Sunday, April 21, 2013

How Big Companies Lose Their Way

I recently refinanced my home with a large bank, one that is publicly announcing that it wants to grow its market share to 40%. This lender currently controls 1 in 3 U.S. mortgages, and states that this is a result of doing a better job than its rivals. If my refinance experience is an example of doing a better job, this bank is sorely mistaken. This nationwide bank treated me as if they were doing me a favor by accepting my business, and either through neglect or bad faith, at three different times tried to extract thousands of dollars in additional fees. This episode demonstrates how a large organization can lose its way and cause its own downfall.

This leading nationwide mortgage lender attempted to raise fees at the very end of a 90-day refinance process, hoping that either I would not notice or would be so far along that I would cave in. I found out about the fee changes from the legal disclosure documents in the last days before closing. Three times, I was verbally assured that their original fee structure would be honored and then later received written documentation to the contrary. Each time, I had to make numerous phone calls to confront and resolve the undisclosed fee changes.

The most revealing were the conversations that I had after I escalated my concerns to the branch manager. This senior manager is responsible for a branch office with many employees who process hundreds of mortgages each month. When confronted with my demands that the bank honor its original good-faith estimate, he twice relegated all responsibility to some faceless bureaucrat in another part of his organization. He was helpless to honor our agreement because someone else would not approve the final loan details, even though I had been told weeks earlier that my loan had been approved.

At one point in my frustration, I expressed that I was so disappointed with this experience that I might move of all of my personal and business banking elsewhere. His response was astonishing. He stated that other than the mortgage, my banking business was not his concern. If my banking business is not important to a branch manager, to whom is it important? Is there anyone at this bank who values my business? Probably not.

All of us have individual stories where a large institution takes us for granted, and forgets that our business, support and loyalty are not unconditional. We deserve better and new competition will always emerge to offer us an alternative. When large companies lose their way, opportunities are created for entrepreneurs to offer products and services that exceed our expectations. Within the organization that I lead, we value our customers and empower our employees to make decisions that serve our customers. We do not have the luxury or desire to take our customers for granted, and we are better for it.

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