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What does the Capital One acquisition mean for ING Direct?

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I’ve always pledged to be brutally honest with you about the best and worst companies out there.

Very few people in the personal finance space will name specific names about companies. Some of them are worried about closing the door on a sponsorship deal. Some simply don’t want to be “mean.”

I’ve always found that being ULTRA-SPECIFIC — more than anyone else — shows people you really know what you’re talking about.

So after news came out about Capital One acquiring ING Direct, I got approximately 830 million emails like this:

 

“Any thoughts on ING getting bought by Capital One? Me & my 2 friends who use IWT book are concerned. (EOM)”

–Kelly

 

“Now with ING being purchased by Capital One Bank do you think this will change your thoughts?”

–Mtokufa

 

“What do you make of Capital One buying out ING Direct??  I’ve been with ING for a number of years and pretty happy with the system, liked it better with higher interest rates, but whadya do?”

–Kim

 

…I’ve decided to talk about what the Capital One acquisition will mean for ING Direct. As you know, when I recommended my favorite savings account, checking account, and credit card, I named ING Direct as the savings account that I love and use.

My thoughts on the Capital One acquisition of ING Direct

There are companies that are pure pieces of shit.

Companies that I go out of my way to avoid, and warn everyone else about.

Capital One is one of those companies.

It’s an example of the worst type of financial company that exists to completely screw over their customers with outrageous fees, deceptive benefits, and absurd teaser rates.

For example, here’s a picture I snapped on BART a while back.

3X the average rate!! Wow!!

Oh, wait…you need a minimum balance of $10,000, which is literally written in fine print. Hey Capital One: When you compare the promise of the headline — which screams “EARN 3X MORE ON YOUR SAVINGS”  — with the actual account requirements, your customers feel cheated and hate you even more than they already do.

Would a company like Amazon ever do this? Zappos? Nordstrom?

I also get thousands and thousands of emails every month, and you wouldn’t believe how many people complain about the terrible behavior of Capital One.

Reader Kelly described her experiences with Capital One:

“Multiple horrible customer service experiences with Cap One, plus some really shady/fraudulent credit reporting muck-ups on their end. Not impressed, burned a few times, and now wary.”

In fact, in a recent interview with CreditCards.com, where I named my favorite/least favorite accounts, here’s what I said:

“Capital One: I would never use their cards. I hear horror story after horror story from my readers about them.”

It doesn’t help that when the New York Times asked Capital One if they were going to ruin ING accounts, the Capital One rep responded with the most robotic, automoton-like responses I’ve ever heard:

Q. Are you planning any new fees or minimum balance requirements?

ING Direct has built a large and valuable franchise of engaged customers by focusing on a few simple proconsumer products.  We deeply understand the value of the loyalty and advocacy ING Direct has been able to build with its customers.  Everything we do as we integrate our businesses will be thoughtful and surefooted with a focus on sustaining and building that customer loyalty. We will focus on the customers, channels, products, and pricing strategies that build the best long-term customer relationships and deliver the best cost of funds.

[RAMIT’S TRANSLATION: “WE WILL FUCK U SOON”]

Are you serious? THAT is the best response that Capital One — an enormous company that everyone fears will turn friendly ING into a mega-bank that screws customers over — can come up with? I could have crafted a better response while juggling on a tightrope over Niagara Falls.

What the Capital One acquisition means for ING Direct

I can understand the concern. Thousands and thousands of readers have opened ING Direct accounts because of my recommendation in my book, blog, and emails. So now that a terrible company bought ING Direct, what should you do?

THE ANSWER IS CALM THE FUCK DOWN YOU WEIRDOS.

What the hell is wrong with you??

Do you seriously think a company — even the demonic Capital One — is going to immediately change ING accounts into a fee-heavy, terrible-customer-service-having, fine-print-obscuring monstrosity of an account?

Of course not. They JUST acquired ING Direct. They are not going to drastically change your account in like 2 minutes.

I understand the hatred of Capital One, but the irrational fear of this acquisition is getting out of control. People have ALREADY canceled their ING account anticipating the horrible changes that are coming. Would you really want to be friends with these people? “OMG…it’s cloudy outside. MOVE OUT OF THE WAY! I HAVE TO GO TO WALMART TO BUY GUNS AND WATER…IT MIGHT BE A NUCLEAR HOLOCAUST!!”

Talk about jumping the gun.

Here is what I anticipate will happen over the long term.

  • Nothing will change for a while
  • Then Capital One, like a racist uncle, will not be able to help itself from revealing its true colors. It will make subtle changes to ING accounts to make it more profitable for them…and shittier for customers (timeline: unknown. My guess is around a year for the first changes, but who knows.)
  • It won’t be “so bad” for a while, especially since we’ve invested so much time in automating transfers to our sub-savings accounts
  • Eventually, people will start to realize ING has become “just another” bank, and there are better options
  • After I get fed up, I will browse to ingdirect.capitalone.com and vomit all over my computer just to spite them. Then I will switch to another bank, test it, and write a damning post, causing thousands of people to switch accounts within 24 hours
  • We will pick another bank and life will go on

HOWEVER. NONE OF THIS IS HAPPENING YET. So stop being weirdos and anticipating the end of the world before it ever comes. You have MUCH bigger things to focus on than what “might” happen with your bank account. Have you negotiated? Automated? Earned more? Taken the 30-day challenge to save $1,000? Focus on what’s in front of you, not what might happen some day, possibly, somehow.

Seriously, I hate you all.

