A modest proposal: Close your Umpqua Bank account

Great coverage here in today’s Oregonian by Brent Hunsberger regarding Umpqua Bank’s decision to cram mandatory arbitration down the throats of Umpqua customers. If you’re an Umpqua Bank customer, you might want to seriously consider moving your funds to a credit union.

By way of background, the U.S. Supreme Court decision last year in AT&T Mobility v. Concepcion touched off a race to the bottom. The Court gave corporations great power to require customers to take any disputes to arbitration, while banning class actions.

The Court fell for the old Lucy, Charlie Brown and the football argument that arbitration is cheaper, easier and better for consumers. Arbitration is none of those things to consumers–especially in small consumer cases. In those cases in which the amount at stake might be $20-200, arbitration filing fees, hearing fees and arbitrator payment fees effectively bar individual consumers from pursuing their claims.

When the likes of Umpqua Bank and ATT Mobility engage in small-dollar rip offs of many consumers, they earn large amounts of money. To put it concretely, if a bank illegally charges five dollars each year to a million customers, it earns $5 million per year in illegal profits. In the past, consumer lawyers have stopped that nickel and diming by pursuing class actions. If a class of a million consumers collects $5 per consumer plus attorney fees and costs, does anyone think the bank will continue the illegal practice?

Banks–and those who represent them–dislike class actions. They settled on a simple strategy. Ban class actions and require consumers to go to arbitration. Ending consumer class actions is a bit like filling the slop pit for a bunch of hungry swine. They’ll be all over that deal.

Once the Supreme Court decided ATT Mobility v. Concepcion, banks, cell phone providers, credit card companies–hell, almost any big business that sells things or services under a written contract–all rushed in for the feeding frenzy. So I guess it is no surprise that Umpqua wants to get in on the action.

So where are consumers in this? If you care about this issue and you are an Umpqua customer, the best response is to vote with your feet. Move it to a consumer-friendly credit union. Because if enough Umpqua customers move, I’m guessing they will get a little nervous. And if a lot of Umpqua customers move, I’m thinking they might get a lot of nervous.

So do it if you can. If they can’t treat us better than slops in a trough, seems to me they don’t deserve our business.

Cheen says

I'm a college student and haven't had a consistent income until recently. Umpqua has been charging me a fee for every month that I have less than $500 in my account (that several banks and credit unions waive for students). The -$7 is usually 1/4 of my balance.
Ok fine whatever. Anyway, I'm under the impression I deposited $700 into my checking via the check snapshot app. I got a confirmation receipt emailed to me and the funds were available in my checking account online. Days later I go to the store and get my card declined at the register with about $150 of groceries. The mobile office was closed, so the first Umpqua service representative I spoke with told me it was because they revoke checks that were made to a third party and that my check was made to not-me. Not having the void check at the grocery line I was unable to argue. She was so wrong! Check had my name. Spelled right and everything. If it weren't a weekend and I weren't living at a research station, hours away from an Umpqua store, then I would have gone in and raised hell. Come Monday, I talk with three more Umpqua service representatives who agree that the check should have gone through and it doesn't make sense that $700 was taking back out of my checking. One of them tells me to simply re-deposit it through the mobile app. Wow. No way, not working. Nobody could give me an explanation, whilst that $7 monthly fee is still being deducted for being under-balance in the meantime. Seriously, bank?
Another time I received over 120$ in overdraft fees because the monthly fee over drafted my account. What BOTHERS me is the fact that I was in the store twice, depositing checks at the teller, before going home and realizing that half of my deposits were eaten by over drafting fees. Wouldn't it make sense for the teller to be like, "hey, by the way, we've been charging you $35/ for the last week, because we took $7 from you when you only had $6.. Did you know that?". Thank goodness for those minimum-balance txt and email notifications I signed up for... ... .. .
I realize this is a lot of rage and venting for one comment, but somebody needs to do something about banks that conduct business like this. I feel so helpless and frustrated. This is my stressful, money-pinching life. It shouldn't be this hard to deposit a check and Umpqua's profit-seeking negligence has caused me serious problems and distress.

David Sugerman says

Sounds frustrating, to say the least. Bank fees are one of the new profit centers. And guess who pays? For various reasons, this is not something I can take on right now. But if you are interested, I might be able to make a referral. Call our office during office hours at 503.228.6474 if you would like me to make a referral, as I would need more information.
-David

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