Washington Mutual: Predatory Bank, WAMU Sucks

Services for Real Estate Pros

This is an opinion piece, take as you wish, but I think Washington Mutual is predatory on what economists would call a micro level.  (They may be predatory in other ways as well, but I experienced it on a very "micro" level.)

While I'm at it, I also think they have lousy customer service and could care less about improving. (We'll see how they respond to this post.)  Over the years, while working as an Arizona mortgage broker, I have had many clients tell me that they've had negative experiences with WaMu, both on the mortgage side and with smaller issues, such as credit and checking accounts.  I never thought too much about it, even though Washinton Mutual seemed to come up more regularly than other banks. 

I never thought much of it, that is, until I opened a checking account three weeks ago.

I have my primary checking account with Bank of America, and I honestly do not recall ever bouncing a check with B of A or ever incurring a fee for insufficient funds...let us say for at least as long as I've been married (7 years).  I know I did it a few times in college, but that's pretty much it.

I've incurred over $200 in bounced check charges since I opened my account with WaMu earlier in May.  I also opened it with a starting deposit of two thousand dollars. 

How did this happen?  I have no idea.  But I can tell you this much:  WaMu ain't coughing up they money they took from me.  I just have to close my account and accept it and move on.  Do that a few million times, and WaMu is in the money.  Nice quarter fellas!

Wamu's Predatory Advertising:  Trapping The Hand-To-Mouth Crowd

I was watching television a few weeks ago when a Washington Mutual commercial aired.  You may have seen it; it is aired pretty often.  Basically, WaMu presents a spokesman who brags that Washington Mutual will waive one bounced check fee per year.  Behind him are "angry" bankers who are upset about the awesome deal he is offering.

That's it.  That's the entire theme of the commercial.  Washington Mutual was bragging about reversing one bounced check fee per year for their beloved clients.  At first I thought it was weird, but after my husband mumbled "predatory" under his breath, I realized that the commercial was predatory in the most basic definition of the word.

The whole purpose of that commercial was to get people to sign up for a free checking account at Washington Mutual, but not just any people-- they want people who bounce checks.  Think about it, the only demographic the commercial appeals to is the demographic that bounces checks.  The commercial didn't appeal to me at all, because I haven't paid an ISF fee in years.  It pretty much went in one ear and out the other.  But if getting one bounced check fee per year is enough to make you change banks, and matters just that much, WaMu wants you.

It doesn't really seem like a desired demographic, does it?  But they know they are going to milk those people for so much more.  They give you $34 for one reversal, and you pay for six more that year.  (I don't actually know the average amount of bounced checks per year.)

How They Ripped Me Off

I needed to open a new checking account.  WaMu is the bank on the corner and it seemed as good as any.  I opened my account with a $2000 wire transfer.  That is, I supplied my Bank of America routing and account numbers for what is normally an instant transaction.

Instead, Washington Mutual put a three-day hold on my TRANSFER.  This was not a personal check, this was not even a payroll check; this was a transfer from my Bank of America account.  Even better than a paper cashier's check as far as I knew.

Because that is incredibly stupid and makes no sense, I wrote six checks against the account.  Although I showed a "balance" in my account, WaMu bounced all six, for a total of $204.  I've even bounced more since then, with equally ridiculous explanations. 

Yes, I have closed my account.  And remember:

Be especially wary and cautious of those businesses that advertise to those who may be less fortunate in our society.  (Payroll cashing, title loans, payroll loans, Washington Mutual Free Checking)

Usually, most always, they are bad news on every level.

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Terry & Bonnie Westbrook
Westbrook Realty Broker-Owner - Grand Rapids, MI
Westbrook Realty - Grand Rapids Forest Hills MI Re

Did you call the customer abuse center based in India? That always makes me feel better to listen to a person that you can't understand and really could care less if they can help you. Just trying to help. Customer service and banking what a joke. Maybe we should let them get into the Real Estate business.

Jun 02, 2008 02:59 PM #11
R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham
Bank of England (NMLS#418481) - Raleigh, NC
Bob Mitchell (NMLS#1046286)

I know that it's probably not worth the time and aggrevation, but I'd file a complaint with your attorney general, as well as maybe even take them to small claims court....(on the principal of the matter...if nothing else, email this post to a local reporter).

As Fran pointed out above, wire transfers are "good funds" and there is no reason that once they get the money from the fed (yep, it's their system that processes these things) it should have been in your account. 

Bob Mitchell

ValueList Real Estate Services, Inc.

Jun 02, 2008 05:45 PM #12
Frank Rubi
Frank Rubi Real Estate, LLC - Metairie, LA

Karen, I deposit as many in our industry large dollar check at a time. Then to get told they have to hold the check for five days is crazy. The federal law only requires or allows a bankto hold a check for 24 hours. With computers they know if check are good are not very fast now a days. I deposit a check from a flipper that I owned and was purchasing another property and the bank wanted to hold the money. I went to the branch manager and they ok it for immediate release. I agree with above that I am not tied to any one bank. Screw with me I will go to the next one.

Jun 02, 2008 09:23 PM #13
Harold "Hal" Place
A1 Connection Realty, Inc. - Sun City Center, FL

Morning Karen,

I knew WaMu was aggressive in their fee collection Department, but had no idea they would go to the extent that you just brought to light.

One of my investment property mortgages was placed with them. They offer a bi monthly payment plan to help you save interest and pay off your mortgage sooner...... they only charge X.XX per payment for the service. WHAT! Any other bank would take the option without fee and be happy the payments were that far ahead!  WaMu would never be my bank of choice!

