5 Insider Tips to Avoid Bank Rip-Offs

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Ever wonder what insiders at banks have to say about things like sales, commissions, and fees and rates on bank consumers? Well Dani Zabala, an ex-banker and founder of the website GetBankSmart.com, has some specific tips for bank customers to keep from getting fleeced by greedy bankers.

Zabala’s mantra is this: “Own your bank, and don’t let it own you.”

The key to achieving the former and avoiding the latter is knowing what tricks banking professionals have up their sleeves when they’re trying to pry you away from your cash.

One of Zabala’s primary themes is to know who is on the other side of the desk when you’re dealing with a bank employee, customer service rep, or lending officer.

Here, he offers five tips to make sure you don’t get ripped off when you’re dealing with a bank:

1.  Get the whole story. Zabala knows from his own experience that bank employees are salespeople first and customer service reps second. So, make sure you get the whole story. “If the person speaking to you is only going on about the great teaser rate or the cash back bonus you’ll get after signing on, you’re hearing an incomplete story,” he says. “Financial obligations can go on for a long time, long after the salesperson in front of you has found a new job.”

2.  Press for full disclosure on fees. Bank employees are trained to tamp down any talk of fees and penalties when pushing a bank product, like a certificate of deposit or a rewards checking account. In fact, Zabala doubts they’ll bring the fee issue up unless you do first. “Consumers make the mistake of not thinking clearly about how they’re going to use a product, and how a fee structure would interfere with their intentions,” he explains. “ Financial officers make the mistake of not bothering to explain it to them so as not to interfere with a sale.”

3.  Get the paperwork. Bank staffers may also talk up a product, but not necessarily back it up with proper documentation. That, Zabala says, can lead to big problems down the road. “As a general rule, anytime you talk to anyone about any financial product, you ought to be getting some documentation as a result of the conversation,” he advises.

4.  Watch for the “bait and switch”. Banks, especially when it comes to pushing credit cards to younger consumers on college campuses, aren’t above the artful dodge in getting consumers to sign on the bottom line. Zabala says to watch out for things like “free” gifts to sign up for a credit card or cash bonuses for a “free” consultation.

5.  Learn to say no. Zabala says banks love to employ greeters at the door to show you the bank’s best face. But greeters are really there to steer you into a “back office” where you’ll be sold on any number of bank products or services. Once you’re in the door, bankers figure, they can start counting the dollar signs. The trick for consumers, he says, is to avoid being “funneled” into one of those back rooms.

Zabala’s overall point is that banks see you just as much as a sales target as a customer. The way to fight back is to know how bankers think. If you know what they’re taught to do, you’ll create more wiggle room to just say no.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

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