[HN Gopher] Chime has been suddenly closing accounts, not return...
___________________________________________________________________
Chime has been suddenly closing accounts, not returning customers'
money
Author : danso
Score : 133 points
Date : 2021-07-06 19:54 UTC (3 hours ago)
(HTM) web link (www.propublica.org)
(TXT) w3m dump (www.propublica.org)
| sp332 wrote:
| Could you change the title to include "Chime" as the name of the
| company?
| ewmiller wrote:
| That's why I don't trust any of these new trendy banking apps;
| better to stick with established institutions IMO. Not that
| they're great either but at least you won't be in a situation
| like this, or at the very least they'll have better customer
| support.
| gricardo99 wrote:
| credit unions are great. Typically very customer friendly (i.e.
| no stupid monthly fees), many have been around a long time, and
| have rolled-out decent online banking options and mobile apps.
| cowmoo728 wrote:
| It's why I switched everything to a combination of [boring
| established brokerage] and a credit union that's been around
| for almost 100 years. Their apps are mediocre and some of the
| more complicated account changes require a mix of faxed forms
| and phone support that's only available during normal business
| hours. But they're unlikely to mess things up very much and
| they're hopefully less likely to sell or leak all of my
| financial and personal information. And if something goes wrong
| my brokerage has in-person customer support branches around the
| country.
| kapp_in_life wrote:
| I'm in the same boat, with half my checking in the brokerage
| and half in the credit union. Some recent changes to the
| credit union(merging/renaming/ui changes) have been
| frustrating me and I've thought about rolling everything to
| the brokerage's offering, but the redundancy is nice for a
| situation like described here. Knock on wood though since it
| hasn't happened yet.
| waltwalther wrote:
| If you had been aware of this before opening your Chime account
| would you still have done so? I would not. Losing my money, and
| then having it tied up in a frustrating and incompetent process
| is just not worth the risk. I will be closing my Chime account
| immediately. This needs more attention.
| axaxs wrote:
| I don't see how anyone can take Chime seriously.
|
| I have a habit of checking out most new free banking apps,
| looking for the best deals, UI, security, etc.
|
| Chime immediately started sending my phone notifications with
| tons of emojis in them. It felt completely childish and I
| couldn't believe this was a legitimate company that people would
| put tons of money into.
| sp332 wrote:
| I used a (now-defunct) app called Penny and it did this. The
| app was very useful for budgeting so I just had to look past
| the emojis.
| mkmk wrote:
| Isn't that just a generational thing? Presumably this is an
| intentional communication choice designed to appeal to younger
| users. So, even though it doesn't match your own preferred
| communication style, it could actually be seen as a sign of
| competence in knowing one's target market and how to best reach
| them.
| hndirect wrote:
| It's the "How Do You Do Fellow Kids?" meme come to life.
| ericlewis wrote:
| that was indeed our theory too
| ericlewis wrote:
| people weirdly enough really enjoy those, but marketing has
| gotten out of hand lately.
| TillE wrote:
| Do they? I mean, even if that's how someone talks to their
| friends, from some faceless company's mass communication it's
| at best inauthentic and try-hard.
| ericlewis wrote:
| when they were smaller it was more endearing, I agree now
| that it is too much.
|
| edit: and disingenuous at best
| willcipriano wrote:
| I am really looking for a Jeeves[0] like demeanor when you
| have thousands of my dollars. "Yes sir, right away sir."
| not "Sure bro ;) *eggplant emoji*"
|
| [0]https://en.wikipedia.org/wiki/Jeeves_and_Wooster
| bazzargh wrote:
| Except Jeeves would add "...but is sir sure that
| investing such a large sum in Cousin Eddie's racehorse is
| wise? You will recall his "sure thing" at the parish
| tombola."
|
| And then later when you lose your shirt, you'd find he'd
| not actually bet on the horse you asked for, because he'd
| spoken to Captain Aykroyd's man who'd explained that the
| fix was in, Greased Lightning had had a plate of porridge
| to slow him down for breakfast; he'd instead put it all
| on Dreadnought at 8 to 1, which had won by a length.
|
| You know come to think of it that's exactly who I want
| managing my finances.
