Are Some Online Banks So Deceptive that They Should Not Be Listed on BestCashCow?

First, the good news. In its nearly 15 years, BestCashCow has very seldom had to deal with this issue. As the reviews across the site indicate, most people have outstanding experiences with the major online banks. For the most part, across the last decade and half, customers opening savings accounts and CD accounts at these banks experience outstanding service and find rates that enable them to grow their nest eggs faster through compounding at higher rates.

And, the same is generally true of lesser known local banks and credit unions. While we see reviews that are less than generous every day, the thrust of most complaints across all banks relate to long wait times, slow transfer speeds, small unexpected fees here and there (that are often removed), websites timing out, etc. These complaints rarely relate to banks engaging in tactics designed to nickel and dime customers.

And, we do occasionally grapple with banks purporting both to be online and accepting customers nationally, but that really aren’t either. If we learn that a bank is in fact only equipped to accept new customers in its home area or state, we restrict the listing so that it only appears in those places.

The more challenging determination is when a bank does offer all its online services to customers nationally, but does not treat all its customers fairly or in the manner expected of an online bank, but rather seems to go out of its way to rip them off. On only two occasions have we had to deal with this kind of scenario. And, unfortunately, both of those cases are occurring right now (one is a repeat offender).

The first case is that of Brio Direct. Brio Direct is a recent new entrant in the online banking space and is owned by Sterling National Bank. As we have learned from comments on this bank, Sterling is much maligned in New York for a taxi medallion scheme that it is purported to have engaged in with Michael Cohen to systematically defraud the taxi drivers of New York (and hence the City of New York and the State of New York). More importantly, Brio Direct, according to our site viewers, has a policy of taking large and small deposits and holding them for long periods without interest on both inbound and outbound transfers. Not only is this well documented in comments on BestCashCow, but our employees have also experienced this in their own accounts and have confirmed this questionable policy directly with the bank.

The second case is that on Salem Five Direct, the online banking division of Boston’s Salem Five Cent Bank. Salem Five has been around for some time and years ago engaged in a policy of (a) quietly slipping in undisclosed $6 charges for each outbound ACH transfer, and (b) lowering the interest given to existing customers to a rate that is well below that indicated for new customers online (only to then increase it if the customer contacted the bank to complain). These practices were deemed so deceptive that the Florida Office of Financial Regulation contacted BestCashCow and asked us not to list Salem Five Direct in our online savings tables. While we concurred at the time, we have put them back on our lists years later after the bank committed to us that it had changed these practices. However, a comment left on the site yesterday, that we have verified as being authentic, indicates that both deceptive practices have resumed.

Brio Direct and Salem Five Direct practices are especially troubling as these banks are both offering savings rates that are among the most competitive offered nationally at the moment. It would be easy to remove both banks (Salem Five Direct again) from BestCashCow’s online savings tables. But, that would go against BestCashCow’s mission to provide users with the most comprehensive list of online savings rates in the country. Therefore, we have opted to continue to list these banks, but to alert users of other user experiences with these practices in our online savings table. And, through our user comments, those on BestCashCow can easily learn more about the practices of both banks through customers’ own experiences (both banks are now rated 1 star and there are now over 20 comments about Brio’s practices).

While we have left the listings on BestCashCow, we have, however, now advised our affiliates to remove these listings without adequate disclosures. Some affiliates, including RatesAndInfo.com have chosen not to list these banks’ savings rates, but continue to list their CD rates as long as the practices do not extend to those products. We support such a solution where full disclosure cannot be made.