BOSTON - Debit Card Glitch for Some Citizens Customers : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

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Title: Some former State Street customers suffer card snafu after being switched to Citizens

By Beth Healy, Globe Staff, 5/9/2000


When Citizens Bank sent out 12,000 new ATM cards to former State Street Bank & Trust customers late last month, there was an embarrassing glitch: The debit function on the cards didn't always work.

Many customers who tried to use the cards to make purchases at grocery stores and other shops starting on April 28 were denied. Among those who experienced the inconvenience: State Street Corp. chief executive Marshall Carter.

Citizens spokesman Brad Minnick said there was a ''technical error'' with cards used at certain merchants. Customers were able to access cash at ATMs.

''There were locations where they would deny the card,'' Minnick said. The cards did work in many instances, he said, but, ''We decided the best way to avoid the problem was simply to reissue the cards to everyone.''

Citizens' newest customers received their new cards a week later and were instructed to destroy the cards first sent to them.

Nearly all of the customers who experienced the problems are State Street employees. Boston-based State Street sold its 200-year-old bank to Citizens in May 1999. The sale included State Street's small but highly profitable commercial banking unit and its retail accounts, which were run from just four branches.

The technical problems with the cards rankled some State Street employees, who weren't eager to have their accounts sold. State Street said it exited banking because it wanted to focus on its far larger businesses of recordkeeping and securities custody for mutual funds and institutions, and investment management.

State Street spokeswoman Hannah Grove said the debit cards appeared to have been the only problem in the conversion of the accounts to Citizens during the first weekend in May.

''Citizens recognized the problem before it became widespread, and they dealt with the situation promptly,'' Grove said. ''Given the size and scope of the conversion, things have gone extremely well.''

The debit card trouble comes as Citizens seeks to position itself as an alternative to FleetBoston Financial Corp., which is generating some customer unrest as it attempts to absorb former BankBoston customers. And it comes on the heels of glitches some USTrust customers experienced when Citizens took over their accounts. In February, when Citizens assumed responsibility for about 400,000 USTrust accounts, more than 10,000 USTrust customers did not receive either ATM cards or checks in the mail on time.

Citizens, which bills itself as ''Not your typical bank,'' came under fire for eliminating USTrust's no-fee checking account after acquiring its Boston rival. Citizens told certain customers they would have to pay ATM fees and fees for using their new debit cards.

As part of its deal with State Street, Citizens said it would not change the fee structure on the accounts. Citizens made the same promise to USTrust customers but was accused by many, including state Treasurer Shannon P. O'Brien, of going back on its word.

Citizens has about $29 billion of assets and is a unit of the Royal Bank of Scotland.

This story ran on page D1 of the Boston Globe on 5/9/2000. ) Copyright 2000 Globe Newspaper Company


-- (, May 09, 2000

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