| __david__ wrote:
| That seems like an incredibly petty thing to be bothered by. I
| really hate the idea that companies have to act in some fake
| capital P Professional way for people to take them seriously. I
| really don't care if my bank (or whatever) wants to exude
| personality. It just means they don't have some boring,
| gatekeeping PR flack in charge...
| tpae wrote:
| This is why crypto is the future
| withinboredom wrote:
| Crypto isn't as vulnerable to this, but it's just as
| vulnerable. POS Apps could blacklist your address and not
| accept payments from you just as easily and trace funds that
| leave that wallet and blacklist them; all in the name of fraud
| prevention.
| TravisHusky wrote:
| Yeah, it will be great when the average person loses their
| private key(s) and then has no recourse to get their money
| back.
|
| Let's say they have a 3rd party managing their keys so they
| don't lose them, well congratulations you just reinvented
| banking but in a way that inherently destroys the environment.
| judge2020 wrote:
| > Chime is a financial technology company, not a bank. Banking
| services provided by The Bancorp Bank or Stride Bank, N.A.;
| Members FDIC
|
| Regardless of this, those bank accounts are still FDIC insured,
| and thus they're subject to the same regulations, right? When I
| closed my Bank of America account they were insistent that any
| transactions or deposits after it was closed would be mailed to
| me in the form of a bill or a check, respectively. Is that not a
| requirement for all FDIC insured accounts?
| otterley wrote:
| IAAL but this is not legal advice.
|
| It sounds like it depends. If the bank has good reason to
| believe the funds are fraudulently sourced, then it may
| lawfully be entitled to hold them until it can be shown (either
| to their satisfaction, or to the satisfaction of a court) that
| the funds are legitimate.
| elliekelly wrote:
| It also depends on whether and how the funds actually made it
| to the FDIC insured institution. If Chime didn't deposit the
| funds or if the funds weren't deposited in a segregated
| custody account FBO Chime customers (as opposed to co-mingled
| with Chime's corporate cash) then it's a lot less of a
| guarantee because they could be tied up with potential
| creditor claims to Chime's cash.
|
| That being said, the article makes me think this is the
| custody bank's AML process at work and Chime wasn't prepared
| for the customer service aspect of on-boarding a bunch of
| "high risk" clients and then almost immediately having those
| accounts closed due to the risk assessment.
| ericlewis wrote:
| the user accounts are def segregated from corp
|
| - ex-chimer
| ericlewis wrote:
| it is almost certainly Bancorp that requested this -- not
| Chime itself.
| sp332 wrote:
| Does that mean that each customer has an account at one of
| those banks? Maybe they could call them up directly and get
| their money back.
| thoughtpalette wrote:
| I had an fraudulent account opened in Chime with my name/info
| (about a year ago). I contacted support when I received some
| weird marketing email for this service I never signed up for. I
| tried to talk to their support as it was obviously fraudulent and
| they wanted me to send in License/Docs proving my identity.
| Didn't trust them with a photo copy of my license since they were
| obviously terrible and just froze my credit.
|
| Got the email today that the account was finally closed. Stay as
| far away from this company as you can.
| otterley wrote:
| This is a good reminder that the best way to get your money back
| from an institution that is unfairly keeping it from you is
| either to file suit (in CA, you can sue for up to $10,000 in
| small-claims court), or hire an attorney. Self-help and
| complaining online rarely works. Phone calls work even less.
| astrange wrote:
| Hiring an attorney is a good way to not have any money since
| you used it to pay the attorney. (And you have to find one -
| for some reason there's a phrase "my lawyer" but what kind of
| person "has a lawyer" and why would that lawyer know how to do
| everything?)
|
| Just file a CFPB complaint: https://www.consumerfinance.gov
| otterley wrote:
| > Just file a CFPB complaint: https://www.consumerfinance.gov
|
| "Just <do x>" is considered facile and sometimes rude, if not
| harmful; it implies that things are easier and/or more
| effective than they actually are. (The CFPB does not
| represent you personally, and is not obligated to act on your
| behalf, unlike an attorney.)
|
| > Hiring an attorney is a good way to not have any money
| since you used it to pay the attorney
|
| It depends on how much money is on the line. Many small-
| claims courts don't even let you have an attorney, and the
| filing fees are small and the effort to file is minimal. On
| the other hand, if there's a lot of money at stake, having an
| attorney can pay off.
