As you may know, First of America (see GSQ, November 1998) was recently purchased by National City Corp. As is the case with most mergers, customers were told that they would see very little difference in their day-to-day banking activities. Nevertheless, hundreds of customers in Michigan and Illinois saw quite a bit of difference when their debit cards were refused by Michigan merchants.
According to Ron Eiler, a spokesman for National City, the problem represents a fraction of their 300,000 weekly debit transactions. But, as you can imagine, if that fraction includes you, you don't really care that it's just a fractionóit's still you standing in the grocery line embarrassed because you got declined trying to purchase a loaf of bread or a gallon of milk.
First of America debit cardholders were still able to use their debit cards by choosing the "credit" option instead of the "debit" option on the POS terminal; both options would withdraw money from the checking account. This, of course, can lead to mass confusion. "Here, just press the CREDIT key and it will DEBIT your account."
The banks have blamed the problem on the processors. "The reason for the denial is a third-party processor," Eiler said. "Several third-party processors have not been able to update their systems properly to route the transactions."
National City corrected the problem within a few days.
