Another bad PenFed customer experience.

[Nords]

I'll post a separate update to the "Geriatric asset allocation" thread, but this specific issue is bad enough to merit breaking it out for PenFed on their own thread. I'm hoping that search engines pick up on this, especially the part about PenFed employee [mod edit] in the Eugene, OR office. Yes, this time I'm naming names. He's earned it. I sure hope we hear a response from PenFed or from PenFed employee [mod edit] in the Eugene, OR office. Because PenFed employee [mod edit] in the Eugene, OR office sure went out of his way to antagonize a PenFed customer.

[Mods, feel free to delete the names if this will cause more problems than it's worth.] [done]

While we've been pursuing conservatorship, I've been piling up Dad's pension & SS checks to put into CDs. Over the coming years I'm going to liquidate most of his equity mutual funds to put his asset allocation at something like 20/20/60 stocks/bonds/cash. Now that I have a court order and a conservator's appointment letter, I've actually been trying to exert my new legal authority. Which appears to be worth a whole lot less than Dad paid for it, but that's also another rant thread.

Three weeks ago I sent my conservator's appointments to USAA & PenFed to establish CDs in Dad's name. USAA let me upload it over their secure website while I had to snail-mail a copy to PenFed.

USAA phoned me a week later and said they were ready. Over the phone(!) we transferred a five-figure sum out of Dad's checking account, and another sum out of his Fidelity brokerage account. I had all the account numbers and Giselle initiated the transfers from USAA's side. They gave Dad 0.86% for a one-year CD and 1.20% for a two-year CD. They're sending me the paperwork, but I can see that the money's already left Dad's other accounts. The whole phone call was under 30 minutes. I sent a BZ to USAA thanking Giselle for her help. I'll be calling her back when we get ready to do more of this.

[Side note: You may be thinking, "Sure, he's a bigshot USAA blogger, they probably have a little asterisk next to his name in the database." Mmmm... I doubt it. Eight million members, only 22,000 USAA employees, and I'm only personally known to about a dozen of them. I doubt a blog with a few thousand monthly hits can move the needle on their public image. True, I've been with USAA for 30 years, so maybe that helps. What I think is really happening is that a significant number of those eight million members are conservators for their aging parents, and USAA has found that it's worth their assets to have a smooth-running process for handling their funds.]

In contrast, PenFed was silent. After two weeks I e-mailed a query, and they said it was still "under review". A week later they snail-mailed me an application package. It said that I had to fill it out as "guardian" (not conservator) and "joint owner". It also asked for, and this is a direct quote, "an original notarized copy of the court documents appointing me as guardian".

By coincidence, that night I got an e-mail that said my PenFed account had been switched to snail-mail statements, and it strongly urged me to switch back to online statements or else start paying the 50-cent fee. After about 10 minutes of trying to figure out the problem on their website, I realized that the e-mail was addressed to "Dad Nords" instead of to me. They'd set up Dad's account but for some reason it defaulted to snail-mail statements-- and then it threatened me. I didn't even have a freakin' login or password for Dad's account, but it was already set to start accruing a negative balance.

I e-mailed PenFed and asked them to send me the correct paperwork and not charge me for snail-mail statements. Three days later I hadn't heard from them so I called the phone number on the snail mail. I asked for the guy who signed the letter, [mod edit], and got one heck of a defense from "Bob" in Bangalore the call center rep. He didn't want to pass me on to [mod edit] until I'd handed over my member number & Social Security number for ID verification and then described the full problem. I said that I'd swapped e-mail and letters with [mod edit], I was returning [mod edit] call to complete [mod edit] paperwork, and I didn't want to start all over. After 10 minutes of debate I was put on hold. After 10 minutes on hold, I was told that [mod edit] wasn't available. I asked to speak to a supervisor, and was put back on hold. 10 minutes later [mod edit] came on the line.

