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Revenge from the abuses of my bank November 24, 2007

Posted by dorigo in personal, politics.
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Banks -at least in Italy- are little short than criminal associations. They offer a poor service to private customers, and in exchange they get to steal money from their accounts every time they have a chance – by changing the rules of the account, lowering the interest rate every other day, charging fees for anything conceivable, delaying the crediting of bank deposits, and in a number of other ways. As a private citizen it is really hard to defend from these practices, but one cannot live with no bank account these days, so each of us soon learns to accept the abuse and bow his or her head. The robbery, although nasty, is usually on small change, and one can well ignore its effect on one’s own pockets, although it is hard to swallow the abuse.

In addition to these practices, one sometimes gets to touch with one’s own hand the total disdain of the bank for their clients’ interest. Just to mention one case, last year Deutsche Bank deduced from my account more than 3000 euros, leaving me with a negative balance – and without a warning!, because INPS, a government institute that used to pay the retirement salary to my father, had fallaciously requested a refund (we did not owe them a cent). The bank paid the sum without letting me know, as if I had signed a blank check! It was only through threatening a legal action that they agreed to refund me without waiting the government to acknowledge the mistake.

While they act this way with their less important customers, banks use to grant huge loans to industries and businesses with ridiculous warranties in return, often getting the worst of it when their credits cannot be recovered. If you are asking for a loan they will turn you down, unless it is a seven digit one. In Italy we sure have mafia and camorra, but much worse is the delinquent link between politicians, bankers, and businessmen which is emerging only recently through bankruptcy cases much like what has been happening in the US a few years ago.

For a serene life it is better to ignore this annoying reality. However, if one ever has a chance to get revenge, one should take it fully and make sure to enjoy every bit of it. That is what luckily happened to me very recently.

I have a loan from Deutsche Bank, where I have had a bank account for the last fifteen years. I got it three years ago when I remodeled my new house: 200,000 euros – little short of 300 grands-, to be given back in 20 years. Getting a loan was a sound thing to do back then, when interest rates were very low. However, the latter have since almost doubled, and the loan is now costing us more money than we find reasonable. I was able to reduce the amount of the debt to 100,000 euros recently by making a partial refund with some money that had poured on my head in the meantime, and then started to investigate whether a renegotiation of the loan with other banks would allow a reduction of the interest rate.

I soon discovered that Unicredit -another pond full of sharks, so to speak- would reduce by 0.3 percentage points the interest with respect to my original loan; a friend of mine works there, and he explained to me things the way they are, with no frills and fine prints. The conditions were favorable, so I made a phone call and told Deutsche Bank I was going to close the account with them, leave them for good, and transfer the loan, unless they would lower the interest rate: could they please make their best offer ? They could, and they would call me back.

They answered after three weeks of silence, calling me on the phone to say they could reduce the interest rate by 0.1% -as if they were doing me a great favor. I answered bluntly: fine, I found another bank which lowers it by two more points, so I will be happy to close everything in a few months, just give me the time. After that phone call they waited much less time to call again: a week later they called me again to announce they had been authorized to lower the rate by 0.3%, matching the offer of the other bank. I then said, fine: I would face some expenses if I transferred everything to Unicredit, so I will stay.

But the devil is always in the details: I soon learned that to change the interest rate Deutsche Bank would require a formal intervention of a notary, which would cost me 600 euros. That upset me since I knew other banks do not require that, and allow the modification to be described in a private document that is exchanged between the bank and the client. I requested the bank to check whether they could waive the fomal act through the notary, and the vice-director agreed to try it.

I went to visit the vice-director a couple of weeks ago, and got the news that my request had been turned down, because “the bank has to make things correct formally, to reduce its risks”. That made me snap. I said I was fed up with them and their politics of feeding notaries by forcing their clients to spend inordinate amounts of money to register even the most insignificant agreement. I said that it was up to them to decide whether they wanted one client more or one client less, and that I found outrageous their bullying the less wealthy customers while they bowed to every wink of larger businesses. I said plainly what I thought of the bank and its practices: misdemeanor was an euphemism. I said that forcing a client to throw away 600 euros in a useless piece of paper was a tell-tale sign of how little they cared for their customers’ interest. The vice-director and his colleague had to listen to it all, and could not even reply – they knew I was right.