Thanks for sharing.

Jun 02, 2008 11:19 PM #14
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Karen sorry to hear you were ripped off. The actions of companies like this usually catches up with them.

Jun 03, 2008 12:09 AM #15
Jimmy McCall
JimmyMcCall.com - Cunningham, TN
The Ex-Mortgage Consultant

Karen,  Thank you for sharing your experience.  I will never open an account with WAMU because of the way they treated a respected blogger on Active Rain.

Jun 03, 2008 02:22 PM #16
Larry Brewer - Benchmark Realty llc
Benchmark Realty LLc - Nashville, TN

karen - I thought BOA was bad, but I now know another bank to avoid. If you find a good one that is ethical, let us know.

Jun 03, 2008 03:17 PM #17
Thesa Chambers
Fred Real Estate Group - Bend, OR
Principal Broker - Licensed in Oregon

I just had a similar thing happen with a bank I have been with for 15 years - pissed me off big time

Jun 03, 2008 04:06 PM #18
Fran Gatti
RE/MAX Integrity - Medford, OR
Managing Principal Broker - RE/MAX Integrity

I have heard similar stories about WaMu.  I'm glad you went public with your experience.

Jun 03, 2008 06:40 PM #19
Sara Goodwin
Ashcroft & Associates - Portland, OR
Portland, Oregon Appraiser

This just reminds me of how much I love my credit union.

In fact, I just closed out my equity loan with a big bank and transferred it over to the credit union.  It's been so nice not to have to call that bank every month to have them decipher what $ is in which account.  I had such an issue reading their bank statement and it did not include my equity loan information on it.

You have reminded me that I need to pull the rest of the money out of the bank and close it.  I have put it on my 'things to do' list today'. 

Jun 04, 2008 04:35 AM #20
Pippa Mac
Chevaux Group Realtor, The Woodlands and Spring - The Woodlands, TX
The Woodlands TX Real Estate


I had this same thing happen to me in April .. I was soooo livid!  I could not believe how ridiculous they were about the hold.  Just the week before I had deposited in a similar amount and they didn't hold it. 

Jun 07, 2008 04:43 PM #21
Lisa Hill
Florida Property Experts - Daytona Beach, FL
Daytona Beach Real Estate

Wow! That is unbelievable. I've banked with SunTrust for about 12 years and have had NSF charges only twice. Both times were because a check that someone else wrote to me, once I had deposited it to my account, turned out to be bad. The last time it happend, I had 3 debits run through. But when I called the SunTrust, they voluntarily refunded 2 of the NSF fees.

Jun 13, 2008 09:59 AM #22
The Brewer Team - Benchmark Realty
Benchmark Realty - Franklin, TN

I need to change my account soon. THat is a bad business practive.

Jun 22, 2008 03:17 PM #23
Chris Tesch
RE/MAX Bryan-College Station - College Station, TX
College Station, Texas Real Estate

Amazing that they could hold a wire transfer.  I wouldn't even think it would be legal!!!  What a rip off!

Jun 25, 2008 02:00 PM #24
Mike Jones
SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) - Tucson, AZ
Mike Jones NMLS 223495


Thanks for publicizing the scam!  Sorry it had to happen to you, though.

Mike in Tucson

Jun 26, 2008 10:27 AM #25
Keith Webb
Guardant Investments, Inc. - Fullerton, CA


You did not mention it but I will bet you that they also charged you a fee for receiving the wire transfer.  See if that took place as well.  They have more creative ways of gouging than you can  believe.  "We will take your money and charge you for receiving it"  LOL

Jun 27, 2008 10:18 AM #26
Gary Miljour
Lend Smart Mortgage NMLS#207208 - Southern Pines, NC
Mortgage Originator NMLS Licensed in AZ and NC


I just read this post, and you got me a little nervous.  My wife and I also live here in the Phoenix area and banked for over 20 with Desert Schools Federal Credit Union (DSFCU).  During the last 5 years DSFCU customer service had become the worst I saw in a bank in a long time.  We opened up an account with WAMU about 2 months ago.  So far everything has been great.  I just hope it continues.

My opinion on banks however has changed after seeing a very local credit union that was a great bank turn into a big bank. 

Big Banks are a dime a dozen and they all are stinky.  It will be just a matter of time before WAMU screws my accounts up and I will be on my way to the next.  The consumer has to watch the banks like a hawk today and that is very unfortunate.  Thanks for sharing.

Jul 05, 2008 06:44 PM #27
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Karen, Thank God anonymous above commented because it brought your post to the top of Economics of Real Estate. I want to echo Bill Nazur's comment: I hope you're feeling better.

As for the wire transfer, the funds aren't considered good until the time expires for you to "stop" payment on the transfer. Yes, you can have the transfer "reversed" during those three days.

Bill Roberts

BTW WM closed at $1.67 today.

Sep 25, 2008 03:33 PM #29
Jane Page Thompson
Aiken Properties - Aiken, SC

What a ride some of these institutions have had at the expense of the rest of us.

Sep 26, 2008 02:51 PM #30

I think i just decided to never use a bank again .... well perhaps as a place to store money .... but not for your typical checking account uses.

Contrary to popular belief ... you can live without a bank account  ....  we have for years ...

Even easier now with prepaid "debit" or "credit" cards .... whichever they are ... mine says debit but it also says visa ... shrug.

Of course .. we don't have credit of any kind ... 100% cash basis.


PS: How does WaMu "close" at .. whatever amount ... when they can no longer be located registered in any state?

Dec 03, 2008 08:35 PM #31
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