Foolish Bank promotional ideas

November 23, 2003 9:49am by Barry Ritholtz

Of all the idiotic ideas to come out of the banking industry, these two recent brainfarts are my favorites. I’ll be curious to see how long it takes for either of these banks to drop these promotions, or go bust:

idiotic bank idea #1: Washington Mutual offers free ATM usage for non customers.

This is a twofold winner: First, it raises the question “Why would anyone become a member of this bank? You get the main advantage of opening an account — free use of their ATMs — without having to open an account!

If I was shopping for a bank, and it was between Chase, Citibank and WaMu, I would pick the non-Wamu bank. Why? Cause it would give me twice as many bank ATMs to choose from, cost free. Duh.

This promotion has the added bonus of annoying Washington Mutual’s existing customer base, who now has to wait at longer lines for the free riding non customers at WaMu’s ATMs. Simply brilliant.

How often do you see a major financial institution pay for advertising that 1) discourages becoming a client; 2) Bothers and frustrates the existing clientele? Seriously, what rocket scientist thought this up? And why isn’t he working the fry machine at Mcdonalds?

idiotic bank idea #2:Long Island Sumpthin Bank: free ATM usage everywhere!

Explain this Crazy Eddie model to me: Open up a no fee checking account, and all of your ATM usage –including any other bank — is free! That’s right, we will subsidize all your the $1.50 or even $2 fees. Why? Cause we’re INSANE!

The only thing which keeps people from using the closest bank (I.e., most convenient) is that damn fee — which, if you recall, is exactly what the banking industry promised us wouldn’t happen oh so many years ago.

How on Earth can these guys stay in Business? I spend about $10 a month on ATM fees, and that micro-payment annoyance is only kept in check cause I’m in Manhattan 5 days a week, where there is a bank every 14 steps. If it were free, I’d run up $1000s of dollars per year in fees. Unless this is merely a promotional thing which lasts a very short time — which is not stated on the advert — it sounds like the next Pets.com.

The funny thing is, I hear this commercial on Bloomberg radio constantly, and cannot for the life of me remember the bank name.

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