Perkstreet Financial Bank Review

NOTE 8/22/2013: I have just learnt that Perkstreet Financial Bank has been shut down as of 8/12/2013. I am sad to see that most people who were not able to redeem their hard-earned perks would lose them permanently. Luckily, I had redeemed my remaining perks just a week before Perkstreet folded. I also closed the account few days before they announced shutdown. In many ways, I am not at all surprised because of the way they treated their customers (including me). Please read below my ordeal with Perkstreet.

We have some bad news to share. Perkstreet Financial will be closing permanently, and ceasing all business operations. Even after Perkstreet Financial closes, you can continue to access your account in the same ways you do today, including your debit card, checks, and online bill pay. Online banking will continue to be available.
Consistent with the terms of our Rewards Program Agreement, we have discontinued our perks program and cancelled all perks balances as of today, August 12, 2013. Redemptions requested prior to August 12, 2013 will processed in accordance with your request.
We are incredibly sad to share this news with you. You helped us create a company that we believed would change banking for the better and we have worked tirelessly to accomplish that mission. Ultimately, however, we could not find the financial success required to continue building the business. We’ve written a deeper explanation of the situation here. We hope some added context helps explain why we've made this difficult decision.

My Recent Experience with Perkstreet

Perkstreet Financial is an online bank that provides completely online checking accounts. 

Perkstreet offers its services by joining forces with The Bancorp Bank and with the largest surcharge-free STAR ATM network. For deposits, it offers postage paid envelopes for you to mail your checks. If you have an emergency, you can also overnight your deposit via UPS for a next day delivery. In this regard, Perkstreet makes sure that you never miss having to visit the local branch of a traditional bank.

What separates Perkstreet from other traditional or online banks is the perks you can earn by using your debit card as a credit card. If you perform a PIN-less or signature based transaction, Perkstreet makes money in form of fees from merchants and it passes you some of those fees in the form of perks. You can redeem your accumulated perks as cash back money or as gift cards from major retailers.

Perkstreet started during the recession. During this time, they were encouraging (and rightly so) people to use their debit cards over credit cards so you cannot overspend money. To entice you to do this, Perkstreet offered you with cash back on your checking account. So, it was a win-win.

During the first two years, Perkstreet offered 2% reward for PIN-less transactions. Due to financial regulations on merchant fees or for whatever reason, they have since reduced this reward to 1%. For me personally, 1% reward is less attractive now because I can achieve the same thing using my credit card.

Perkstreet Financial also came to my attention at a time when Bank of America, which was my former bank, started charging monthly fees for their free checking account. The fees were waived only if I had an additional service from Bank of America such as Mortgage or Investments, which I did not. Perkstreet seemed like a good choice as I was looking to switch.

BUT, after three years of being a loyal customer with Perkstreet, a couple of incidents have led me to question their customer service.

My first bad experience was when I opened the account. They put limits on the amount of money you can transfer to Perkstreet and it doesn't increase until you stay with them for six months or so. Since I was switching my bank, this was a bit frustrating because I move a lot of money using a checking account to my IRAs, Investment Accounts, and Savings accounts maintained in other places.

My second incident was when I needed to add my wife to my account and make it a joint account. After sending my paperwork and all supporting documents, Perkstreet took over 3 weeks to open the account. This was after a few calls and email exchanges. I was expecting this process to take only about a week or two at most.

The third incident has taken place very recently. I recently received a check from my home insurance company towards a roofing claim. The check was addressed to ME & MY WIFE AND MORTGAGE COMPANY.

It is a common practice for insurance companies to write a multi-party check because technically the mortgage company owns the house until it is paid off. This forces the homeowner to get an endorsement from the mortgage company, which then requires insurance adjusters report, and estimate of the repair work from the contractor. This process is designed to ensure that homeowner truly making the repairs for which the claim is paid out and not just simply pocketing the money.

I called in my mortgage company about the process. I sent in all the requested documents, forms, and check. The check was endorsed. After this, I sent the check to Perkstreet for a deposit.

A few days later I received an email from the Perkstreet customer service stating that they were delaying deposit of my funds because they the check was made payable to a 3rd party. This was reasonable. BUT, it didn't stop there.

They mentioned that once the check is cleared, they will write me the exact same check addressed to me, my wife, and the mortgage company. For me, this was shocking. I had spent just about a month to get the check endorsed by the mortgage company. Now, Perkstreet was telling me that they had inadvertently deposited a check, which they shouldn't have accepted in the first place.

The next day, I called in the customer service to inquire about this.They told me that it is their policy not to accept 3rd party checks. I tried to explain how this check is different than a check made out to a total stranger other than the account holder. I and my wife were also the party on that check, the check came from a reputed insurance company, and it was endorsed by a mortgage company and stamped "With No Recourse" with official's signature. Plus, they were holding money for 10 days until it cleared. This should have been enough for Perkstreet to prove credibility of the check.

BUT, Perkstreet, didn't budge to my requests and pleas. They pointed me to their terms and conditions and told me how they are complying to their policy. They told me to find another bank to deposit the new check.

I found following information on terms and conditions on Perkstreet's website.

A third-party check is a check made payable to someone other than the owner of the account. All checks deposited must be payable to you; the Bank will not accept third-party checks (including checks made payable to a business but submitted for deposit to your account). Two party checks may only be deposited into a joint account bearing both names. In the event that the Bank receives and detects a third-party check, the Bank will not deposit the check into any account at the Bank. Third-party checks received in our Operations Center will be returned to you through the U.S. mail, and the Bank will not be liable for any checks that may become lost in the mail. If a check made payable to a third-party is deposited to your account before we detect it, we may without notice to you, place a hold on the funds deposited to your account for up to 7-10 business days to ensure the check clears the external bank account, then debit your account, and return the funds to you made payable to the Third-Party in the form of a bank check. Third Party checks deposited through remote capture or mobile deposit (if available) may be rejected during processing. The Bank reserves the right to reject a deposit if it is made payable to the Bank and contains no means to identify the account to which it should be credited.

