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CUSTOMER SERVICE HALL OF SHAME

Alexander Kent, Alexander E.M. Hess, Thomas C. Frohlich, Ashley C. Allen,
Douglas A. McIntyre
Published: July 18, 2014 7:32 am
Last Updated: December 4, 2019 9:09 am




Source: courtesy of Alex Proimos, via Wikimedia Commons
When it comes to companies we dread dealing with, we all know who they are.
Let’s put it this way, would you rather go to the Apple Genius Bar to fix
something with your iPhone or to the Bank of America teller to reverse a
surprise interest charge?

It’s perhaps no wonder Bank of America leads the nation in bad customer service.
The massive U.S. financial institution has made the Customer Service Hall of
Shame every year since 2009.



Click here to see the customer service hall of shame

Click here to see the customer service hall of fame

In collaboration with research survey group Zogby Analytics, we polled 2,500
adults about the quality of customer service at 150 of America’s best-known
companies in 15 industries, asking if that service was “excellent,” “good,”
“fair” or “poor.”

Those with the highest percentages of “excellent” rankings make up the Customer
Service Hall of Fame; those with the highest share “poor” ratings make up our
Customer Service Hall of Shame. (See how the survey was done and full results on
the last page of this article.)

Many of the other companies with the bottom-rated customer service have earned
spots on the Hall of Shame list in the past. Eight of the 10 companies in the
Hall of Shame have made at least three previous appearances since 2009.

It is difficult for businesses in some industries to win consumer praise. Bank
of America, Wells Fargo and Citigroup — three of the largest banks in the
country — received some of the worst customer service ratings in the nation.

For banks, the many fees they charge may contribute to a customer’s poor
evaluation of a company. “As soon as you take out your Bank of America ATM card
you get charged,” said Praveen Kopalle, professor of marketing at the Tuck
School of Business at Dartmouth College.

In addition to unpleasant and repeated charges and fees, these large banks
engaged in questionable and often unlawful behavior that contributed to the
housing crisis. For example, “[Banks] assured customers that [mortgage-backed
securities] were actually good products when, in fact, they were pretty toxic,”
Kopalle said.

Cable and satellite TV companies are another segment that has repeatedly
received poor customer service ratings. Shep Hyken, a customer satisfaction
expert, explained that these companies are often unclear about their service
charges. “Customers get shocked when they get their bill,” Hyken said.

In some instances, companies have little incentive to offer good service. “If
people really don’t like the customer service that they receive from telecom
companies, they don’t have a lot of choice,” Tim Calkins, clinical professor of
marketing at the Kellogg School of Management at Northwestern University,
explained. Without competition from other companies, “there is just not that
pressure to deliver great service.”



Future consolidation in these industries may exacerbate the problem. Companies
like AT&T and DirecTV, as well as Time Warner Cable and Comcast, are driving
merger and acquisition activity that will likely close this year, pending
government approval.

Many of the companies with the worst customer service, however, are still market
leaders and manage to maintain impressive profit margins. Seven of the 10
companies in the Hall of Shame dominate their industries.

This is 24/7 Wall St.’s Customer Service Hall of Shame



10. Citigroup
> Pct. ratings “poor”: 15.3% (credit card), 15.1% (banking)

More than 15% of respondents said they had a “poor” experience with both
Citigroup Inc.’s (NYSE: C) credit card and banking businesses.

However, Citigroup is hardly alone among financial institutions in receiving low
ratings for its customer service. Both Bank of America and Wells Fargo had
worse-rated banking operations. While missing from the bottom 10, Capital One
and J.P. Morgan Chase also received low ratings.

The banking industry as a whole suffers from bad press, likely due to its
involvement in the financial crisis. According to analyst Dick Bove, penalties,
regulations and rule changes have made quality customer service even more
difficult to deliver.

“The banks responded by taking away millions of credit cards from customers that
they could no longer do business with on a profitable basis,” Bove said.

While customers gave Citi’s credit card and banking service low grades, the bank
performed well overall in the Pew Charitable Trusts’ most recent annual survey
on consumer banking practices. Citi’s policies include five of the seven “best
practices” endorsed by the study.

ALSO READ: The 15 Highest-Paying Companies in America

9. Wells Fargo
> Pct. ratings “poor”: 16.2% (credit card), 15.0% (banking)



More than 16% of survey participants said their experience with Wells Fargo’s
credit card business was “poor.” Wells Fargo’s banking operations did not fare
much better for customer service. About 15% reported a “poor” customer service
experience for Well Fargo as a bank.

The company declined an interview. In written statement, it said that it was
committed to improving customer experience, and that it was “always looking for
ways to apply their input and further strengthen our customer service.”