 

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132 Comments

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  1. Your post is the first I’ve heard of this. It’s a little concerning, but as you say it’s probably safe to wait and see.

    My one concern is this: to discourage customers from switching banks, might they enforce some kind of balance transfer fee? Do banks ever do that? Maybe it’s not even legal.

    • I’ve never heard of such a fee on a savings account. Many credit accounts have this feature. I can’t see how Capital One would be able to charge you for transferring your money out of their bank.

  2. I like how the first line is about being brutally honest, and the last line is, “Seriously, I hate you all.” :>)

    -Marshall Jones Jr.

    • Ramit is such a sweetheart.

    • Ramit – we hate you too. (Being brutally honest here).

      Seriously – have you SEEN my inbox recently? It’s overflowing with spam like
      “earn 1k closes tonight!”
      “The hard sell – be very afraid!”
      “why aren’t you signing up for earn 1k?”
      and “are you brain-dead? I commanded you to sign up for earn 1k! Hello?!”

  3. “Seriously, I hate you all.”
    It must be opposite day! We love you too, Ramit!!

    There are other online banks, although ING did pave the way for quite a while, so we do all have options when that day comes (if ever).

    Good advice, if a little sharp at times…I doubt 100% of your readership are in ‘weirdo’ terror over ING right now…I certainly wasn’t, for all of the reasons you outlined. 😉

  4. I’ve had a car loan and savings accounts with Cap One and never had any problems. It sounds like most of the issues people have are with their credit cards. I keep most of my cash in their Interest Plus account and it’s pretty straightforward. If you have an ING account, it’s silly to close your account right now, unless you just want to boycott Cap One.

    • Honestly, I have never had any major issues with my Capital One card though. Only thing I can think of is the real low credit limit on my card initially. Come to think of it, I actually really like the card: I can apply the cash back to my statement (I hate depositing checks) and there is ZERO foreign transaction fee (they have even used reasonable conversion rates in my experience).

      I know that my experience may be different than others and given that CapOne is a “non-traditional” bank almost ensures they are screwing others but this may be a major overreaction, even by the author.

      Ramit, we all still like you.

  5. I was one of those people who joined ING based on your recommendation. I think I used your affiliate link.I’m sure Crapitole One won’t be able to screw ING up right away. I’ll watch for developments.

    I was really hesitant to automate my finances for a long time. When I was in the Navy, I had my car insurance on an automatic withdrawal from checking and the Navy screwed my paycheck up. I had to scramble to keep my insurance from crashing my account and then cancelling my coverage for non-payment. If that had happened while I’d been at sea, I’d have been hosed.

    So it took me a long time to warm up to the idea of automation. Now that I have, I look at the few last bills that can’t be automated. I want to call my water company up and scream “What the hell is wrong with you people! It’s 2011!” At least my gas company moved up to 2004 and will send me a bill by email now. Still can’t automate payment to them.

  6. Well written Ramit, as usual. While C(r)apital One is one of the worst examples of a company in existance today, it will take awhile. Besides I’m sure other companies will be watching the developments waiting for a mis-step and have things waiting in the wings to roll the red carpet for disgruntled ING account holders.

  7. Ramit-

    I just found your site a couple of days ago and am looking forward to putting some of your advice into action. I have a crappy savings account through my crappy bank and am looking to replace it. Is the ING account still a good idea for the next year or so or can you recommend an alternative?

    (also, I really love your writing style. I can honestly say that this is the first time I’ve actually enjoyed reading a financial advice blog. That is saying something!)

    • How can you read this article and come away thinking that he would recommend that someone open a NEW account with ING now???

      There are lots of online banks out there now. Do some research!

  8. Al Pittampalli Link to this comment

    That corporate PR response was shockingly bad. When did corporate execs become politicians? Any time anyone talks like that, you know they’re hiding something. People use ambiguous language to mask what they really feel, in this case I’d imagine that rep was a little worried themselves. Thanks for pointing to this, Ramit.

  9. that is the beauty of the system we have today, when a good apple turns sour, several others crop up. there are several good apples out there if push comes to shove, Ally bank, USAA bank . . . . but the point is valid – calm down, the sky isn’t falling anytime soon . . .

    • Props to USAA! I have never loved (or even LIKED) my bank until I switched to them, and I couldn’t be happier.

      I just always assumed a bank was a necessary evil until I started shopping around and found a bank that actually serves its customers. Everyone should read Chapter 2 in IWT. The recommendations in the book may become out of date, but the point won’t change. SHOP AROUND!

      If ING ends up turning into a suckfest, people will leave. It’s as simple as that. Leaving a bank and opening a new account couldn’t be easier these days anyway. Quit whining and vote with your dollars if your bank stops treating you the way you want it to.

    • I moved my checking and savings accounts to USAA Federal Savings Bank about 20 years ago (yes – 20 years!) and have never looked back. Think about this: it’s been over 20 years since I’ve been charged a fee!

      A few years later I got one of their credit cards, and have been getting 1% cash back (with NO annual fee, no bogus fees, and a very reasonable interest rate, for those months I need to underpay) ever since.

  10. This is a pretty normal affair in the terms of the business world. People don’t be sheep, there are other banks in the world that will be happy to hold your money. It’s unfortunate but reality. If I told you to go to Hawaii and seismologist announced the volcano might erupt in 10 years after the fact. Would you cancel your trip and send me retarded letters asking why I would send you there? No you wouldn’t, and if you did maybe you should stop listening to others period out of the fear that what they said could change.

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