Bank of America knows its customer service is awful

Chief executive Brian Moynihan tells employees to be nicer, but it's the bank's proposed fees that consumers loathe.

By Jason Notte 

http://money.msn.com/now/post.aspx?post=793f12ae-b1bb-4cfd-ae66-bc23db18733e

When even the CEO thinks employees need to ease up on consumers, it's a pretty good sign a company's customer service could use some work.

Bank of America (BAC +2.33%) chief executive Brian Moynihan has sent a letter to nearly 270,000 employees telling them to make it easier for customers to do business with the bank, especially in light of its poor performance in customer satisfaction surveys. 

Moynihan's letter, which Reuters viewed a copy of, urges workers on the phones at customer call centers to use the same "problem-solving approach" as U.S. Trust and Bank of America's own Merrill Lynch representatives do with their well-off clientele.

As it stands, Bank of America customers feel like chattel compared to other banks' human assets. The latestAmerican Customer Satisfaction Index shows Bank of America's score sliding 3% from last year to 66, its poorest showing in a decade and well beneath the 79 scored by small banks and credit unions or even the 74 posted byJPMorgan Chase (JPM +1.45%).

"Customers increasingly are rejecting the ever-mounting fees charged by large banks and taking their business to credit unions instead," Claes Fornell, ACSI founder, said in a statement. "Bank of America, in particular, stands out as the only bank that is still below its pre-recession customer satisfaction level. It is clear that this is mostly because of fees."

Though Bank of America has had problems coordinating its banking and lending branches since acquiring troubled mortgage broker Countrywide in 2008, its customer relations nightmare began in earnest back in 2011 when it suggested a $5 monthly fee for debit card use. The Occupy movement seized on the ensuing customer anger to encourage the transfer of assets from Bank of America and other large banks to small banks and credit unions.

That didn't stop Bank of America from trying a fee hike again last year, with representatives from Massachusetts blowing the whistle on those plans to The Wall Street Journal in March. By November, plans to force customers toavoid fees by shunning tellers, maintaining minimum balances, getting Bank of America credit cards and holding mortgages with the bank were dead and Moynihan was in full retreat.

The bank's chief executive says his new customer service plan will roll out during a big company event on Thursday, but he's still in as tough a spot as ever. Profits were down 63% in the fourth quarter as $5 billion in mortgage-related charges dragged down Bank of America's numbers. Investors don't care much about low rates, federal regulations or the bank's mortgage mess -- which predates the Countrywide deal. Customers, meanwhile, have been adamant that investor profits shouldn't be paid for by the bank's low-income accountholders, who are disproportionately affected by new and rising fees.