He hadn't read my e-mail of three days earlier. I caught him up. I explained that I was a conservator, not a guardian, and not a joint owner but merely a fiduciary.[mod edit] said "That's just the way we need you to fill out the paperwork, it doesn't matter, the courts don't care, we do it this way all the time." (Apparently PenFed's Oregon employees are also experts on Colorado probate courts.) I said that I didn't want to have any problems with the courts and that I'd be correcting PenFed's paperwork with the appropriate verbiage. He said "Our website's set up to show that you're the guardian and the joint owner. That's the way we do it."

I gave up, and I decided not to even talk to him about PenFed's request for a "original notarized copy". I said "Thanks, I think I'm going to pass on this." [mod edit] shot back "You know your conservator's letter is only good until March, so you'd have to fix that too before we let you sign up for a CD." Well, thanks for letting me know. (The appointment letters are only good for a year so that the courts will get their annual reports on time and then re-issue the letters.) I told [mod edit] that he'd been quite enough help, thanks, I wasn't going to do it. [mod edit] said "Well, OK, but we do this all the time and that's how the system works." Yeah, fine, noted. They were offering 1.16% on the one-year CD and 1.25% on the two-year, but there's no way I'm going to sign on for that hassle.

So I'm going to load Dad up with USAA CDs, and if I reach the FDIC limit I can also go back to his small-town bank for their rockin' 0.50% CDs. But I don't think I'll be calling PenFed again.

In PenFed's defense, they've always been long on good rates and short on customer service infrastructure. You get exactly what you pay for, and if you need something off the beaten path then you're unlikely to get superior staff assistance. I would have been disappointed with mere incompetence, but I wouldn't have been surprised. However I never expected a lecture.

[braumeister]

A very unfortunate experience, and you're right to be honked off about it.

FWIW, I've never had anything but wonderful customer service from PenFed, whether online, on the phone, or by post. And that covers a wide range of transactions, financial instruments, mortgages, etc., etc.

[JOHNNIE36]

Quote:

Originally Posted by braumeister A very unfortunate experience, and you're right to be honked off about it. FWIW, I've never had anything but wonderful customer service from PenFed, whether online, on the phone, or by post. And that covers a wide range of transactions, financial instruments, mortgages, etc., etc.

Apparently you have never dealt with [mod edit] in the Eugene, OR office.

[Wendy]

Nords, thanaks for taking the time to post your experience. Based partly on your and other's previous accounts of problems with PenFed, I decided to refi at my local CU. The rate at PenFed is fractionally smaller but the potential hassle and delay isn't worth it. The CU can close quicker, which means a larger savings up front when my old mortgage is retired sooner.

I spoke to both loan groups on the phone while researching this, and while I got one rep at PenFed that was good, the other one was a bit antagonistic and not really helpful. I've only had good experiences with my CU.

In general, I find the "peace of mind" factor to be worth something when undertaking a major financial transaction, at least to me.

[brewer12345]

Nords, I would send a letter to the president of the credit union. They should know about this.

You are making me glad I found a backdoor to sneak into Navy Fed.

[Nords]

Quote:

Originally Posted by brewer12345 Nords, I would send a letter to the president of the credit union. They should know about this. You are making me glad I found a backdoor to sneak into Navy Fed.

Your Navy Fed membership was a real coup.

You think PenFed would do anything about this recent incident? I've gotten skeptical of letter-writing campaigns, but you know how they'd react better than I do.

[Texas Proud]

I will give you a story about them that amazed me...


My sister wanted to refi her house... did all the paperwork, paid them a fee etc. etc.. it took them a long time, but eventually they closed and paid off her old mortgage....

Then they call her and say 'We can not do the refi because you already had a refi and took money out when you did it'....

DS Well, yea.... it is in the paperwork sent to you... did you not read it

PF: Well, you need to get another loan, we do not handle cash out mortgages

DS: What about all the fees I paid? I will have to pay them again for a new loan.

PF: Not our problem.

DS asked me and I said, 'what are they going to do if you do not get another loan?'... heck, it is their mistake, make THEM fix it... which she did...

They did get with the previous mortgage company and was able to get her loan back to where she was and did refund all her expenses... she was able to refi with the original servicer, but not at the lower rate she had with PF...