At the end of my tirade I gave them an ultimatum: either they accepted to renegotiate the loan with no notary act, or I’d wave bye bye. The vice-director then said he would check again with the central offices, but he had to say he would in earnest hope the request would be declined again, because otherwise he would feel quite embarassed. I replied I could not care less, and left. Behind the polite mannerism and the slightly shaded eyeglasses, I could feel the irritation in the vice-director’s eyes.

Last night, I was waken up by his call. He did not know I was in Chicago and expressed his excuses for disturbing me in the middle of the night, but he was pleased to announce that the central offices of Deutsche Bank in Milano had agreed to waive the notary act. I was sorry for the guy, torn between sharks and angry customers.

So, in the end I got what I wanted: a lower interest rate, and no further expenses. And in the meantime I was able to dump all my anger and disgust at the way banks behave with customers, in an occasion when they could not help but listening to me. Admittedly a redundancy, but a very sweet one. This only confirms what I have known for a while: banks (and insurance companies, I may add) are weak with the strong, and strong with the weak. Just put your balls on the table with them and you’ll see their tail immediately hide between their legs.

Comments

1. Alexander W. Janssen - November 24, 2007

Oh man, and I thought that Deutsche Bank is evil in homeland Germany. But what you’ve just described is madness🙂

I remember, when went to the army Deutsche Bank wanted to take away my usual EuroCheque Card (Maestro nowadays) because they knew a soldier’s salary is crap.
I told them that I need the card, not for the reason that I want to withdraw enormous amounts of Deutschmark, but because I need to withdraw money from any ATM – not only from Deutsche Bank’s ATMs. Over here it’s still like that, that you can’t withdraw money from other bank’s ATMs if you only have a regular non-Maestro/Visa/Whatever-card issued by your bank. And the place where I’ve been was literally in the middle of nowhere – and no Deutsche Bank in sight for 50 km.

So I had to leave Deutsche Bank and chose the other evil, I went to Citibank. At that times they didn’t give a damn what customers to accept, the accepted literally everybody and started to throw loans after people… And I got an EC-card again.

However: Good move. Never forget, you’re not the obeying subject, but a paying customer. Don’t let em treat you like that.

Cheers, Alex.

2. Guess Who - November 24, 2007

In finance speak, banks with big retail customer bases are known as “asset aggregators”. Meaning their purpose in the financial ecosystem is to gather all those puny little streams of money into large pools which can then be poured into great investment ideas like Enrons, mortgage backed securities and miscellaneous structured investment vehicles…😉

3. DB - November 24, 2007

I think you miss one essential point. It costs a lot more money to service small retail customers like you. The better deals large clients get is little different to the good old volume discount. Buy in bulk and you’ll get a better deal.
The strong versus weak analogy is attractive but wrong. It always boils down to margin earned per customer.
What your example shows is the agility of the intelligent price shopper. You may be a small fish but you can dart around some of the silly obstacles put in your path.
Unfortunately (but fortunately for the banks), when it comes to finance, most people are sheeple. For every Tomasso, there are a hundred Ovinis!

4. Guess Who - November 24, 2007

Oh, come on DB (Deutsche Bank?).😉

These days, “servicing” a bank customer amounts to little more than keeping a database up to date, and you can even make the sheeple do most of the work themselves through the web. It’s the best business imaginable, as long as you can find investments generating a decent margin above the interest you pay into the sheeple’s account.

5. dorigo - November 24, 2007

Hi Alex, interesting – I did not know the way DB is perceived in Germany… I gather it’s the same soup everywhere. What a shame to deny a card to a customer based on their predicted income!

Yeah, GW, asset aggregators… I would call them organized crime, it is less euphemistic. Organized crime of the most fruitful kind also, and very little risk.

DB, I learned from my father long ago how to deal with banks – he did not have much money, but a strong sense of moral rectitude which always got him outraged by the insolence of banks. So in that sense I am “smart”… And I think I agree partly with you and partly with GW: servicing customers costs money because of the infrastructures and the personnel, not because of the services the bank provides; of course the bank tries to make money from both small and big fish, but there is a difference: with big fish there is often a criminal collusion.

Cheers,
T.

