More Bad News From The Trenches of Ken Lewis' Hapless BofA

Due to a seeming nearly-endless succession of mergers, the very small local bank at which I opened a DDA account years ago is now....BankAmerica.

Thus, I am now subject to the operational mishaps of one of the nation's three largest banks. To wit, I recently received a 'letter,' i.e., mass-mailed notice/apology, which begins thusly,

"Dear Valued Customer,

We have learned that some information from certain Bank of America Check Cards may have been compromised. your Check Card number may have been part of this compromise. To ensure that your privacy is protected to the best of our ability we have taken the following steps.

Please know that Bank of America is working hard to keep your financial information secure.

Sincerely,

Gordon Rains
Debit Card Services Executive"

I omitted the detailed middle of the letter, wherein instructions were provided for using the new card, reporting fraudulent use of the old card, and assuring me that BofA will be liable for all fraudulent charges due to their ineptitude. Except, of course, they didn't use that word. I did.

And notice their use of the word 'compromise.' Sounds innocent, doesn't it? Not 'loss,' 'theft,' or 'error.'

This letter is why I like to use what I call "Danforth's Rule." Years ago, a colleague of mine at Chase Manhattan Bank by that name first enunciated the principle thusly,

'Find the smallest bank in your town and open a DDA account there. Chances are, because they are small, they will treat your account, financial information and business much more carefully than the local branch of the largest bank in the area.'

This is why I strode into my town's branch of BofA yesterday morning. Looking for a platform officer, I waited more than ten minutes for one to manage to notice me and offer to help me.

I thereupon showed her the letter and asked for details of BofA's latest 'compromise.' She had no clue. The officer, one Ms. Gonzalez, had no idea to what event the letter referred.

I pointed out that, while I was not angry with her, it didn't look good that some national Debit Card executive down in Charlotte had flooded the bank's customers with this missive without bothering to give the local branches a 'heads up.'

Or coordinated with the branches, so that the letter, or a phone call, or any communication, would come from a local branch officer, rather than some unreachable, unknown name in some unmentioned location.

I explained to Ms. Gonzalez that this 'compromise' seemed, to me, to be a fairly serious breach of one of the most basic functions a bank undertakes- safeguarding my money.

What the letter meant, I went on, was that BofA had effectively left the door to the vault open one day, and let strangers wander in to take money. They promise they'll make good on any losses, but, still, you probably wouldn't want your assets safekept in a bank that lets strangers raid the bank vaults, would you?

Ms. Gonzalez agreed that this is a serious matter. I further noted that one of the smallest local banks around, of which I happened to have been a very satisfied customer years ago, had recently opened a branch in town. Did she want me to transfer my business there, or would she like to arrange a meeting between me, her and her branch manager?

She agreed to take my contact information, a copy of the letter(!), and respond to me with a time and date to meet.

For what it's worth, as I write this on Wednesday afternoon, that has not occurred.

Meanwhile, I read that last line in Mr. Rains' letter, and shake my head when I note that, having already released my DDA account information to strangers, now Ken Lewis' crack troops promise to do a better job, 'working hard to keep (my) financial information secure.'

Why do you suppose they chose not to work so hard before? Wasn't it worthwhile? Was it too expensive? Or just a nuisance?

Ken Lewis, BofA's CEO, has had a lot of challenges in the past year- buying a failing Countrywide Finance at probably too-high a price, experiencing serious capital markets losses, and, now, presiding over a consumer bank and IT function that can't even manage to properly execute one of banking's most fundamental functions- safekeeping customer deposits.

Not too impressive a job Ken's doing, is it?