Their names are legendary: Goldman Sachs, Citibank, JP Morgan Chase, Merrill Lynch and many more. Financial service companies like banks, investment firms, and insurance companies are the icons of wealth. These companies provide valuable and essential services. Without them our economic system would cease to exist. But along the way to providing their essential services, they sometimes take advantage of their unsuspecting customers in sneaky ways.
They tend to take very small amounts of customer’s money, in the form of fees, often when little or no service was provided to earn such fees. From the industry’s perspective, the beauty of this system is that the fees are often so well hidden that we don’t even know we’re being charged. Typically, when government tries to impose disclosure rules on banks and investment firms, those banks and investment firms fight them tooth and nail.
When we do know that fees are being charged, they are often so small that we don’t bother fighting or questioning them. But tiny fees on a regular basis add up to a lot of money over time.
Also, financial service companies have the advantage of inertia. While, if say, a restaurant serves you a bad meal or gives bad service, you can easily decide that next time you’ll eat somewhere else. But it’s a whole lot harder to leave your bank or brokerage company, or insurance company, and those companies don’t make it any easier to go elsewhere.
What can you do to fight back?
We pretty much all need banks and insurance companies. However, knowing how they operate will give you the ammunition to try to strike a better deal with your financial company(s), to shop around for the best deal possible, and to avoid the gotchas that these companies are so good at dishing out..
Check out these links to have pretend financial services executives and marketing pros explain how they take advantage of us.