How to lose a bank client

For the benefit of any bankers who want to send their clients running as fast as they can to competitors, here are a few quotes from my banker today. I wrote them down in French, so will give the originals and their translations.

After I asked whether it were possible to adjust monthly payments to account for salary increases:
“Oh oui, mais vous savez, il ne faut pas payer au début ! Je veux dire, il faut payer le moins possible !” (“Oh yes, but you know, you shouldn’t pay at the beginning! I mean, you should pay the least possible!”)
Reaction of a client who knows anything at all about how compound interest works: “Wow, that’s a great strategy for a bank to earn as much from the interest as possible, and get myself taken advantage of in another way too, because the principal is amortized more slowly.”

In response to my question on whether there were any fees associated with adjusting monthly payments:
“Oui, il y a des pénalités.” (“Yes, there are penalties.”)
I asked how much.
“Oh ben, les pénalités comme on peut en voir ailleurs.” (“Oh you know, penalties as can be found elsewhere.”)
I repeated my question as to the amount, specifying that it was free at some other banks.
“Hummm… à la date anniversaire, zéro virgule cinq du montant des frais de dossier du prêt.” (“Umm… on the [loan subscription] anniversary date, zero point five of the loan application fees.”)
My reaction: “La moitié des frais de dossier ??” (“Half of the application fees??”)
“Heu… zéro virgule cinq, heu, oui, c’est vrai, ça fait la moitié.” (“Uhhh… zero point five, uh, yes, true, that is half.”)
For information, the application fees are 900 euros. So in order to change payments, it can only be done on the loan anniversary date (rather common practice here), and it would cost 450 euros.

At the end of our meeting, after she’d proposed the worst interest rate by far at 5.01% for a 25-year loan and I’d reminded her that the worst offer I’ve had elsewhere was for 4.80% over 25 years:
“Il ne faut pas regarder les taux d’intérêt, m’enfin !” (“You mustn’t look at interest rates, come on!”)
I reacted by staring at her blankly.
“Mais oui, il ne faut pas regarder les taux. Il faut aussi prendre en compte les assurances, la garantie, les frais de dossier, et au lieu des taux, il faut regarder les mensualités.” (“That’s right, you mustn’t look at the interest rates. You should take into account insurance, the guarantee, loan application fees, and instead of the interest rate, look at the monthly payment amount.”)
Again I stared at her blankly, since their insurance was the same as elsewhere, their guarantee was a full 700 euros more expensive than the worst offer elsewhere, their loan application fee was twice as expensive, and the monthly payments were, naturally, more expensive… and I had to pay a fee to change them.
“Quoi ? C’est vrai, il ne faut pas regarder les taux d’intérêt qu’on vous propose. C’est la mensualité qui est importante. Gardez bien ça en tête,” she said with a motherly tone. (“What? It’s true, you mustn’t look at the interest rates proposed. It’s the monthly payment amount that’s important. Keep that well in mind.”)
Still staring at her, I calmly replied, “Madame, I know enough about finance to know that an interest rate is important.” She continued to insist it wasn’t, so I got up to leave.

The woman in question was none other than the vice director of the Nice branch of my bank. I’m being charitable by not giving their name. Let’s just say it’s the same French bank that “accidentally” lost a few billion euros recently, just in time to claim it as a loss on taxes for a very profitable year, and blamed the loss on a single employee. Not surprising at all, is it?

8 responses to “How to lose a bank client”

  1. Chris Says:

    Wow.

    Maybe its a culture difference when it comes to consumer expectations, but I know a commission when I smell one.

  2. fraise Says:

    French banks do indeed operate on a different cultural approach, but it’s not one that’s appreciated even by French people. There’s no equivalent to credit unions, so there’s really no competition. (The closest to a credit union seems to be La Poste’s bank.) So banks have crap offers and take advantage of clients in general, like this whole “anniversary date” and “penalty” deal for something as basic as paying down a loan ahead of time. My personal favorite is that when you make an electronic transfer, it’s taken out of the sending account immediately, but is only put into the recipient account after a minimum of 24 hours and can (and often does) take up to 72 hours, three days! This includes, of course, salary wires from employers. Obviously they earn truckloads with all that money not-actually-passively “waiting” to be transferred.

    That and the bank I’m at is widely acknowledged to be one of the worst in France — they’re well known for giving “advice” like this. Of course, I found that out after opening an account with them, sigh. I’ve never needed anything major until now and so hadn’t bothered to change, but am taking the chance to do so ASAP.

  3. /anne... Says:

    Sounds like if I moved to France, at least the banking system would be familiar! We have credit unions in Australia, but fixed interest loans are usually only for 3-5 years (then you decide what you’re going to do for the next 3-5 years), money leaves your account and takes a minimum of a day to appear in the other person’s account, and paying out a loan in total before the end date incurrs a hefty fee, as do lots of other things. Some types of loans – usually cheap, fixed interest loans – you can’t vary your repayments, but most loans you can. We do have one cute thing – interest offset accounts, where the money in your normal account is counted as paid off your loan, until you use it. The downside is that you usually pay more interest for accounts with that facility!

    Oh, and interest rates here for mortgages are almost at 10%. Maybe I _should_ move to France! Pity I’ve forgotten almost all my high school French :-(.

    Good luck – I’ve bought one house, and almost bought another (lost my job in the middle of the sale – lost everything :-( ) – even when you know the language, it’s still confusing – that’s the way they like it!

  4. fraise Says:

    Interest rates on mortgages have been at historical lows here for the last 2 years or so; it wasn’t so long ago that people had 10%-12% too. One or two years ago you could get a mortgage at 3.5%!!! I won’t complain though, the fixed-interest mortgage I got at 4.8% is quite all right with me.

    I can’t even imagine losing a job in the middle of a sale :/ What a nightmare that must have been!

  5. /anne... Says:

    Interest rates are on the way up here too – only we never got below about 6.5%.

    We’d just moved from Perth to Canberra (like London to Moscow, only not as cold :-);
    I’m the only breadwinner, so yes – it was awful. I’m a technical writer, so rely on being ‘known’ by the agents – moving cities meant I had to start over. It took several
    months to find another job, by which time the money I’d made from selling our old house had gone in rent (rent in Canberra is about the same as unempolyment benefits; so if I hadn’t any savings, we would have starved).

    We survived; but house prices have doubled or even tripled since then due to stupid government policies, so the odds of me saving enough for a deposit are pretty slim.
    Ah well, at least I’m in work!

  6. Benoit Says:

    French banks are the reason why capitalism is so hated in france : you have to know how it has been introduced to us… Banker is nearly an insult to me ;)

  7. Stone Says:

    Stone…

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  8. House Hunting in Paris Says:

    LOL SocGen is the worst. I closed my account with them a few months ago and just got a letter in the mail saying that my account had been overdrawn and was being suspended (because they didn’t actually close it and continued to charge service fees on my 0 EUR balance). I’ve been mostly satisfied with BNP and happy with HSBC, but I probably just lucked out with the employees at my local branches.

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