|
| And there's always somewhere in between: having an attorney
| send a demand letter can sometimes yield good results,
| without necessarily breaking the bank. Getting an attorney
| involved doesn't necessarily imply that you're going all the
| way to trial and judgment.
|
| > And you have to find one
|
| You also sometimes have to find a plumber when a pipe springs
| a leak... Life isn't perfect, and that's why these people
| exist.
| gruez wrote:
| If all your money is parked in one bank account, you're
| probably too busy figuring out how to buy groceries or pay
| bills, and don't time for a daytrip to an attorney's office or
| courthouse.
| techsupporter wrote:
| > The sudden account closures have put financially vulnerable
| customers under stress.
|
| Of course they have. It's no accident that accounts like these
| are _heavily_ marketed to people with terms like "faster access
| to YOUR money" and "virtually no fees" and "manage YOUR MONEY
| from anywhere, down to the penny!" These companies are targeting
| people for whom every single dollar is of vital importance.
|
| To then yank the accounts right as a large deposit from a
| government agency lands is malfeasance, or at least immoral.
|
| The vast majority of us who post on this site have plenty of
| money, or at least credit, in reserve so that even losing $10,000
| worth of deposit isn't crippling. It's bad, for sure, but it's
| not "I'm homeless starting tomorrow" bad. We are not the target
| market for apps-that-should-be-proper-banks like Chime.
|
| > She was directed to a passage in the company's account
| agreement that states, "Chime and/or Bank may suspend, freeze, or
| close your Account for any reason with or without notice"
|
| Yup, sounds about right. And of course there's a binding
| arbitration agreement, requiring all arbitration actions to be on
| an individual basis.
|
| So customers can be turned away with no reason, no recourse, no
| private right of action against the offending company, and no
| ability to group together to push back on a larger foe.
|
| This is, no pardon requested, fucking bullshit. I loathe that
| we've gotten so deep into contracts of adhesion and abstractions
| between supplying company and supplier and third-party
| relationships and "oh it's someone else's problem" and automated
| customer handling.
| syshum wrote:
| People like this should be using credit unions, not banks.
|
| Credit Unions where created to service customers that would not
| profitable for a normal bank, many decades ago I was one of
| those customers... Still today, even though my financial
| situation is far better, refuse to put any of my money in bank
| after the treatment I received from them. I have been with my
| current credit union for 20+ years, I love them, every loan I
| have gotten from auto to mortgage in the last 15 years is also
| run through a credit union...
|
| Credit Unions is where it is at, people need to be educated to
| use them
| mindslight wrote:
| While there seems to be a correlation where credit unions
| have better service, it's not a hard rule. Small local banks
| can also be friendly and responsive.
|
| The key is to avoid large companies where your call will be
| "placed in a bucket of stomach fluid", and even worse, when
| you visit the branch the person trying to help you will be at
| the mercy of the same exact customer service line.
|
| I'm glad you found a smaller business to trust.
| pm90 wrote:
| Credit Unions don't take out splashy ads all over the place
| though (maybe they should).
|
| I agree with your point. Credit Unions are pretty safe and
| tend to be rooted in the community in which they operate in.
| techsupporter wrote:
| Sure, but consider the marketing. Opening an account at a
| credit union requires:
|
| - Knowing the credit union exists and which ones someone can
| join (not all of them are "anyone in [region]")
|
| - Going to the credit union during business hours (no mean
| feat; several of the credit unions around me have shorter
| hours on Friday and three hours on Saturday)
|
| - Qualifying for an account, and not just membership. Lots of
| credit unions pull Chexsystems--credit reports for checking
| accounts--and a report from the traditional Big Three and
| having poor credit will be a bar to an account (something
| that the ProPublica article points out as a reason people use
| Chime).
|
| Those steps even presuppose that you find a credit union
| that, itself, isn't abusive. I was a member of one that was
| outright terrible and had miserable fees, but I had to stick
| with them for a year longer than needed because of a
| bankruptcy. There's nothing endemic to a credit union that
| requires it to be a "nice" entity, just that their structure
| makes it more probable.