6. carlbrannen - November 24, 2007

Having spent the last few months setting up a loan for 30 million dollars, (which has not yet closed) I agree a little with Tommaso that these seem to be easier than the smaller loans in certain ways. However, in general, I would bet that the easy way to get a loan from a bank, big or small, is to begin with a friendship with a banker. We had no such friend and we’ve had to jump through quite a few hoops. The fact that the US is going through a bit of a banking crisis probably doesn’t help.

7. Juan - November 25, 2007

Hey Dorigo, I’ll tell you where you guys are getting the real shaft in Europe: variable interest rates. As you know the option (unfortunately) exists in the US, but the default mortgage is a 30 yr *fixed* rate, no penalty for early payment. No nasty surprises there. If you can afford it to start with, it (normally) will only get easier. My understanding is that obtaining something like that from a bank is pretty close to impossible anywhere in the EU.
Due for another revolution…

8. Juan - November 25, 2007

PS: there is an impending social crisis in Spain because of this mess with the variable rates… everyone went buying a few years ago, and now nobody can afford the payments any longer. It is going to get much worse before it gets any better. A real tragedy, and the only explanation I can find is even more greed on that side of the Atlantic.

9. Pioneer1 - November 25, 2007

For a serene life it is better to ignore this annoying reality.

The situation with banks is not much different here in the US.

But reading your story, I cannot but think that as an amateur looking at the professional physics industry I feel the same way you feel towards the banks. Although the situation may be even worse because physics industry does not have clients or customers and it is not regulated. The way banks have monopoly on money, physics industry has monopoly on human knowledge.

I guess that individual physicists may feel badly about the situation as the director of the branch who had to deal with the headquarters to get a better deal for you. And I will take your advice for a serene life and not worry anymore about banks, insurance companies and physics industry.

10. Frank Wilhoit - November 26, 2007

You’re on track to find out what happens when an infinite capacity for taking offense is distributed over a finite number of service providers.

11. dorigo - November 26, 2007

Hi Carl,
wow, are you into that ethanol plant project ? It looks like a huge business. Being friend with bankers usually help, yes – another of the fallacies of the system.

Juan, it is true that fixed interest loans are safer for customers, but in principle they also are a gamble; I would venture to say, a safer bigger gamble. One gambles that interest rates will go up, because if they go down and stay there the loan will cost much more than it could have. If one can afford to enter and exit without hassle, variable rates are better. However, I do know that it has become a social plague in Spain and also in Italy and other countries.

Pioneer, well, there is a difference. The service Sciences have to provide to customers is not to give them a briefing every week, but to provide them with the fruits of the advanced understanding. As far as particle physics is concerned, one does not have a lot to show, admittedly: it is pure research and it is doubtful whether it produces constant dividends. But you get them when you go to take a CAT scan, you get them when you do hadron therapy, you get them when your smoke detector goes off.

Frank, intriguing concept – I think I know what is going to happen. They will take it personally and find a way to get revenge. But I will leave them before it happens😉

Cheers all,
T.

12. Matteo Martini - December 3, 2007

Tommaso,
the 3000 euro scam has been done by which government?
Prodi` s or Berlusconi` s?

13. dorigo - December 3, 2007

Hi Matteo,

well, the scam was not really a scam, just a annoying way to work by INPS. They ask for money back first, then check if they got them back already. I found out they have two different offices, one which receives refunds, and another that computes the balance and asks for them. And the two offices do not share the data !!!!!

Of course, had I not insisted with my bank, I would be still waiting for the refund… In any case, the thing happened last december, so it was during Prodi’s government.

Cheers,
T.

14. Matteo Martini - December 3, 2007

Hi Tommaso,
exactly my point.
Little has changed from Al Capone` s government to Prodi` s.
However, just my opinion

Well, not only mine ( http://www.beppegrillo.it )
Eh! Eh!..

15. dorigo - December 3, 2007

Hi Matteo,

actually I think you are dead wrong on this one!

The Prodi government has started a procedure to pay back the credits of taxpayers, for the first time in more than ten years. I received three tax refunds, relative to 1996, 2001, and 2002, in the matter of a month, two months ago. And I hear I am not alone: many are receiving their long overdue payments.

Therefore, your conclusion is a bit too quick.

