draft) or at a future date (a time draft).

Tenure: This word is not found in the Barron's Dictionary of Banking Terms (third edition)."

3 We hope this has clarified your concerns. Thank you for your feedback.

Yours sincerely,

[Name removed to protect the innocent.]

Consumer Issues Division, MAS

[Telephone number removed to prevent MAD people from calling.]

So there you have it - the final verdict is that I was wrong and MAS was right after all. I apologise unreservedly to MAS for my ignorance and for making a joke out of the use of the word "tenor" in the pamphlet. I am very grateful to MAS for pointing out my mistake. I am so sorry for the error.

But hey, wait a minute... I googled "loan tenor" and found 809 hits on the web. However, when I googled "loan tenure", I found 18,200 hits instead, almost 22.5 times that of the former! Alright, "loan tenor" may be the "more widely accepted term in the financial industry" but it certainly doesn't appear to be so in the IT industry. Maybe those 18,200 webpages are written by lay persons and not by people in the banking industry.

Oh well, the professionals always have their own views of things. They also like to go by the book or shall I say "3 books" in this case, i.e. 3 financial dictionaries. (Ah, so that's how they got their 3 "tenors", haha.)

And they couldn't find the word "tenure" in the Barron's Dictionary Of Banking Terms? Hmm... maybe they should just junk it and look in the web instead?

The Loan That Makes You Moan And Groan

I always thought that banks are only interested in the 3M's, i.e. "Madly Making Money". I never knew that banks are actually also quite cultured because they are also passionate about another "M" word called "Music".

You see, on 15 June 2007, MoneySENSE and the Association of Banks in Singapore (ABS) jointly launched the guide “About Home Loans – Key Questions to Ask the Bank Before Taking a Home Loan” to educate home buyers on the various types of home loans available in the market and to prompt them to ask the bank the relevant questions before committing to a home loan.

When I read the on-line guide, I was surprised to see the word "tenor" being used not once or twice but a grand total of 34 times in phrases such as

"loan tenor"

"fixed tenor"

"entire tenor"

"remaining tenor"

"tenors" (3 of them - Luciano Pavarotti/Placido Domingo/Jose Carreras?)

"shorter tenor" (Jose Carreras?)

"longer tenor" (Tough fight between Luciano Pavarotti and Placido Domingo?)

The 34 "tenors" are also mentioned in the PDF version of the guide

I quickly checked my on-line dictionary for the meanings of the words "tenor" and "tenure":



I don't think that the two words can be used interchangeably like the American/English spellings for "flavor/flavour" or "honor/honour". The key question that I would like to ask the bank is, "How can they make a mistake like that?" While they are at it, maybe they can consider changing "base interest rate" to "bass interest rate" and "bank" to "band" as well?

Oh yes, I visited no less than 5 different banks in the past few days and all of them could not give me a hardcopy of the said pamphlet. Isn't it supposed to be freely available? Now is that yet another mistake? Or have all the pamphlets been recalled for correction of the glaring mistake?

This is certainly a loan that makes you moan and groan. And it's not only because of the high interest rate that it is charging.

CB Has Opened Up, Cocky No More

Yesterday I received an email reply from CB about my earlier complaint feedback. I can't help but feel that the email looked rather like a standard reply. The bank probably only filled in the blanks with my surname and the date of my email:

"Dear Mr Koo,

Thank you for your email dated 03/02/07.

Please accept our sincere apologies for the inconvenience you had experienced.

At CB, we place significant emphasis on the quality of our service and customer satisfaction. We truly appreciate your time in providing us your feedback and we will endeavour to continue to improve our level of service in order to serve our customers better.

We wish to thank you for taking the time to provide us with this valuable feedback. We have since forwarded it to the relevant parties to assist you directly with your queries.

Thank you and have a nice day.

Sincerely,
JS
Direct Banking"

At slightly past 7 pm tonight, my handphone rang. I glanced at the caller-ID display - it was an unfamiliar handphone number. I answered the call. It was JY. He had called to offer me his apologies. He said that after reading my blog, he realised that he was "too much" that day. He explained that he was not himself that day. So it must be his identical twin brother whom I spoke to that day.

I said that I hoped that he learnt something from this incident. Not everyone was a pushover. He said he surely did. I reminded him about Helen, the coffee lady and told him that I accepted his apologies and asked him to convey my acceptance to the bank.