|
| And it all comes down to how many of us on this site are
| financially savvy or at least have a better understanding of
| the pros/cons of how banks and credit unions and "fintech
| apps" work. The people being targeted by the marketing for
| Chime are less likely to have that same set of information,
| and are winding up abused as a result.
| kstrauser wrote:
| Our CU lets you apply online. I've been to their physical
| location once in my life, and that's when a scammer stole
| my debit card number. I could either wait for the
| replacement to show up in the mail, or swing by their
| office to pick one up over lunch.
| kstrauser wrote:
| I agree. I got started with a CU because their service is
| _so_ much better than any bank I 've dealt with. There are
| nearly no service charges for normal things. I have access to
| a cooperative no-charge ATM network with about 30,000
| locations. I can get in-person service from credit unions I
| don't even belong to thanks to a large partnership network.
|
| A few years ago, we needed to buy another car. I filled out
| the loan application on my CU's website. Someone from the CU
| called me an hour later to tell me the APR and maximum loan
| amount, and to recommend a list of local dealerships that
| other members had good experiences with. The car salesperson
| did the usual "let me see if we can get you a better
| financing deal!" sort of thing, and when we showed him our
| loan paperwork, he stopped: "I've never seen an interest rate
| that low. I can't beat it. That's amazing."
|
| I love my credit union and I can't imagine a plausible
| scenario where I'd ever go back to using a bank.
| protomyth wrote:
| Credit Unions (at least around here) have started being just
| as bad as banks to get any services from. I know a few people
| who got jobs and then "weren't a good fit" for the local
| credit union. They went the Walmart route.
| inetsee wrote:
| "And of course there's a binding arbitration agreement,
| requiring all arbitration actions to be on an individual
| basis."
|
| The CFPB Arbitration Rule "prohibits covered providers of
| certain consumer financial products and services from using an
| agreement with a consumer that provides for arbitration of any
| future dispute between the parties to bar the consumer from
| filing or participating in a class action concerning the
| covered consumer financial product or service." [1]
|
| I also have this vague recollection of a story recently about a
| law firm filing large numbers of arbitration complaints against
| companies, resulting in very large bills for those companies,
| because they are required to pay for an authorized arbitrator
| for each and every arbitration complaint. Unfortunately, I
| can't find the link to the story.
|
| So it sounds as if the people being ripped off by Chime do have
| some recourse, if they can just get together with a law firm
| that specializes in class action lawsuits.
|
| [1] https://www.consumerfinance.gov/rules-policy/final-
| rules/arb...
| anonAndOn wrote:
| >large numbers of arbitration complaints
|
| Doordash tried to weasel out of their arbitration clause but
| was denied.
|
| [0]https://news.bloomberglaw.com/daily-labor-report/doordash-
| or...
| thathndude wrote:
| This is absolutely asinine. Find lawyers who will take these
| cases. Let's make them feel the pain!
| avs733 wrote:
| sure! lets have these people living at the absolute edge of
| their means take time, have the knowledge to find a good
| attorney, have transporation, and have the capital to pay a
| retainer...Meanwhile, not having access to their funds has
| serious immediate consequences that can (1) mean it the
| customer can't bring the case to fruition and/or (2) make any
| resolution effectively meaningless.
|
| This is where a justice system and a law system
| diverge...justice without meaningful access is symbolic.
| im3w1l wrote:
| In my ideal world this clause would be struck down as illegal,
| but not only that, the company would be fined for even trying
| to put that in the contract. Furthermore, the lawyers involved
| would receive formal warnings that they will be disbarred if
| they keep it up.
| ericlewis wrote:
| they changed their core values / agreements after I left but
| when I was there: DON'T HIDE BEHIND FINE PRINT was a core
| value. It no longer is as they've grown and that makes me
| quite sad.
| gruez wrote:
| >In my ideal world this clause would be struck down as
| illegal
|
| unlikely. A big part of the problem is that the government
| has deputized financial institutions with enforcing anti-
| money laundering and anti-terrorist financing laws, and those
| institution face stiff penalties in the event such
| transactions slip through.
| 41209 wrote:
| To be fair, any bank can freeze your account for any reason.
|
| You can mitigate this somewhat by having accounts with multiple
| banks, but even then they can all be frozen at once. The
| benefit of a traditional bank is at least you can show up with
| an ID and beg for your money.
