Washington Mutual Inc. is finding it hard to make fans in Southern California.
Despite a high-profile marketing push that seeks to assure its newly acquired customers that service is the highest priority, the Seattle-based thrift continues to be plagued by complaints of long lines in Southern California branches.
Internet investor chat rooms carry complaints, as well.
“Customer service doesn’t exist here,” reads a typical message on Yahoo’s chat board devoted to Washington Mutual investors. “Maybe Seattle is a lot more friendly because it’s (where) the original company is. In LA, you have a lot of acquired and disgruntled employees due to the merger.”
At a Westwood branch recently, several customers waiting in a long line for the one available teller were shouting at other Washington Mutual employees, asking them to help out. After several minutes, two additional teller windows opened up.
Washington Mutual officials concede that there have been complaints of long lines, but they insist that a priority is placed on making enough tellers available so that the pace of service doesn’t suffer.
“Bank acquisitions and conversions are rarely popular,” said Mike Amato, Washington Mutual’s Irvine-based senior vice president and head of consumer banking for Southern California. “We acknowledge that there have been a few high-profile situations where customer service hasn’t measured up.”
Amato says that he went into a Washington Mutual branch recently and heard a woman complaining that the lines were too long.
“We timed her time in the branch, and she was in there for three minutes,” he said. “We had 21 windows open so everyone could be served as quickly as possible. When she left, she said, ‘I guess it wasn’t so bad.'”
Washington Mutual was largely unheard of in California when it acquired Irvine-based American Savings in 1996, followed by its purchases of Great Western Bank in 1997 and H.F. Ahmanson’s Home Savings in 1998 (which had earlier purchased Coast Savings). The three acquisitions cost somewhere near $20 billion, and made the Seattle-based thrift the nation’s largest.
But the rapid rise here has come at a price. The most common criticism is that service is slow because so many branches were closed. In Southern California, the bank closed 107 branches following the Home Savings merger, 21 in OC.
Then, too, WaMu’s decision to replace Home Savings’ direct-access online banking service with one much less user-friendly was met with grumbles by former Home customers.
“I was a Coast Savings customer and a Home Savings customer and was pretty delighted with both,” said a banking analyst who covers Washington Mutual. “Those kinds of things don’t make people happy, and I’m not a Washington Mutual customer anymore.”
Deposits Down
In OC, WaMu saw an 8% drop in deposits in the 12 months ended June 30, compared with the prior 12 months, but officials attributed that to a nationwide shift of consumer money into money-market instruments and stocks.
The analysts’ recommendation on WaMu’s stock is “accumulate,” which is below “buy” on the scale. Because so few analysts dare to say “sell” anymore, “accumulate” is actually a fairly negative rating.
Washington Mutual attributes the complaints to consumer frustration over the wave of mergers that has dominated the banking industry. Any time the letterhead on a checking account changes three times in the same number of years, there is bound to be fallout, company officials say.
Company Cites Improvement
To bolster the contention that things are calming down, Amato points to in-house statistics showing that the level of customer criticism has been falling of late.
In August, the number of written complaints sent to the thrift reached an all-time high of almost 800, most of them about service quality. In November, the number had fallen to just under 550.
“Are branches crowded? Yes. Do I wish they weren’t? You betcha,” Amato said. “But complaints are down.”
The strongest argument that customer dissatisfaction is subsiding is that WaMu’s no-fee checking account is adding customers fast. In November, it added 9,920 accounts in Southern California alone.
“American Savings didn’t grow 10,000 accounts in all of 1996,” Amato said. “People are voting by their feet in the thousands that come to us every day.”
While admitting that criticism of WaMu’s low-tech online service may be justified, Amato pointed out that the savings and loan avoided the kind of technical glitches that plagued Wells Fargo & Co. when it merged with First Interstate Bank in 1996.
“I have heard of transitional problems, that some customers have gotten lost in the transitional bureaucracy of this size,” said Norman Katz, managing partner of MCS Associates, an Irvine-based bank consulting firm. “(But) it’s not of the order when Wells Fargo was integrating First Interstate. That was an absolute debacle.” n
Brinsley is a staff reporter at the Los Angeles Business Journal. David Orloff also contributed to this story.