Here is my problem with this policy and the way Perkstreet handled the situation:

(1) It is buried under terms & conditions and not many people read terms and conditions with a fine tooth comb. Any reasonable human wouldn't remember the policy when depositing checks.

(2) If you have such a broad-sweeping policy on how you define "third party" on the check, then by all means, I expect you to have checks & balances in places. The teller who processed my check should have caught it and simply returned the check to me. I would have been happy to take it to the other bank.

(3) Since what has happened has happened, as a private bank, they could have exercised discretion for this deposit and could have relaxed the policy for this one time. As further precautions, they could have called the issuer to make sure the check was authentic. Also, they could have called my my mortgage company to verify if the check was indeed endorsed by them. Since the check had been deposited and cleared after 10 days hold, they could have simply let it be.

BUT, Perkstreet was very strict and rigid with respect to their policy.

So, finally I made peace with the policy. Perkstreet sent me a new replacement check as per their standard 7-10 business day standards.

I got the new check. I sent it to the mortgage company. They found a flaw in this new check. It was NOT signed by any authority at Perkstreet. The signature line was simply blank. They tried to call Perkstreet to verify the check, but Perkstreet wouldn't verify, I suppose, for privacy reasons. So, I finally got all parties on a conference call and then the mortgage endorsed it. I received the check, finally, a week later.

I wish this drama had stopped there, but it didn't. I took the check to my local credit union where I had just opened the account to deposit this check. But, they would not accept the check because it was not signed by the issuer. I was told that this check was worthless without the signature from the issuer on the front of the check.

So, I called Perkstreet again, and this time, I was furious. How could such a major bank forget to sign a check?

I talked to a customer service rep. She wasn't kind. I made a request that since the check was already endorsed by the mortgage company, I would like to send the check back to them so they could sign it and return to me. But, Perkstreet wouldn't entertain such a request, citing some other policy. Sure, there is always a policy. I again made peace with it.

I told her the least they do could do was to expedite sending me the new check. She said, she would talk to a supervisor and will call me back within two hours. I waited that day, but nobody called.

Next day, the supervisor called. He said that he was confused, the notes weren't clear, so he called to ask what exactly I was asking them to do.

I ended up explaining how painful, time-consuming, and paperwork intensive it is for me to get a new check endorsed. This would be my third time convincing my mortgage company. I asked if I could overnight (on my own dime) the check with missing signature and they sign it return it to me. The supervisor said okay. I wrote a nice letter explaining the issue and sent the check. Now, at this time, this supervisor had told me that they have not acted on the previous action that lady was going to take (i.e. issue me a new check).

In the meantime, the lady who didn't call me, probably must have spoken to a different supervisor. I received a new check in the overnight mail.

But, by this time, I had already sent my missing-signature check to Perkstreet per my conversation with a supervisor. So, I waited for a few days and called the supervisor. I wasn't sure at this point, which check would have been cancelled (stopped payment) and which one would be valid. So, I called again to speak with the same supervisor who has okayed me sending the missing-signature check back to them.

Interestingly, this time 3 business days later, the supervisor told me that he didn't remember our conversation regarding him okaying me to send them the missing-signature check as opposed to Perkstreet sending me another brand new check. He could not find this info in his notes in their system. Since I was at the mercy of their internal CRM system and frankly the note-taking abilities of the representatives, I thanked him and ended the call.

The new check came in overnight. The mortgage company has endorsed the check. I have deposited this check at my local credit bank. It is now waiting to be cleared. This process has now gone on for 2 months now since I received the original check from the Insurance company.

During this drama, I have spoken with 6 different customer service reps at Perkstreet. I personally would not call 4 of them customer friendly as most of them took inaccurate notes for their supervisors to call me. None of them could transfer me to the supervisor while I was still on the phone or help me right there and then. It was a bit frustrating to have to explain the situation to different reps every time I called.

All these reps gave excuses of their policies. But, they never admitted that Perkstreet could also have been partially at fault for not returning my original check and not to mention not signing the replacement check.

I can't imagine this is an uncommon situation. Most people who own homes file claims at some point in their ownership. This could also be true when you buy car on a loan with a lien holder. I am sure their banks are lenient enough to deposit such check.

On the good side of Perkstreet, they did send me the second replacement check through overnight mail. But, this was after me pleading for it. I wish they could have done this on their own to show they go the extra mile to take care of the customer. Through this ordeal, I just didn't feel Perkstreet went any extra mile to help me or to meet my needs.

All these interactions combined have left a bad taste in my mouth about Perkstreet. The bank appears to be cold-hearted due to policies. I understand policies have their place and are there for good reason. But, I also know that serving customers is also (and should be) their (primary) goal. I don't believe Perkstreet has served me to their advertised level on the website. Apart from the completely online bank part, it is NOT any different from the traditional brick-and-mortar banks (may be perhaps it piggy-backs on a traditional bank to provide banking services).

To be fair to Perkstreet, Murphy's law may also have been at play here -- anything that can go wrong can go wrong. One wrong step can lead to many other wrong steps. I admit that I should have called before sending my original check. I should also have noticed the missing signature on the replacement check. But, there is no excuse for a professional bank that tries to differentiate based on no maintenance fees and 24-hour customer service.

Once this situation is sorted out, I am now going to close the Perkstreet account. I will stick with the new local credit union bank. They also do not charge any monthly fees, which was a reason why I went to Perkstreet.

Bottom Line: Don't ever deposit "multi-party" or "third-party" checks with Perkstreet.