|
| Chime does indeed market to those who aren't financially doing
| great, but it's a very complicated situation. Everyone should
| have a minimum of 3 months in living expenses saved, but very
| few do
| quanticle wrote:
| And what good does it do me to have three months, six months,
| or heck 3 years worth of living expenses saved if the
| financial institution I've saved it with tells me that the
| account has been closed and the funds have been confiscated?
|
| We make fun of old people who lived through the Great
| Depression for keeping their money as cash or gold, but if
| this is the future of finance, well, gold bars under the
| mattress are looking batter and better with each passing day.
| gruez wrote:
| >And what good does it do me to have three months, six
| months, or heck 3 years worth of living expenses saved if
| the financial institution I've saved it with tells me that
| the account has been closed and the funds have been
| confiscated
|
| You have those funds spread out across multiple accounts,
| so if one goes down you still have access to some cash. you
| know, like a high availability cluster.
| R0b0t1 wrote:
| They're talking about an event such as being put on the
| terrorism no banking list, or being abused with lawsuits
| that you can't win and having your money stolen via those
| lawsuits.
|
| It'd take having physical, inconfiscable assets to
| protect from that.
| gruez wrote:
| > They're talking about an event such as being put on the
| terrorism no banking list, or being abused with lawsuits
| that you can't win and having your money stolen via those
| lawsuits.
|
| That's not the impression I got. I was thinking of your
| account being closed by mistake because of fraud/AML
| system false positives, not because the legal system was
| invoked against you.
| lp0_on_fire wrote:
| Or, you know, we could champion legislation that would
| prevent these banking institutions from arbitrarily
| seizing your money.
| mindslight wrote:
| The feature that has been lost was actually a property of
| writing checks. When you use a debit card, or use a website
| to make an online payment, you're ultimately asking
| permission and the bank is free to say "no" with little
| repercussion. Whereas if you write a check on your account,
| pass it to someone else, who passes it to their bank, who
| presents it to your bank, your bank wantonly dishonoring the
| check would result in a much larger fallout.
|
| Push transactions also put the paying bank on the hook for
| whether the transaction was fraudulent or not. Whereas with a
| pull transaction, it is up to the receiving bank to clean up
| the mess from any fraud. This is why banks (especially
| smaller banks) will put daily limit on the ACH transfers you
| can initiate, but will process whatever externally-initiated
| ACHs land on your account.
| gruez wrote:
| >Whereas if you write a check on your account, pass it to
| someone else, who passes it to their bank, who presents it
| to your bank, your bank wantonly dishonoring the check
| would result in a much larger fallout.
|
| I doubt that the law would be on your side if the bank
| called and told you that your account was closed, and you
| continued writing checks. At best that would prevent
| situations mentioned in the article where your account was
| frozen without your notice, but you'll still be out $10k
| while that's being resolved.
| azinman2 wrote:
| But if any bank could freeze these assets, where do you
| suggest the 3 months be stored? Bitcoin? Under your mattress?
| wyager wrote:
| With regard to "automated customer handling" (I.e.
| intentionally wasting customers' time and energy in the hope
| they give up) - I can't help but feel that society has lost a
| critical social regulatory mechanism, in the form of being able
| to physically beat up people who repeatedly exhibit scummy
| behavior. If some airline or bank puts you on hold for 4 hours,
| there's no way to throw a few punches or whatever at the people
| who are responsible. For most of human evolution, there was
| always someone you could hold personally and physically
| accountable. Now that this check no longer exists, it's no
| surprise that kafkaesque bureaucratic bullshit has exploded in
| popularity with customer-facing megacorps. I don't really have
| a solution to propose here - maybe encourage people to
| vandalize corporate HQs if they're egregiously wronged? It
| doesn't feel like a very good solution.
| nn3 wrote:
| Seems to still exist in India
|
| https://www.bloomberg.com/news/articles/2020-12-18/riot-
| brok...
| gruez wrote:
| >I can't help but feel that society has lost a critical
| social regulatory mechanism, in the form of being able to
| physically beat up people who repeatedly exhibit scummy
| behavior. If some airline or bank puts you on hold for 4
| hours, there's no way to throw a few punches or whatever at
| the people who are responsible.