Still, she uses them for CC and I believe an account....

[brewer12345]

Quote:

Originally Posted by Nords Your Navy Fed membership was a real coup. You think PenFed would do anything about this recent incident? I've gotten skeptical of letter-writing campaigns, but you know how they'd react better than I do.

Your alternative is a complaint to their regulator, the NCUA. Banking regulators are generally required by statute to address every complaint they receive about an institution, even the ones that are patently crazy.

I'd basically re-cut your post, drop it into a business letter format and send it to the President of the CU. Minimal effort. Mention that you have been a customer for some time, etc.

Back when Schwab was busy running all of its middle class customers out the door by raising minimums, instutiting new fees for the little guys, etc. in a foolish quest to try to run with the private wealth management shops of the world I got PO'd enough to write a letter detailing why I thought they were being stupid and indicating that they were basically on teh verge of forcing me to take my business elsewhere. I must have not been the only letter writer because within 6 months Chuck took the reins back from the boob who was ruining the business and went back to catering to everyone

[REWahoo]

Based on the stories I'm reading here and my daughter's abandoned attempt to get anything resembling adequate customer support in her attempted mortgage refi at PenFed, it looks pretty obvious they have become victims of their own success. My business with them is now limited to a credit card, which I may cancel (or simply stop using) if they continue cutting the associated rewards program. One more example of how it is very difficult for any business to grow rapidly and continue to provide the quality of products and services responsible for that growth.

[brewer12345]

They won't be my first choice to refi the mortgage. That said, if they are competitive on simple stuff I can do entirely on-line (CDs, etc.), I will continue to use them.

Navy Fed made my recent auto loan refinancing a breeze. That said, they are old fashioned in how they do things (took my piddly car loan in front of their credit committee before approving it, amazingly), so I don't exactly know how fast they will be.

[ziggy29]

Quote:

Originally Posted by REWahoo Based on the stories I'm reading here and my daughter's abandoned attempt to get anything resembling adequate customer support in her attempted mortgage refi at PenFed, it looks pretty obvious they have become victims of their own success. My business with them is now limited to a credit card, which I may cancel (or simply stop using) if they continue cutting the associated rewards program. One more example of how it is very difficult for any business to grow rapidly and continue to provide the quality of products and services responsible for that growth.

Indeed. And this is part of the reason why a lot of legacy USAA customers were concerned about opening membership to *all* honorably discharged veterans; the fear was that the influx of new business might either make the offerings less competitive or, at the very least, water down customer service.

[REWahoo]

Quote:

Originally Posted by ziggy29 Indeed. And this is part of the reason why a lot of legacy USAA customers were concerned about opening membership to *all* honorably discharged veterans; the fear was that the influx of new business might either make the offerings less competitive or, at the very least, water down customer service.

+1

And we've been watching very closely to see how things play out. From my standpoint, so far, so good...

[JPatrick]

Quote:

Originally Posted by Nords In PenFed's defense, they've always been long on good rates and short on customer service infrastructure. .

Yeah, that sentence pretty well sums up my feelings about them.
Over the years I've bought a few CD's and financed a couple of cars simply because the rates were superior....but let there be a tie with another institution and it is aloha PFCU.
Keep up the good fight Nords.

[JPatrick]

Quote:

Originally Posted by ziggy29 Indeed. And this is part of the reason why a lot of legacy USAA customers were concerned about opening membership to *all* honorably discharged veterans; the fear was that the influx of new business might either make the offerings less competitive or, at the very least, water down customer service.

+2

[Nords]

Quote:

Originally Posted by brewer12345 I'd basically re-cut your post, drop it into a business letter format and send it to the President of the CU. Minimal effort. Mention that you have been a customer for some time, etc.

Cool. I'll give it a try.

Quote:

Originally Posted by brewer12345 They won't be my first choice to refi the mortgage. That said, if they are competitive on simple stuff I can do entirely on-line (CDs, etc.), I will continue to use them.