Now that JY had apologised, I am willing to put this incident behind me and I hope that CB and JY could too, without any hard feelings. Please don't retaliate by raising my loan interest rate some more. I am really at your mercy. On the other hand, it would be good to show how genuinely apologetic you are by slashing the interest rate.

Actually, I would very much have preferred JY to offer his apologies by commenting on my blog. Then, I would look less like Mr Lee Dai Soh telling a one-sided grandfather story here. Yes, it would be nice if JY could do what bluemad did, when I complained provided feedback about my not-so-pleasant experience when shopping around for an LCD TV.

I know what Mr Lam Chun See is thinking - that I look more and more like a difficult customer who likes to complain rather than that the service standards in Singapore sucks, am I right? Sheesh.

Singapore's Cockiest Bank Officer? (2)

I got a queue number for Priority Banking (PB) customers. A Relationship Manager (RM) in his 20s looked unengaged so I asked him if he could serve me or would I have to wait for my number to be called. He replied curtly and without smiling, "Ya, your number will appear on the display. We have other things to do." Okay fine, I waited. Meanwhile, I noticed that the normal queue was moving faster than the PB queue - What priority? What irony!

My number finally flashed on the display and I was to be served by the same officer. "S***, just my luck", I thought. He gave me a cold look as I sat down. No smile, no shaking of hands, no "Good morning, Sir", "Hello" or "May I help you" from him either. Didn't say who his father was. Didn't introduce himself or hand me a name card. As the silence was getting awkward, I had no choice but to start the conversation:

Me: I am here to find out if it is worthwhile to partially redeem my housing loan with my CPF money since it is paying me only 2.5% interest and your bank is charging me 4.55% for the loan.

RM (as if interrogating a suspect): What is your IC number?

Me: xxxx134B

He typed something on his PC and looked at the display for a few minutes, without saying a word. (A customer-oriented officer could say something like, "Please wait a moment while I retrieve your records. It won't take very long.")

I cocked my head to peer at the display. He realised what I was doing and immediately swivelled the PC a little away from me. I got the message and looked elsewhere. Such hostility was unjustified - wasn't I only looking at my own records?

What seemed like an eternity passed.

I finally broke the silence: Actually, if the bank didn't introduce the new way of calculating interest recently, I wouldn't have wanted to redeem the loan.

RM (looking bewildered): But the bank is losing money.

Me: How can the bank be losing money? So would the bank rather lose a customer?

RM (dropping the bombshell nonchalantly): I think so.

WTF! Frankly, I was stunned by that uncalled-for retort. Now I know why the bank's name has the letters 'CB' in it. At this time, my wife came and sat beside me. While the RM was away getting some forms, I told her what happened. My wife was furious. (Hell hath no wrath like a woman scorned poorly served.) The RM came back after a while.

Wife: Can we see your supervisor or manager?

RM (looking cocky): Today, I am the one the way and the truth.

Wife: Okay, then can you give us the necessary forms and the contact number as we would like to reconsider our options more carefully.

He wisely did as told to avoid incurring the wrath of a woman.

I don't know why I bothered to thank him but when I did, he just nodded. The much awaited "You're welcome", his last chance at a saving grace, never came. Before leaving, I took one of his name cards from his table. No, not to write him a letter of commendation, of course but to know the identity of what could be 'Singapore's cockiest bank officer'. Ah, so his initials were JY.

So JY, if you are reading this post, I have this to say - I think you are in the wrong line. You are doing a disservice to your bank.

Make no mistake, my banking experience with CB has been positive until recently when they started to squeeze so much money out of me. And lest any of you think that I am a difficult customer, well I am actually not. I have previously encountered a few RMs of the same bank who provided impeccable customer service. A few years ago, I even gave feedback via the bank's website, commending another RM in its Marine Parade Branch. By the way, her initials are YW and her customer service, attitude and looks are excellent. But most important of all, she knows how to smile. (JY, if this word sounds foreign to you, its definition in my dictionary is 'a curve that can set a lot of things straight'.) You will understand why I still prefer to go to YW whenever I have dealings with CB. It's just that I happened to be in Tampines that day. Damn it! And it turned out to be a wrong decision.

Still on the topic of customer service, today I had lunch at Maxwell Food Centre. It was not exactly a place where I expected to get a very contrasting customer experience. But I did.