Cheers,
T.

16. Matteo Martini - December 4, 2007

Tommaso,
why there are still 3 televisions of Berlusconi running, banning all the other competitors from having one?
Why are Luigi de Magistris and Clementina Forleo still attacked by the media and by the left winger Mastella ( their Minister of Justice ) with any defense from Npolitano or Prodi?
Why did Mastella ( the Italian Minister of Justice ) went to be the witness at the marriage of a Mafioso??!! ( yes, impossible to believe but true )
Is Mastella part of which coalition?
Why we have still so many lobbies in Italy ( first of all, the lobby of the ” notai ” )?
What is Prodi doing?
What is Prodi doing for beating Mafia on the South?
Why did D` Alema ( Foreign Minister ) take part in the Unipol affair?
Why there are still 24 convicted in the Italian parliament with neither Bertinotti nor Marini ( Presidents of Camera and Senato ) doing nothing for sacking them?
..and the list continues..

17. Matteo Martini - December 4, 2007

Errata

with any defense from Npolitano or Prodi?

Corrige

withOUT any defense from Napolitano or Prodi?

18. dorigo - December 4, 2007

Matteo, some of your points are more nagging and some are less – for instance, there will always be a Mastella in the italian system, unless you kill him, and you can’t really do politics by saying “I do not like the face of that guy so I will refuse his political support” – unless you have a strong reason – like a real charge of mafia, not a kiss to a cheek. Your list is unfortunately a bit disingenuous. Examples:

– Bertinotti and Marini have no power to fire anybody.

– D’Alema may be a rotten apple, so what is your problem ?

– That won’t be the first nor the last of Mastella’s events with mafia members. Does that mean we should not try to support a government IF they were trying to do good things for the country ? Or is your stomach too weak to admit that politics is compromise, always, everywhere except in dictatorships ?

– Berlusconi’s 3 networks are very hard to turn off. I also am angry for the political ineptness of the Prodi government: it was something to do in the first 100 days, when he was not risking much. Now, however, he would not manage to take a network off Silvio, and while trying to do it he would fall and we would be voting again. Is that what you want ? You will soon get it anyway, so don’t bitch too much about it.

What I am trying to say is: you are a dreamer. Nothing short of a revolution can change some of the things you mention – but while changing for good those things, it will bring quite a few unwanted features with it. We can discuss on what kind of peaceful revolution you would suggest, but it is far too easy to instead sit in the corner and say “I don’t like this, that is a shame, look at that one, blah blah” and in the meantime propose nothing for how this country could change democratically.

You know very well the problem. Now tell me, in earnest, which political party you would like to get 51% of the votes alone at the next elections. 51% to Di Pietro ? He would bring so many shady figures in (such as the horrendous De Gregorio) that we would have a worse version of DC. 51% to the green movement ? That would also be quite dangerous. 51% to Rifondazione ? That would be interesting to look at, but do you think they would be able to govern the country alone, without creating injustices of their own ?

Democracy requires the confrontation of ideas. Do you like the system ? I do. The implementation is far from perfect, but that is not Prodi’s fault.

We are within a system which can’t be totally overturned. Within the system, if you decide to be a player and not an angry by-stander, there are things you can change and things you can’t, depending how strong your coalition is. Prodi’s government is full of ex-P2 members, but there are more in the other coalition. It could get better if the parties supporting Prodi were collectively stronger -since they could then dispose of unwanted blackmailers like Mastella- but not much better. But some laws would be easier to bring to the parliament without risking the government itself on them.

The center-left government today needs to accurately pick its battles. No room for fighting all of them. Only very few, over which there is a widespread consensus within the variegated coalition of forces. It is as good as it gets with a +24000 votes margin.

Cheers,
T.

19. dorigo - December 4, 2007

Oh, and concerning tax refunds and tax payments, I would like to add one thing that you probably overlooked.

Have you noticed that for the first time people are paying their taxes ?

I’m not kidding. With Prodi as prime minister, people have gotten scared and have started to pay more of their due. Sure, there are still tons of people not paying any, but things are definitely improving.

