My problems with Peoples Federal Savings Bank

by Jonathan Kamens <jik@kamens.brookline.ma.us>

Last updated: $Date: 2012/02/09 15:13:59 $

Recent changes

2006-06-21: Believe it or not, today, over four years after I closed my last Peoples account, I got spam from them that began "Dear Valued Customer"! What a riot!
2003-03-26: I haven't updated this page in a Long Time. I actually closed my Peoples accounts on March 18, 2002. When I closed the accounts, no one at the bank asked why or whether they could do anything do change my mind. Great customer service.
I moved my accounts to Mercantile Bank. There were a couple of minor bumps at the beginning, but overall I'm much happier with them than with Peoples. Interestingly enough, Mercantile recently went through the same computer upgrade that Peoples did, and they avoided nearly all the mistakes about which I complained to Peoples. Maybe they visited this Web site when planning their upgrade!
A few months ago we ended up moving some of our accounts from Mercantile to Citizens Bank to get a low rate on a home equity loan. We're happy with their service as well.
2002-01-10: I received a new version of the letter I'd received on January 7, this one with the correct date on it.
2002-01-09: I received E-mail from Gaffney about the date error in his letter.
2002-01-07: I received a letter from Peoples, dated December 4 but postmarked January 5, inviting me to come to the bank to discuss my concerns with them. I declined the invitation.
2002-01-02: An Allston/Brighton Tab reporter came to my house to take my picture for the story they're supposedly going to run about my problems with Peoples.
2001-12-22: Almost five months after I first asked them to do so, Peoples finally explained the discrepancy between my interest calculation and theirs.

What's the story?

I have been a customer of Peoples Federal Savings Bank in in Brighton, Massachusetts, for several years. I was perfectly satisfied with their service until June 2001, when they decided to "upgrade" their computer systems.

From my perspective, the upgrade was a disaster. The manner in which they did it was not secure, they messed up ATM access to my accounts, they messed up the status of my accounts in their computer, they charged me service charges they should not have charged me, they messed up the ATM user interface, etc.

We've all heard stories about terrible customer service from banks, so you might say these problems aren't particularly noteworthy. However, most of the horror stories come from the "big banks" (e.g., everyone in Massachusetts knows at least one horror story about Fleet, its predecessor BankBoston, or its predecessor BayBank). What makes my story different is that Peoples is small (with only a few branches) and claims to be a "neighborhood bank."

As if all the problems mentioned above weren't bad enough, my calculations suggested that they also miscalculated the interest on one of my accounts for the month of June. I spent almost six months trying to get them to explain the discrepancy between my calculations and theirs, or, if my calculations were correct, to admit that an error had occurred and take steps to apologize for, publicize and correct it. It turns out that their interest calculations were correct (see this letter for an explanation), but they couldn't be bothered to explain why until I contacted the local news media and several regulatory agencies asking them to investigate the situation.

What did it take to get them to answer you?

When I finally gave up on waiting for Peoples to do the right thing in response to my inquiries. I contacted the Boston Globe, the Boston Herald, the Allston/Brighton Tab, WBZ (channel 4) TV news, WCVB (channel 5) TV news, WHDH (channel 7) TV news, WFXT (channel 25) TV news, WLVI (channel 56) TV news, the Massachusetts Division of Banks, the FDIC, and the Federal Office of Thrift Supervision (OTS) and asked them to investigate.

The Tab and the OTS responded to my inquiries, so when Peoples finally explained to me why their interest calculations were correct, I contacted the Tab and the OTS and notified them of this.

The Tab is supposedly going to print a story about my problems with Peoples. They sent a photographer out to my house on January 2 to take a picture of me to run with the story.

I also created this Web page and put pointers to it in various forums, such as the ne.general newsgroup and the RISKS Digest.

Why did you bother?

You might wonder why I spent so much time pursuing this complaint. After all, Peoples did finally refund the errant service charges, and as for the apparent interest miscalculation, I was overpaid, not underpaid, and by a trivial amount, so why didn't I just drop it? Because I believed that Peoples has demonstrated through their actions that they were capable of harming not just me, but many of their customers.... How many other people's interest payments were miscalculated? Were some of them underpaid rather than overpaid? Were they all for trivial amounts, or were some of them large? If Peoples can do it once and refuse to acknowledge or correct it, who's to say that they won't do it again? I have been unable to get Peoples to provide satisfactory answers to any of these questions, certainly not for lack of trying (as you can see from the record of correspondence below). I cannot stand idly by and do nothing while Peoples continues to conduct business in a manner which could be materially damaging to its account-holders.

Now that I know that the bank's interest calculations were correct, I still believe that Peoples has shown through their actions that they are not to be trusted. Why should anyone trust a bank which so thoroughly botches an upgrade to its computer systems and then fails to promptly fix the problems while claiming that it has already done so? Why should anyone trust a bank whose officers either are incapable of explaining how their interest calculations are performed or simply refuse to do so when asked?

Can I see all the sordid details?

Here is a complete record of my correspondence with Peoples since June. If you don't want to be bored by reading everything, you can get the story by reading just the ones in bold.

I've got something to say!

If you'd like to comment about this page, you can send me E-mail.