SALT LAKE CITY — Some members of the Utah-based credit union America First are upset with the company after they learned of its plans to automatically transition some checking accounts to a new premium paid option.
The rollout plan was intended to show members the benefits of the new premium option, which incurs a $6 monthly fee, according to a credit union spokesperson. But for Kyle Brokaw, a member of America First for more than 30 years, he said he felt deceived.
In an email sent by America First to Brokaw this week, he was notified his account would automatically be switched over to a premium option and would be charged a $6 monthly fee — something he didn't want to happen. Nowhere in the email did it clarify he had the choice to opt-out of the new program, a choice he only learned about after getting in contact with a customer service representative, he said.
"I felt like it was kind of an underhanded thing to do," he told KSL.com. "I know it's not a ton of money, but … I'm sure older people are on a fixed budget — that would also severely impact them."
"It seems like a lot of people aren't even going to read that email," Brokaw said, noting the email notified him in bold lettering his account would be automatically converted, but the information about the cost was buried in the middle of a paragraph.
According to Nicole Cypers, a spokesperson with the credit union, every single America First checking account will be discontinued and converted to a new system, which offers a classic free version and a premium paid version.
Minors' accounts, or those owned by someone under the age of 18, will automatically be switched over to the classic free version and all adult accounts, regardless of the amount of money in them, will be automatically transitioned to the premium paid version. If a member has multiple checking accounts, only their main account will be switched to premium, with the rest transitioned to the new classic, or free, option. Business accounts will also not be converted to the premium account.
At some point, all members who meet the above criteria will be notified either by email or by letter that their account is eligible and will be moved over to the new system within 30 days of receiving the notice. Notices are being sent out in waves, with the first batch sent out last week, Cypers said.
The credit union has about 1,159,000 members. Cypers said their call center wouldn't be able to handle a large number of calls at once without the gradual rollout.
"They're being sent out in waves so that questions that are coming into our call center, we're able to manage that and help members so we don't have long wait times for them," Cypers said. "We're able to help them answer questions, talk them through it, convert them maybe if they choose (they don't want premium)."
If action isn't taken before the 30 days, the account will be converted into a premium account, but members won't be charged right away. The credit union offers the first two months free, after which they will be charged a monthly $6 fee.
"We're allowing them to try it so that they can see what a benefit this will be to them," Cypers said. "So that's why everyone's being converted to premium and then they have a choice that they can make — switch back to classic if they choose to."
There is a way to get the premium account free, but members need to maintain a checking balance of at least $1,500, have a direct deposit in the account of at least $500, and complete 20 or more transactions with their credit or debit card monthly.
The new premium checking account offers several benefits, according to their website, like no low-balance fees, unlimited monthly transactions, access to a nationwide network of more than 35,000 free ATMs, a mobile phone protection option, and a rewards payback plan.
There's nothing wrong with the plan itself, Brokaw said, but he takes issue with the way they chose to automatically sign members up regardless of what they wanted.
"I don't have any problem with them offering a service at all, but I probably would have looked into it a little more and see if it was advantageous for me; but the fact that they did it the way they did it, I wouldn't even sign up to it now — just out of principle," Brokaw said.
Regardless of the credit union's intentions, Brokaw said it felt like a ploy to make money off of unsuspecting members.
"I don't see how they could start charging somebody a fee for something that costs more when they're also offering the previous service that originally was signed up for without that person's authorization," Brokaw said.
America First should "back off," Brokaw said, and acknowledge it wasn't a good idea; instead, the credit union should have created an opt-in system or survey its members before rolling out any sort of big change to gauge interest.
"What they should have done is just marketed the new offering and offered it to people and said: 'Here are all the benefits and you can sign up if you want to,'" Brokaw said "But not just say: 'Hey, we're gonna move you over there unless you'd call us.'"
In an effort to warn people of the upcoming change, Brokaw penned a Facebook post informing members of the premium switch.
"I would expect this from banks, but not member-based credit unions," he wrote. Others also reached out to the credit union on social media, voicing their concern with the new system.
Currently, the credit union doesn't have plans to change its rollout method in response to member backlash, according to Cypers.
"We are so confident in the benefits that come along with this, we want individuals to look into it to see," she said. "It's a great way to research and try a new product with no cost for a couple of months.
"It's not going to be for everyone, but we are confident, again, that so many people will like the product that they'll want to stay converted to the premium."
Cypers said the credit union is giving members a "considerable amount of time to learn about the change and opt-out before they are charged." She added that they've received both positive and negative responses from members, but overall they have been "overwhelmingly positive."
"We've had a number of accounts who've already converted to premium checking when they got the notification and they're like, 'Yeah, we know this is great,'" she said. "I understand that there are some members (that responded negatively); but again, we want them to be able to try this product for free to be able to educate themselves and then, again, be able to take advantage of the product features and benefits and be able to do that free and make a choice. If they choose it's not for them, then they can choose to go back to the classic accounts."
While information about the credit union's new checking account is on their website, it doesn't offer details about the automatic sign-ups and 30-day period — that information is available to those who receive the email, or who reach out to customer service.
A post announcing the new premium account was made Wednesday afternoon on America First's Facebook page but did not mention that some accounts will be automatically transitioned to the premium account.
"During the introduction of this new account, we're waiving its cost for the first two months so you can try it out for yourself," the post reads. "We think once you've experienced everything it can do to save you time and money, you're going to want to make it your checking account for life. If it's not for you, we also offer a free Classic Checking account with no monthly fee."
At the bottom of a FAQ online page for the premium checking account, the credit union says those who would like to switch from the premium option to another type of checking account can do so by calling their customer service line, chatting them online, or stopping by a local branch.
Several hours after publication, America First set up a phone line dedicated to addressing questions about the premium checking account. Members can call the hotline at 1-888-476-2143. Those interested in opting out of the paid checking account can also do so through the credit union's online banking chat, or by visiting a local branch.
In a statement sent late Wednesday evening, the credit union said it has "always worked hard to provide the best service and products for our members and their families."
"Our intent and values have always been and will continue to be doing what is in our members' best interest," it read.
The statement in full reads:
"America First Credit Union has always worked hard to provide the best service and products for our members and their families. Our intent and values have always been and will continue to be doing what is in our members' best interest.
"Responding to members, we launched Premium Checking, which provides a multitude of services, savings and protections. Members can choose to convert to Classic Checking, which has no fee. However, we are confident members will see the value and benefits of Premium Checking that we are giving all members 60 days to try it for free.
"Premium Checking will give members access to more than $135 worth of additional services, savings and protections each month. Benefits include identity theft protection, mobile phone insurance coverage for every mobile phone you own, credit and dark web monitoring, premium account payback, ATM fee offsets, attractive coupon programs for discounts at local and national retailers, and more.
"While Premium Checking is now the preferred checking account because of the benefits it offers, those who would prefer to utilize our free Classic Checking account can do so by contacting a member service representative through our dedicated Premium Checking hotline at 1-888-476-2143, through online banking chat, or by stopping by their local branch.
"America First will continue communicating with our membership to offer the best products and service to our members. "