Felix Salmon

Why banks don’t write in English

By Felix Salmon
December 8, 2010

This is why I can’t wait for the arrival of BankSimple, or at the very least for some kind of concerted effort to require banks to communicate in English. It’s a letter I just got in the mail from Citi:

Scan 7.jpeg

Why do banks tell their customers to read such stuff carefully, when it’s incomprehensible no matter how carefully you read it? For one thing, it makes no sense unless you’ve retained your Checking Plus (variable rate) Account Agreement and Disclosure, and nobody does that. (Incidentally, the Agreement and Disclosure is not available online: I looked.)

So in a fit of masochistic perversity, I decided to do what I was told, and call Customer Service to ask them what on earth this notice meant. It took a while to get a human, of course: I had to type in my social security number, and then my PIN, and then my ATM card number, and then another PIN, which was apparently wrong, and then my mother’s maiden name, and then the last four digits of the social security number I typed in at the beginning. At which point I was told that “at this time we are experiencing heavy call volume” (it was 11pm), before Ricky answered the phone and asked for my ATM card number (again), and my date of birth, and the last four digits of my social security number (for the third time), and for the date of letter. Then, finally, he put me on hold.

Eventually, Ricky came back to tell me that he was talking to his colleague but that he’d worked out that “you have a change in the rate that the account is set at”. He went away again, came back, said “All right sir, you still with me?” — and then we were disconnected, 16 minutes into the call.

Naturally, since I am clinically insane, I called back. ATM card number, mother’s maiden name, 0 for operator, 1 for questions about accounts, 1 again, “all of our associates are currently servicing other clients, and we are experiencing long call delays”, “thank you for holding”, and finally I get James. Who actually answers my question!

“All the letter is letting you know,” James told me, “is that previously, if the prime rate would change during a cycle, your interest rate would change during that cycle and we would backdate it to the whole cycle. Now, whatever the prime rate is on the first business day of the month, that rate will stay in effect the whole month.”

A simple explanation, in plain English, from someone who clearly understood what he was saying, and who could explain it a few different ways if I didn’t understand it the first time.

Citibank clearly employs people with brains, even to answer phones at 11pm on a Tuesday night. So how come it’s apparently beyond their abilities to write letters in plain English in the first place? I didn’t ask James that, but he volunteered the information anyway: “Everybody’s getting one of these,” he said. “It took us quite a long time to get an explanation of what it meant.”

In other words, that language about “if you have any questions, please call Customer Service” wasn’t put there to be helpful, since no one bothered to inform Customer Service about the changes before the letter went out. It was just put there as standard boilerplate, and was put in, I’m sure, by the same person who decided that if you’re telling customers about a change in terms, you shouldn’t say what the old terms were, thereby making it impossible to work out what the change is.

The myriad ways in which banks extract money from their customers are well known. But why are they so dreadful at communication when it comes to perfectly anodyne announcements like this? Maybe it’s just so that if and when a less anodyne announcement arrives in my mailbox, I won’t even try to read it. Maybe it’s just that there are far too many lawyers floating around in a bank which was brought to its knees by the leadership of its former general counsel. Or maybe it’s simply that no one cares, not when the number of banks communicating in English is zero. But I suspect that the real reason is that information asymmetry is so ingrained in banking culture that these notices are treated as a regrettable legal necessity, rather than an opportunity to actually communicate something germane. Is it possible to change that culture? I have my doubts.

14 comments so far | RSS Comments RSS

Get this: Many call centers are completely unaware of mailings that get automatically sent to clients. Partial cause is disparate internal systems/disparate systems that don’t “talk” to each other combined with horrendous organizational structure and different groups not communicating with each other. It’s pretty pathetic, like, really pathetic. Financial Services firms (and cable co’s, and phone co’s…) still view customer “service” as a cost center instead of a means of establishing/fostering competitive advantage. Sigh…

Posted by Anal_yst | Report as abusive

@Felix: these notices are treated as a regrettable legal necessity, rather than an opportunity to actually communicate something germane.

Possibly, the notices are a legal necessity. However, legal text can be written clearly for the average reader. See the Clarity website: http://www.clarity-international.net.

Posted by MikeUnwalla | Report as abusive

The devil is in the details brother. Like Mike says, they don’t want to be liable, in case of any lawsuits they can say that they told us so, even though the letter was difficult to read. Let’s wait or hope for a reform to make all these letters more understandable.

Posted by Engels | Report as abusive

“if the prime rate would change during a cycle, your interest rate would change during that cycle and we would backdate it to the whole cycle. Now, whatever the prime rate is on the first business day of the month, that rate will stay in effect the whole month.”

I’ll bite – if the prime rate goes down, they would lower the rate? I DOUBT THAT – but if anyone really knows, I would like to know.
Second, so what is the rationale – I suppose a change in the law. But if Citi lowered as well as raised when the prime rate changed, isn’t this just a wash?