The Prodi government can be credited for having started, for the first time in Italy since I am around, a capillary investigation on tax fraud. I myself have been questioned on my declarations, from two different offices and via two different methods: on one side, the computation of taxes due was controlled very carefully with the aid of all information available, and I was questioned on my certifications (I actually was unable to provide one of the 63 sheets with which INFN pays my per-diem in foreign missions, for 2002!, and had to pay 80 euros of penalty). On the other side, they look at the things you buy, and check if you are supposed to have the availability of funds. They questioned a purchase of a 30,000 euro car in 2003, claiming I was not supposed to have that sum available, and I had to produce bank account summaries from 2000 to 2004 to demonstrate I had the money to buy the car, and the money was coming from legitimate transactions.

Just one small datum on which I trust you will be satisfied with the actions of the Prodi government.

Cheers,
T.

20. Matteo Martini - December 5, 2007

Hi Tommaso,
my replies below.

Matteo, some of your points are more nagging and some are less – for instance, there will always be a Mastella in the italian system, unless you kill him, and you can’t really do politics by saying “I do not like the face of that guy so I will refuse his political support” – unless you have a strong reason – like a real charge of mafia, not a kiss to a cheek.

Matteo:
The list of Mastella ” good actions ” is pretty long, just one new fact here:

Il giornale di partito il Campanile è stato oggetto di diverse indagini giornalistiche che ne hanno evidenziato la funzione “privata”. In altri termini oltre un milione e trecentomila euro di finanziamenti pubblici (stando al solo 2005) sono serviti per pagare il contributo fattivo di Clemente Mastella [13], viaggi e trasferte della famiglia Mastella (98.000 euro nel 2005), liberalità e spese di rappresentanza (141.000 euro), liberalità (22.000), pacchi, dolciumi e torroni (17.000).

Sorry, written only in Italian, it is about one of the list of miscondupt against the ” Ceppalonico “.

BTW, Mastella did not just give a kiss on the cheek to Campanella, but Campanella is ( was? ) also the leader of the Youth of Mastella` s UDEUR party, kind of his right hand.

Clemente Mastella and the President of the Sicilian Region Salvatore Cuffaro were involved in a scandal when it was found that they had been the best men of Francesco Campanella, a former member of the Mafia that helped the boss Bernardo Provenzano during his absconding. In July 2000 Mr Mastella was a witness at Campanella’s wedding.[1]

http://en.wikipedia.org/wiki/Clemente_Mastella

And this guy is the Minister of Justice of Prodi` s government

Tommaso

Your list is unfortunately a bit disingenuous. Examples:
– Bertinotti and Marini have no power to fire anybody.

Matteo
They are the presidents of Camera and Senato.
In Italy, you can not assume any public office if you have been convicted, but there are 24 people in Camera and Senato, that have been convicted and they are still there.
Not Prodi, not Napiolitano ( President of Republic ) not Bertinotti and Marini did spend much words on this scandal

Tommaso

– D’Alema may be a rotten apple, so what is your problem ?

Matteo

That the list of rotten apples in Italy` s current government seems to become quite long..
Look at what the wife of ex-minister Dini did:
http://www.repubblica.it/2007/12/sezioni/cronaca/donatella-dini/donatella-dini/donatella-dini.html

Tommaso

– That won’t be the first nor the last of Mastella’s events with mafia members. Does that mean we should not try to support a government IF they were trying to do good things for the country ? Or is your stomach too weak to admit that politics is compromise, always, everywhere except in dictatorships ?

Matteo

There are limitations to compromises.
Having a Minister of Justice that has one of his best men connected with the Mafia, is too much for me, honestly.
BTW, Campanella is not the only one, other guys of the UDEUR are connected with Mafia

Tommaso

– Berlusconi’s 3 networks are very hard to turn off. I also am angry for the political ineptness of the Prodi government: it was something to do in the first 100 days, when he was not risking much. Now, however, he would not manage to take a network off Silvio, and while trying to do it he would fall and we would be voting again. Is that what you want ? You will soon get it anyway, so don’t bitch too much about it.

Matteo

There are sentences that would put Rete4 on satellite, they just need to apply the sentences, nothing more

Tommaso

What I am trying to say is: you are a dreamer. Nothing short of a revolution can change some of the things you mention – but while changing for good those things, it will bring quite a few unwanted features with it. We can discuss on what kind of peaceful revolution you would suggest, but it is far too easy to instead sit in the corner and say “I don’t like this, that is a shame, look at that one, blah blah” and in the meantime propose nothing for how this country could change democratically.