I went to order a cup of tea from stall no. 01-90 (金成号饮品冰室). The middle-aged stall lady greeted me with a smile and a "Good afternoon". When I paid for the tea that she served personally to my table, she said gratefully, "Thank you very much." I was so impressed by her service that I spoke to her, commended her good service, shook her hand and even got her name (Helen) because she did not print name cards. When I told her that I wanted to blog about my good customer experience with her, she thanked me some more and asked me to bring my friends to her stall. So go on and try her, I mean her coffee and tea. Give her an impromptu test and let me know whether she treated you differently.

JY, looks like you could learn something from Helen, the coffee lady. She only sold me a cup of tea that cost a mere 60 cents and yet she took pride in providing good service. On the other hand, you know that my dealings with your bank run into several hundred thousand dollars and are worth several thousand dollars in annual earnings to your bank, part of which pays your salary. So did I really deserve the service that I got last Saturday?

I would like to consult my dear readers on what further action I should take, if any, besides blogging about this experience? If I lodge a complaint via the bank's website, JY could be in serious danger of losing his job or his next promotion (for I am quite sure that he's not the Bank President's son). I don't want that to happen because this may be his first job and he may really need it. Should I send a personal email to him highlighting this post so that he may improve? (I got his name card, remember?) Or should I wait till he or his colleagues find out about this post (and I am sure they will, in time). Please give me your views as I am still in a state of shock and cannot think properly. Oh, I nearly forgot, thank you very much for reading this post and giving your views. Hope to see you again and have a nice day.

Singapore's Cockiest Bank Officer? (1)

I am still servicing my housing loan with an established foreign bank. Previously, this bank used to have a very attractive way of calculating my loan interest. It worked this way - I deposit my excess savings in a 'check-and-save' account. The monthly balance that I maintain in the account will be deducted from the loan principal before the monthly loan interest is calculated. For example, if I have a $300,000 housing loan and I have $240,000 savings in my account, I effectively pay loan interest only on $60,000, i.e. $300,000 - $240,000.

However, everything changed in October last year. The bank introduced a 'novel' (read profitable) way of calculating loan interest. With immediate effect, only 2/3 of my savings could be used to offset the loan principal for the purpose of calculating the loan interest. For the balance of 1/3 of the savings, the bank pays only a measly 1% interest which they claim 'is still higher than what most banks are paying'. Some consolation.

Many of the bank's customers, including yours truly, were caught unaware. Because of the recent property boom, some had signed up for a housing loan with the bank only a few months ago. Within that period, the interest rate, being a floating one, had been revised upwards a few times. As for me, I restructured my loan with the bank in early 2006. I had to pay more than $500 in administrative charges then. Immediately after the restructuring, I was enjoying a low loan interest rate of 1.6% p.a., but not for long. Now, only one year later, I am paying a hefty 4.55% p.a., almost a 3-fold increase.

To add insult to injury, the bank slapped us with the new way of calculating loan interest which was obviously aimed at squeezing even more money out of us. I have calculated - I am now effectively paying almost 6 times more interest compared to what I was paying early last year. Let's rework the sums using the same example above. With the new method of calculation, I can only offset 2/3 of my $240,000 savings or $180,000 from the loan principal of $300,000. This means that I have to pay interest on $120,000 instead of $60,000 previously, a two-fold increase. Coupled with the nearly 3-fold increase in interest rate, I am paying almost 6 times the original interest amount. This is simply ridiculous!

A few letters of complaint written by irate bank customers were published in the forum pages of our mainstream newspaper in October 2006. The bank replied, explaining that because of the rising interest rate environment, it had to raise interest rate for housing loans. It also refused to budge regarding its new way of calculating loan interest. It even tried to convince us that customers 'do not end up paying more interest than before'. What crap! Does the bank think that all of us failed our Primary School Maths?

Because of the above developments, I was at the Tampines Branch of the bank last Saturday to find out if would be worthwhile for me to redeem part of my loan using CPF funds. (CPF is paying me only 2.5% interest while the bank is charging me 4.55%. However, I have to pay 1.5% in penalty charges since my loan is still within the 2-year lock-in period.) As if to rub more salt into the wound, the 'Relationship Manager' who served me gave me extremely poor service despite the fact that I am a 'Priority Banking' customer.

(To be continued)