Although Wells Fargo & Co. (NYSE: WFC) has largely avoided the financial
crisis-related fines several of its competitors paid, it has not been immune to
scrutiny. The bank, which is the largest provider of home loans, was sued by the
Federal Housing Authority in 2012 for bad mortgages. Like other banks,
continuous criticism since the financial crisis is likely a major component of
Wells Fargo’s customer dissatisfaction.

According to Bove, bad press is only part of the problem. Strict regulations and
large fines can have a considerable impact on customer relations as banks are
forced to implement cost-cutting measures that may inconvenience consumers.

8. AT&T
> Pct. ratings “poor”: 17.5%

AT&T Inc. (NYSE: T) is hardly the only mobile telephone company that received a
disproportionate number of negative reviews for its customer service. In fact,
all four of the nation’s leading mobile carriers were among the bottom fifth of
companies evaluated.

Although the company’s record of customer service is spotty, AT&T has developed
several initiatives designed to improve customer outreach. Among these, the
company wrote in its annual report that it had 70 staffers dedicated to customer
care on social media platforms. Additionally, last year AT&T streamlined its
call center menus, cut waiting times, and trained specialized employees to
handle smartphone operating system-related questions.

“Three or four years ago, the customer service at AT&T was very poor, but they
really have come a long way,” Kopalle said. Now, “They pick up the phone pretty
fast, they resolve your situation very quickly.” However, Kopalle noted that
AT&T’s service is hardly perfect. “I think they still suffer from a number of
dropped calls. That’s not really a good thing.”





7. AOL
> Pct. ratings “poor”: 18.1%

In the years following its spinoff from Time Warner, AOL Inc. (NYSE: AOL) has
repositioned itself as a content provider. AOL owns a number of notable media
entities, including TechCrunch, Engadget and The Huffington Post, some of the
most frequently visited sites on the Internet. AOL also hosts its own homepage,
which is still among the Internet’s largest portals.

While AOL no longer brings to mind free CDs and promotions, the company still
derives a major portion of its business from subscribers. In the first quarter,
$150 million of its $583 million in revenues came from subscriber payments. The
segment also accounted for the bulk of the company’s operating profits.

AOL’s membership and account business has been criticized in the past for the
difficulty customers had in cancelling their accounts. Some consumers were also
annoyed by the number of unsolicited free AOL install disks they had received in
the mail.

ALSO READ: America’s Worst Companies to Work for

6. Time Warner Cable
> Pct. ratings “poor”: 19.9%

Nearly 20% of survey respondents said they had a “poor” customer service
experience with Time Warner Cable.

In December 2013, the Federal Trade Commission fined Time Warner Cable $1.9
million for charging higher rates to customers with poor credit histories
without notifying them. Charging customers more for a service without their
knowledge is likely not a good way to inspire strong customer service ratings.

Time Warner Cable lost more than 800,000 video users, or nearly 7% of its total,
between the end of 2012 and the end of 2013. This is part of a larger “cord
cutting” trend that has cost Time Warner Cable and its rivals millions of video
customers in recent years, as streaming services such as Netflix have gained in
popularity.

In a written response, the company said it had “introduced one-hour appointment
windows and expanded weekend and evening appointment options in a growing number
of Time Warner Cable service areas” to offer better customer service.



Time Warner Cable and Comcast are pursuing a merger. The deal is currently being
evaluated by regulators, who are focused on the impact the deal will have on
consumers and customer service.

5. DirecTV
> Pct. ratings “poor”: 20.3%

More than one in five survey respondents reported a “poor” experience with
DirecTV. Regulators, too, have been critical of the company’s relationship with
customers in the past. DirecTV has been fined for violating customer agreements
on multiple occasions over the past decade.

DirecTV is now awaiting government approval for its merger with AT&T, another
company with a poor customer service rating. Whether the merger will serve the
public interest and improve the DirecTV customer experience remains to be seen.
At the very least, the companies plan to bring broadband service to millions of
rural Americans previously outside the range of service.

DirecTV claims its customer service is better than most companies in the
industry. But the company is one of four cable or satellite TV companies on the
Hall of Shame this year. Ensuring the quality of the product may be easier than
ensuring quality customer service. As Hyken explained, while these companies
offer a highly sought-after service, “you have to be home for four hours and
take a half-day off work if you want a guy to install it.”



4. Dish Network
> Pct. ratings “poor”: 20.4%

Dish Network customers in certain markets have intermittently lost access to
several popular channels because of the company’s disputes with content
providers. Contentious contract negotiations with Disney put more than 14
million Dish subscribers in danger of losing access to ESPN and other popular
channels. Negotiations in this case dragged on for six months.

