Consumer complaint received 2021-03-25
Company: TD BANK US HOLDING COMPANY
State: NH
Product: Checking or savings account
Sub-product: Savings account
Issue: Managing an account
Sub-issue: Banking errors

Complaint:
My wife and I have had a high-balance savings account with TD Bank for several years. Because of the higher deposit amounts, we qualify for a higher yield than a standard savings account. 

In XXXX of XXXX, while I was inquiring about another banking matter, a customer service representative with TD Bank pointed out that our savings account product, " The High-Yield Savings, '' had been discontinued and replaced by the " Preferred Savings Account, '' and as a result, we were not getting the best rate considering our balance. I inquired as to why the product had been discontinued and what the difference was between the two. He replied that didn't know why it was discontinued, and that there was essentially no difference between the two savings accounts, as they had materially the same criteria and benefits. 

The representative went on to suggest that this type of thing happened fairly often, and that I should keep an eye on my account, or stop in to a branch regularly for an account review. I don't know when the High-Yield Savings account was discontinued, or how much money we forfeited because we believed we already had the best account and had no reason to believe it would change. 

Since that time, I have periodically monitored my rates and, if I was in a branch for other reasons, I would request an account review, as was suggested. A couple of days ago, XX/XX/XXXX, I checked the interest rate on my current savings account and found that it was about XXXX of the rate that it should have been -- 0.01 % versus 0.10 %. Again, it turns out that the reason behind the sudden drop in my savings rate was that my existing product, The Preferred Savings, had been discontinued and replaced by the " Beyond Savings '' account. And again, the only difference between the two is the name. 

At any balance for an individual depositor, the amount earned is going to be relatively small on a monthly basis and can easily be overlooked or even disregarded by most depositors who are not familiar with the bank 's practices. They my go years believing their money is earning the best possible rate as promised when they opened the account. I'm also sure that this arrangement is in the disclosure forms that most depositors sign without actually reading or understanding. However, on a cumulative basis for the bank, the amount that is forfeited by it's depositors is likely to be astronomical. 

I consider this practice to be a transparent form of fraud, regardless of whether it is technically legal. The bank uses this practice with the full knowledge that even its most reasonable depositors will not be able to monitor their accounts closely enough or often enough to catch each occurrence of a product change that results in a reduction in their expected earnings. Moreover, because of this foreknowledge, this practice is ultimately a premeditated method of defrauding depositors of tens of millions of dollars in interest that they should rightly expect to earn. 

My question is then, whether this practice is technically legal, and if it is, whether it should be. I have let TD Bank know my feelings about this practice and I will be searching for another more trustworthy institution.

Company response to consumer: Closed with explanation