Matteo

I am not saying that Prodi is not better than Berlusconi, at the same time, that I would say that it is better being severely injured by a bomb than killed.
All politicians in Italy are thieves ( with some exceptions ), maybe, in the right wing, there are more thieves..

Tommaso

You know very well the problem. Now tell me, in earnest, which political party you would like to get 51% of the votes alone at the next elections. 51% to Di Pietro ? He would bring so many shady figures in (such as the horrendous De Gregorio) that we would have a worse version of DC. 51% to the green movement ? That would also be quite dangerous. 51% to Rifondazione ? That would be interesting to look at, but do you think they would be able to govern the country alone, without creating injustices of their own ?

Matteo

De Gregorio has been sacked by Di Pietro
Di Pietro is one of the few politicians ( the only one ) I have still faith on..
I am not either saying that Di Pietro should have 51% of the votes, I am just saying to you not to be too enthusiastic about Prodi and his government.
In any good country, those people would not be allowed to do politics

Tommaso

Democracy requires the confrontation of ideas. Do you like the system ? I do. The implementation is far from perfect, but that is not Prodi’s fault.

We are within a system which can’t be totally overturned. Within the system, if you decide to be a player and not an angry by-stander, there are things you can change and things you can’t, depending how strong your coalition is. Prodi’s government is full of ex-P2 members, but there are more in the other coalition. It could get better if the parties supporting Prodi were collectively stronger -since they could then dispose of unwanted blackmailers like Mastella- but not much better. But some laws would be easier to bring to the parliament without risking the government itself on them.

The center-left government today needs to accurately pick its battles. No room for fighting all of them. Only very few, over which there is a widespread consensus within the variegated coalition of forces. It is as good as it gets with a +24000 votes margin.

Matteo

This is not the only problem, and you are failing to see where the problem is.
The porblem is that the center-left itself, is not that different from the center-right, maybe only slightly better, but still presecuting attorneys like De Magistris and Forleo, when they are doing their work against corruption too well.
Read here:

http://www.canisciolti.info/articoli_dettaglio.php?id=11157

21. dorigo - December 5, 2007

Matteo, I have very little to question in the allegations you present, casting doubt on the integrity of this or that other man. You acknowledge that the center-left is slightly better than the center-right as far as overall moral integrity of their members goes. But then you fail to present a picture of how things are supposed to change for better. I do not have that picture myself. I think we are stuck with the center-left as the minor of two evils.

I do not fail to criticize Prodi’s government in private, but I do find it useless to criticize only if we want to improve things in Italy at this juncture. I sincerely think that allowing this moment to pass, and thwart the risk of voting too soon, with a runover from Berlusconi again, is the right thing to do.

Now please do the exercise of finding good things in what the government has done in these 18 months. There are a few. fight to fiscal evasion, change of italian veto in europe against research on stem cells, reopening of funding and hiring of scientists in research centers (INFN for the first time since 2003 can hire new scientists), withdraw of troops from Iraq. The list is longer, although admittedly there is a big trouble in the Senate. You would like to see the sentence against rete4 applied as much as I do – but forcing the hand there would mean to commit suicide now.

Again, I do not see how you think of improving things. For me, within a democratic system with dubious politicians, 50% of which are corrupt or false or inept scattered across the different parties, the way to choose is simple: one side has ideas I share more than the other. I know perfectly well that those ideas will only in part, and with luck, become laws and concrete improvements of our society. But the alternative is worse.

Cheers,
T.

22. Matteo Martini - December 5, 2007

Tommaso,
I agree with you, I was just pointing out the fact that the lesser of two evil is still, alas, one evil.
Also, the moral value of the people in the center-left government ( not to speak about the center-right ) is so low that half of the guys in the current government would not be accepted as such in any other country like the U.K., France, Germany or the U.S..

I just wanted to point out this, I have no solution at the problem as you say, and I would still vote for Prodi ( actually, I would vote for DiPietro ), if we were to vote tomorrow

I almost agree with all the other things you say

Keep up with the good work!!

Matteo


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