Improving the effectiveness of banks’ service guarantees: Implementation differences

While participants understood the basic premise of the guarantee, there were many conflicting opinions about implementation issues. For example, there was no consensus about whether employees should proactively offer the guarantee, even when it was clearly warranted. Some participants indicated they would never voluntarily offer it. They felt that the instructions called only for providing the compensation when customers requested it. Others said that if the delay was really long or the customer was especially irate, they would offer the guarantee. These differences in opinions contributed to inconsistent execution of the guarantee, depending on the employee who happened to be working at the time of the delay.

In terms of in-branch communication, differences were also observed. Some branches kept the signs that described the guarantee very visible and next to the teller. Others displayed the signs prominently initially, but later removed them or placed them in a much less visible area. These inconsistencies might explain customer remarks about not being sure whether the programme was still in place. Employees also had different opinions on how to handle requests for compensation when they did not believe that the customer’s actual wait exceeded the guarantee’s threshold. While all participants were aware of the official policy, some did not feel that the customer deserved the compensation in these instances. While it is not clear how these employees manifested their feelings in the branches, it can be assumed that their attitude contributed to the atmosphere reported by customers. In sum, the study revealed significant inconsistencies concerning the implementation of the programme.

The impact of the customer

Several participants indicated that customers were often a contributing factor to the delay. Examples included customers who did not fill out forms correctly, did not have the right identification documents, made unreasonable demands or were simply very slow. A few participants even reported cases of deliberate delaying tactics by customers, to enable the next person in the queue to benefit from the guarantee. Many participants shared the opinion that if customers ’caused’ the delay, they should not be compensated for it. There was an underlying belief among many participants that customers ‘deserved’ to be compensated only if it were the bank’s fault and if it was beyond the bank’s control, customers should not be compensated.

 

Representative APR 391%

Let's say you want to borrow $100 for two week. Lender can charge you $15 for borrowing $100 for two weeks. You will need to return $115 to the lender at the end of 2 weeks. The cost of the $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you decide to roll over the loan for another two weeks, lender can charge you another $15. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

Implications of Non-payment: Some lenders in our network may automatically roll over your existing loan for another two weeks if you don't pay back the loan on time. Fees for renewing the loan range from lender to lender. Most of the time these fees equal the fees you paid to get the initial payday loan. We ask lenders in our network to follow legal and ethical collection practices set by industry associations and government agencies. Non-payment of a payday loan might negatively effect your credit history.

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