Exactly. Now they hold our mortgage, our HELOC, and a bunch of CDs for our ER portfolio and our daughter's college fund. All largely accomplished online, and the less human intervention the better.

[Katsmeow]

Quote:

Originally Posted by Texas Proud I will give you a story about them that amazed me... My sister wanted to refi her house... did all the paperwork, paid them a fee etc. etc.. it took them a long time, but eventually they closed and paid off her old mortgage.... Then they call her and say 'We can not do the refi because you already had a refi and took money out when you did it'.... DS Well, yea.... it is in the paperwork sent to you... did you not read it PF: Well, you need to get another loan, we do not handle cash out mortgages DS: What about all the fees I paid? I will have to pay them again for a new loan.

Based on your name...is your sister perhaps in Texas? Texas has many restrictions on anything that is considered a home equity loan such as a cash out refinance. Once you do a cash out refinance my understanding is that all future refinances of that property -- even if you don't take out money -- are considered as subject to home equity loan rules under Texas law and are treated as if they were cash out refinances (even if no cash comes out).

In some research I was recently doing I came across something indicating that Penfed doesn't do Texas home equity loans because it doesn't want to have to deal with the Texas requirements. (Don't know if that is true or not but it is what I read).

[Dawg52]

Quote:

Originally Posted by brewer12345 That said, if they are competitive on simple stuff I can do entirely on-line (CDs, etc.), I will continue to use them.

Yeah, I don't have any refinancing or semi-complicated stuff to do so they suit my needs. I've been with PF for 6 years and have had maybe 2 phone conversations with them.

I had something similar with Fidelity a couple of years ago. I was going to move my mother's account to them, but it was going to require more i dotting than I wanted to fool with. Stuff I didn't have to do to get it set up with her current brokerage firm. So I left it there. The Fidelity rep I talked to was nice however.

[East Texas]

Like Nords, I've been with USAA for a little over 30 years. I've seen changes - good and bad. Maybe a bit of a history lesson would be of use since there are comments about the expanded membership.

USAA made a decision a long time ago not to expand the business just to get more business. The opening of the membership to "all who have honorably served" appears to be a well-thought out program with a seamless transition.

I realize most of the legacy members like the eliteness of being a USAA member. Most of you don't know that ex-spouses and children were not allowed to continue their USAA insurance once they were out on their own. McDermott didn't think that was right because these kids were brought up under the USAA name and should be able to continue getting USAA insurance (and products). There is a distinctive difference between being a USAA member and an ex-dependent - USAA members get SSA.

Fast forward 30 to 40 years and the USAA CEOs (more so Herres and Robles) were constantly asked why retired officers (you initially had to be active duty to establish membership) were excluded from membership. That change was made. And it made sense.

Next came the former officers with honorable discharges and right behind them was the enlisted issue. Both groups honorably served their country. The enlisted stood shoulder-to-shoulder with the officers during war and peace.

I think all of us stood back and watched the enlisted swelling the ranks of the USAA membership to see if it would have any impact on anyone who has been a long term member. I haven't been impacted at all. USAA isn't going to put up with bad business so no matter what the eligibility. If someone is an underwriting or financial risk to the membership, they're out. Same with an employee. If any employee breaks one of the core values and they're fired.

I still believe USAA membership is an elite community. I believe they try their best to do the right thing at the right time for the right reason. USAA makes it easy for me to do business with them and that has value.

[REWahoo]

Quote:

Originally Posted by East Texas I still believe USAA membership is an elite community. I believe they try their best to do the right thing at the right time for the right reason. USAA makes it easy for me to do business with them and that has value.

I'm not sure I can agree with your "elite community" comment - after all, they let me in.

But I do agree USAA membership has value, especially if you do business with them long enough. I just received my second "Senior Bonus" distribution from my Subscribers Savings Account. Nice, very nice.

[East Texas]

Oh, that hurts.... I'm not eligible for a senior bonus yet.

<sidebar> I've got the grasshoppers saddled.... should we mosey your way to help brand the chiggers?