Banking error doesn’t seem ‘isolated’

Mason jar with pennies spilling out

HSBC bills itself as "the world’s local bank."

But when I recently tried to get it to correct a banking error, I felt as if I were on Mars.

HSBC conducts online banking operations under the name HSBC Advance, which reflects, it says, its "global focus."

HSBC also asserts that online accounts are "supported and delivered to you by HSBC Bank USA, N.A.," a national bank headquartered in Buffalo.

In January, HSBC Advance changed my online CD into a savings account, charging me an early withdrawal penalty in the process.

This would have been fine if I’d authorized the transaction. But I didn’t.

After discovering the error, I called and spoke to a representative whose native tongue clearly was not English. Following 45 minutes of back-and-forth, and off-line consultations with her "supervisor," the representative admitted the error and promised it would be rectified.

It wasn’t.

I sent several follow-up emails, receiving replies promising an "investigation." I even got a voicemail that might have been in English, although I wasn’t sure, owing to garbled words and syntax.

Finally, after more than a month, I filed a complaint with the Office of the Comptroller of the Currency, the primary national bank regulator.

The OCC’s complaint process involves filling out a simple online form, which the agency forwards to the bank.

The OCC complaint eventually did the trick -- although it took another two-and-a-half weeks to fix my CD account.

A letter from a bank VP in Buffalo (cc’ing the OCC) assured me that what I’d experienced was "an isolated incident."

Sort of a one-off experiment in bad customer service, I guess.

I’m sure thousands (if not tens of thousands) of bank customers receive shabby treatment daily. You only have to look at the "robo-signing" scandal to know that.

I think my difficulties at HSBC Advance stemmed largely from its offshoring of operational and supervisory functions. HSBC Advance isn’t exactly the bank down the street. (I’m not even sure it’s the bank in Buffalo.)

But my experience raises another question: if major banks routinely make errors like this, and fail to correct them promptly, how does our financial system survive?

In the grand scheme of things, are all the erroneous debits simply canceled out by erroneous credits? Is everything just lost in the rounding?

Or does nobody worry because the mega-banks are backstopped by their "regulators" against their own incompetence and bad behavior?

I wonder.