Back in March, when this blog was just getting started, I posted an article about Washington Mutual and how successful they have been at redefining consumer banking. Now, it appears things aren't going so well.
Yet as the bank has grown, so has its stable of unhappy customers around the country. Last month, Minnesota District Court Judge Steven Z. Lange granted national class action status to a January, 2003, suit that alleged WaMu charged "illegal prepayment penalty fees" to borrowers paying off their mortgage loans. WaMu concedes it has overcharged some customers in Minnesota. In August, the bank settled a Seattle lawsuit alleging that WaMu had lost mortgage payments, posted payments late or improperly, charged erroneous fees, and filed inaccurate reports to credit agencies. As part of the settlement, the bank agreed to review complaints from more than 1,000 customers. In July, a separate Seattle suit was certified as a class action covering some 150,000 customers in five Western states. It alleged WaMu "improperly collected" reconveyance, statement, and other fees when customers paid off their home loans. WaMu disputes those charges and says it will "defend these claims vigorously."
I know WaMu has grown by acquiring other banks, and I wonder if IT integration issues are at the root of these problems. If so, things may get much better and WaMu will be back on my list of companies to watch. If the problem is something else, they should stop focusing so much on growth, and fix what they have before moving on.