Posted by fresnodan | Report as abusive

They don’t want their customers to figure out that: 1) When they expect rates to be going down, they pay you interest based on the latest prime rate of the cycle (so presumably the lowest possible rate for the month) and 2) When they expect rates to be going up, they pay you interest based on the prime rate at the beginning of the cycle (so presumably the lowest possible rate for the month). Looks like Citi expects the prime rate to start rising sometime soon.

Posted by qsym | Report as abusive

To answer the question:

“Is it possible to change that culture?”

It’s highly unlikely that a large wayward corporation can ever reform itself for the sake of better relations with customers when it’s already so far down the bad path. It’s like dutch elm disease for a company. It actually infects its peers if leaders in the industry are not careful.

However, this is the exact sort of competitive advantage opportunity that new competitors seize upon to win market share, against the usual odds.

Why are credit unions suddenly getting attention again? Because they stayed true to their missions, they didn’t do what Citicorp did to grow and profit recklessly, and they didn’t end up in the compromised position that Citicorp is in now as a result. A good credit union can (and often does) provide a much better customer service experience than one of these large, faceless, merciless retail banks that are now desperate for cash. That’s enough of a difference to make the choice easy for new customers. (slightly better interest rates and friendlier credit offerings help, too)

Posted by BrianVan | Report as abusive


Forget the banks.

Take a look at this … a personal online wallet: bitcoin.org

Posted by gorndog | Report as abusive

A perfect example of deliberate obfuscation. The banks want to make sure that their clients are convinced of their inability to understand financial issues so that they remain dependent on the presumed expertise of bank agents. Their use of language as a means of control goes so far as to fabricate words. The current conceit of the financial services industry is that they, and they alone are able to manage the “decummulation” by retiring boomers. Look that up in your dictionary.

Posted by Monetarius | Report as abusive

If you looked up “decummulation” in your dictionary, you won’t find it. You won’t find “deccumulation” either.

Posted by Monetarius | Report as abusive

The T&Cs are not really there for your benefit, they are there for the banks. That is why they are written in this legalese. Especially these days when people are trying to get out of contracts by finding any possible technicality, exactly what motivation have they to express themselves in possibly vague “simple english” vs tried and tested legalese?

Also sending out the whole agreement when a tiny bit has been changed is not terribly green and it is even harder to scour a document to see what the new changes are. That agreement is a legal contract, you should really keep it – no I didn’t keep mine either…

Posted by Danny_Black | Report as abusive

Don’t you just love lawyers and legal departments? Thank God John Major set the ball rolling back in 1990 for a return to Plain English and UK banks followed. Now their letters are still legal, but also understandable. I suspect they are also covered by the Unfair Contracts legislation too, something about if an average citizen cannot be reasonably expected to understand what is written, the clause is not acceptable legally.

There must be something in the US that protects the consumer from the corporates and the banks, surely?

Posted by FifthDecade | Report as abusive

FifthDecade, this is what the OFT had to say:

“19.1 Regulation 7 states:
(1) A seller or supplier shall ensure that any written term of a contract is
expressed in plain, intelligible language.
(2) If there is doubt about the meaning of a written term, the interpretation
which is most favourable to the consumer shall prevail …
19.2 Clarity in contractual language is widely recognised as desirable in itself,
but the Regulations go beyond promoting that objective alone. In line with
their purpose of protecting consumers from one-sided agreements, and the
requirement of the underlying Directive that ‘consumers should actually be
given an opportunity to examine all the terms’ (Recital 20), they have to be
understood as demanding ‘transparency’ in the full sense. As the High
Court has found in a case relating to the fairness of bank charges, it
requires ‘not only that the actual wording of individual clauses …be
comprehensible to consumers, but that the typical consumer can
understand how the term affects the rights and obligations that he and the
seller or supplier have under the contract.’46
19.3 It follows that what is required is that terms are intelligible to ordinary
members of the public, not just lawyers. They need to have a proper
understanding of them for sensible and practical purposes. It is not
sufficient for terms to be clear and precise for legal purposes, except in
contracts normally entered only on legal advice.”

http://www.oft.gov.uk/shared_oft/reports  /unfair_contract_terms/oft311.pdf;jsess ionid=1D9163E1CDA404BBC8E21712FF17B8BF

I am surprised more financial contracts are not thrown out under this law given the standard is what a typical english person would understand….

Posted by Danny_Black | Report as abusive


With all due respect, please consider walking the talk and banking somewhere other than a Too ‘Bigger’ to Fail institution like Citi.

http://www.polycapitalist.com/2010/12/fe d-governor-hoenig-too-bigger-to-fail.htm l

Thank you,

The PolyCapitalist

Posted by Polycapitalist | Report as abusive


Jon Stein here, CEO of Betterment.com. Our goal at Betterment is to make smart investing simple and accessible (as it should be!) – and an important part of that mission is explaining things as clearly as possible. I agree that most bank and investment firm communications are incomprehensible. Granted, it’s not always easy to make complex concepts simple – the work is in choosing what’s important to focus on, and what is unnecessary detail. I’d love to ask for you and your readers’ help in making our site and product more accessible. Check us out at http://www.betterment.com.

We love your writing and have re-tweeted and written linking posts to some of your pieces. Thanks!


Posted by jonstein | Report as abusive

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