Wednesday, June 29, 2011

Backlash to Capital One's Acquisition of ING Still Raging

Amsterdam Zuidoost, ING BuildingImage via WikipediaMany people may have not heard that Capital One has purchased online bank ING Direct for $9 billion . 

Under the terms of the deal, Netherlands-based ING Groep will receive $6.2 billion in cash and $2.8 billion in the form of Capital One shares. That will make ING the largest single shareholder in Capital One after the deal closes.

ING will also have the right to be represented by a member of Capital One's board of directors.

Capital One is best known for its portfolio of credit cards. But the company also has about 1,000 branches, mostly in New York, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia.


Acquisitions like this happen all the time but the reaction because of it has rarely been seen. Many social media sites like Facebook have seen the backlash first hand of customer complaints of this sale. In chat rooms, forums, and blogs ING customers are venting their frustration. Their reactions are almost like they have lost heir best friend. The amount of emotion and dejection is almost unheard of in this type of news. It only goes to show of how a company can find the needs of it's customers and successfully fulfill them. Thus creating happy customers and a prosperous company.

The reason for the sale of the company is European regulators, as a condition of financial assistance given to ING's Dutch parent company during the bank crisis, demanded that they sell off the ING Direct division of the company. ING Direct, headquartered in Wilmington, Del., offers savings accounts, checking accounts, mortgages and brokerage services to 7.7 million customers.

The problem many people have with the sale is that they are worried that ING's reputation, low fees, low maintenance, and great customer service would be thrown to the wayside because of the new ownership.

ING is so popular because they offer a basic savings account with no minimum balance and great interest rates. Combined with no monthly fee, customers have flocked to the bank and made it one of the most popular online banks. It has become the gold standard of online banks.

Thus lies the problem people have. Capital One's dismal reputation proceeds it. Capital One has a reputation of a terrible fee structure and poor customer support. ING customers know this and are rightly upset. They have enjoyed a great banking experience and now are worried it will all disappear. How many ING customers will leave the online bank, will be determined as time goes by.

3 comments:

  1. I will leave in a heartbeat, Dave. Capital One is horrible!

    ReplyDelete
  2. Capital One's reputation is horrible. It's the poster child for greedy corporations. It's sad to see ING go.

    ReplyDelete
  3. Wife and I used ING for the last few years to do all of our household banking and host our savings. Already signed up with a local credit union, just waiting on the money to transfer.

    Some might say it's better to wait and see what happens. Or that any changes won't be felt for at least a year. But why wait until something sucks? If you know it will suck already, just save time and energy and switch now.

    ReplyDelete

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