Consumer uncertainty about Dish Network’s services may have contributed to more
than one in five survey respondents describing their experience with the
satellite TV provider as “poor.” Despite poor perceptions of service, Dish’s TV
subscriber count remained effectively unchanged in 2013.



Employees also do not seem to like Dish Network. In reviews on jobs and career
community site Glassdoor.com, employees routinely cited poor pay and the
company’s unpleasant working conditions. In both 2012 and 2013, 24/7 Wall St.
labeled Dish Network as America’s worst company to work for.

ALSO READ: The Best (and Worst) Paying Cities for Women

3. Sprint
> Pct. ratings “poor”: 20.7%

This May, Sprint Corp. (NYSE: S) was fined $7.5 million for failing to honor
customer requests and continuing to deliver unwanted marketing calls and texts.
The settlement was the largest do-not-call penalty the FCC had ever reached.

Poor customer treatment such as this may partly explain Sprint’s exceptionally
poor performance on our customer service survey. More than one in five
participants rated the company’s service as “poor.”

In July of last year, Sprint Nextel, the third largest wireless communications
company in the nation in terms of revenue, merged with Softbank. Despite the $22
billion deal, Sprint has continued to lose subscribers, even as competitors have
been adding millions of new customers.

Sprint declined an interview. In a written response, the company claimed it has
seen “faster data speeds, improved overall performance” and “significant
reduction in dropped and blocked voice calls” in areas where 3G voice systems,
4G LTE, and Sprint Spark have been introduced.

In another attempt to improve the company’s position, Sprint is currently
expected to pursue a merger with T-Mobile. The impact on customers remains to be
seen. Regulators appear to be concerned that a deal would reduce options for
consumers.

2. Comcast
> Pct. ratings “poor”: 24.7%

The customer experience at Comcast is so bad even CEO Brian Roberts has admitted
the company needs to do better.



Nearly one in four survey respondents reported a “poor” experience with Comcast,
which may explain why the company, like much of the industry, lost video
subscribers in the past two years.

Poor customer service ratings may also be due to rising monthly bills. Even as
the company shed subscribers, revenue from video services rose by 2.9% in 2013,
due to increased rates and customers adding services. The company’s financial
report warns investors that potential customer service regulations imposed by
Congress and the FCC could have adverse effects on business.

Just this week, Comcast was embroiled in yet another customer service fiasco
when a call of a customer attempting to cancel the service went viral. Comcast
has issued an apology and said it was “very embarrassed.”

Both Congress and regulators are investigating whether Comcast’s merger with
Time Warner Cable will be bad for customer service and customers’ wallets. Both
companies are in this year’s Customer Service Hall of Shame.

ALSO READ: 10 Brands that will Disappear in 2015

1. Bank of America
> Pct. ratings “poor”: 24.8% (banking), 22.0% (credit card)

Bank of America has attempted to improve its image in the eyes of consumers in
recent years. While it has made some progress, it still suffers from low
customer approval, even within the poorly rated banking industry. Nearly a
quarter of respondents reported a “poor” experience with Bank of America’s
banking operations, worse than any other company.

While banks are being penalized for their role in the financial crisis — which
partly explains the industry’s poor image — strict regulations and fines may be
making the problem worse. According to Bove, “The U.S. government has fined Bank
of America over $50 billion,” resulting in cost-cutting measures that ultimately
may worsen the customer’s experience. Bank of America is again facing a fine of
as much as $17 billion related to its past selling of toxic mortgage-backed
securities.

Continued branch closings may also impact customers’ experiences with the bank.
In 2013, Bank of America cut its total number of branches by 6%, and the bank
continues to shed locations as consumers increasingly use mobile devices for
banking.



Click here to see the customer service hall of fame



Methodology

24/7 Wall St. commissioned Zogby Analytics to conduct an online national survey
in which 2,500 randomly chosen respondents rated customer service at 150 of the
best-known companies in the country. Fifteen industries are represented in the
study.

Respondents were asked to evaluate customer service quality as “excellent,”
“good,” “fair” or “poor.” Of the 150 companies, 108 companies had at least 500
valid responses. Companies with fewer valid responses were not considered.

The 10 companies with the highest percentage of “poor” responses represent our
Customer Service Hall of Shame. Using the same methodology, the 10 with the
highest percentage of “excellent” responses became our Customer Service Hall of
Fame. This is the first year 24/7 Wall St. has conducted this study.

In previous years, the study was conducted by MSN and Zogby Analytics.

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