Bank of America sharpens messaging about new fees

CHARLOTTE, NC: Bank of America has amplified its messaging about new debit card fees after it received backlash from both consumers and politicians in the past week.

CHARLOTTE, NC: Bank of America has amplified its messaging about new debit card fees after it received backlash from both consumers and politicians in the past week.  
 
The financial institution shifted its communications to emphasize how consumers can avoid fees and to explain what benefits are provided as a result of them.
 
“We anticipated the response as much as anyone can, but adjusted as necessary given some issues that came up…including comments from Capitol Hill,” says Anne Pace, SVP of media relations for BoA's consumer and small business banking unit. “We're stressing our commitment to being more clear and transparent with customers about our fees, and the service and convenience that the fee helps offer.”
 
BoA is conveying that message to consumers through its banking and call centers, as well as via mail and the phone. The company has also used its Twitter account to explain who has to pay fees and how to avoid them. Pace says the bank is working with a PR firm, but declined to name the agency.
 
Last week, BoA announced the $5 monthly debit account charge, which takes effect next year for customers who have its most basic checking accounts. At the time, the bank told the media via statement that “the economics of offering a debit card have changed with recent regulations,” but offered little further explanation. That led to an online backlash from consumers and criticism from members of Congress.
 
The bank also unveiled the fees at a time when “Occupy Wall Street” protesters are massing in New York and elsewhere around the country. A June Gallup poll found that 36% of Americans say they have “very little” or “no” confidence in US banks, an all-time high.
 
Mike Lawrence, chief reputation officer at Cone Communications, says BoA did a poor job of communicating with consumers about a sensitive subject.
 
“Big banks are known for communicating arrogantly, and with this announcement you saw BoA do an expert job of communicating in an arrogant way,” he says. “There didn't seem to be any proactive attempt by BOA to explain in consumer-friendly terms, ‘We're here to provide great services to our customers, and to do that we need to change the pricing on this, and here is the proof that we have to do that.'”
 
The fallout and resulting strategy shift by BoA will likely influence the communications of other banks, some of which have also recently introduced new fees. Representatives from Wells Fargo and JPMorgan Chase did not respond to calls seeking comment by press time.
 
Meanwhile, financial industry trade groups such as the American Bankers Association (ABA) and Electronic Payments Coalition (EPC) are making the case that banks need to recover revenue lost to new legislation. The Durbin Amendment, which went into effect October 1, reduced the fee merchants have to pay to banks when consumers use debit cards. The financial industry had aggressively lobbied against the amendment.
 
“Our goal now is to make sure that the coverage accurately reflects that these fees are a direct result of congressional action,” says John Hall, SVP of communications at the ABA.
 
ABA sent a letter to Congress explaining the reason for the fees and urging policymakers to consider ways to reduce the impact of financial services reform. The group has also pitched inside-the-Beltway reporters a statement from president and CEO Frank Keating about the issue.
 
“Most of the coverage has made the connection to the loss of revenue — and the fact that the retailers had their expenses cut, but don't plan on passing along their savings to customers,” says Hall.

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