|
| Yes, beating up the low level, minimum wage employee who has
| zero power over your circumstances is definitely the right
| way to resolve disputes with a corporation.
|
| edit: /s
| wyager wrote:
| My comment is precisely that the people who are actually
| responsible for your problems are shielded from
| repercussions by either minimum wage support reps or
| automated phone systems.
| [deleted]
| gruez wrote:
| What are you suggesting, that without telephones, you can
| beat the front line worker up, in hopes that he'll get
| mad and beat his boss up, and the violence will continue
| up the chain until it reaches the person responsible?
| wyager wrote:
| No, not at all. I'm suggesting that the level of
| structural abstraction is a problem precisely because it
| prevents people from directing their rage where it
| actually matters.
| gruez wrote:
| Suppose your hypothetical was true, and whenever you had
| a grievance you would speak directly to an c-suite
| officer. What makes you think the corporate officer in
| question wouldn't take preventive measures to protect
| themselves from violence? Business in sketchy
| neighborhoods place their employees/cash register behind
| bulletproof glass to prevent this exact issue. If a small
| business can afford that kind of stuff to protect their
| minimum wage employee, I'm sure c-suite officers of
| multinational corporations can afford something equal or
| better.
| wyager wrote:
| If they had to bear the cost in any way, they would be
| incentivized to reduce the amount of pain they're
| inflicting on customers. And of course I'm not literally
| proposing that people go and beat up execs; I'm just
| pointing out that for basically however long human
| civilization has existed, the scale was such that you
| always knew _who_ , specifically, was causing you
| problems. Now it's all hidden behind a bunch of bullshit.
| gruez wrote:
| >If they had to bear the cost in any way, they would be
| incentivized to reduce the amount of pain they're
| inflicting on customers
|
| Maybe? That might nudge execs into providing better
| customer service experience, but if I were an exec I sure
| as hell am not going to let my well-being depend on good
| customer experience alone. Eventually you're going to get
| a crazed lunatic that good customer service can't defuse,
| and for that reason I'm going to still require physical
| barriers and/or armed bodyguards.
| [deleted]
| mjevans wrote:
| Translation for ya:
|
| Viva la Revolution - IE Off with the aristocrat's heads,
| is far less likely these days for lots of reasons.
|
| Though neither the parent author, nor I, are advocating
| for that response, I'm using it as an extreme to tug your
| frame of focus along the correct discussion axis.
|
| The least of which is that the super wealthy have both
| private and public security forces on speed dial. Even
| minor protest groups or 'gentleman's disputes' like a
| more basic bare assault of vigilante protest are also off
| the table. There is no available check against uncouth
| behavior which violates the social and moral
| expectations.
| gruez wrote:
| But how does that have anything to do with being
| "shielded from repercussions by either minimum wage
| support reps or automated phone systems"? If you really
| have a grievance against Chime's CEO or whatever, you can
| still inflict violence on them. Look up their corporate
| office address, procure a weapon, wait outside until they
| leave work, and then do... whatever. There are many
| reasons why we don't see people inflict violence on "the
| people who are actually responsible for your problems",
| but it's not because of "minimum wage support reps or
| automated phone systems".
| [deleted]
| quesera wrote:
| > society has lost a critical social regulatory mechanism, in
| the form of being able to physically beat up people who
| repeatedly exhibit scummy behavior
|
| Wow, that's the most poorly-thought out idea I've read in
| recent memory.
|
| A few more seconds of consideration should be enough to come
| up with all the reasons this is such a terrible idea.
|
| But one that I can contribute from a slightly unusual
| perspective (working adjacent to financial fraud detection):
|
| The aggrieved customer is _very often_ completely wrong about
| whom to blame for a problem. They are working with incomplete
| information (we all are), they 're in a heightened state of
| stress (money is at risk), they're grappling with bad models
| of confusing systems (finance is complicated), and at least
| half of them are less smart than average (by definition).
|
| I would say that about 10% of customer service requests start
| out hostile and accusatory. Some are literally threatening
| violence. And about 99% of the time, the aggressive customer
| is wrong.
|
| So how many innocent noses do you think should be improperly
| punched, for your social regulatory mechanism instincts to be
| satisfied?
| ebiester wrote:
| If things are so complex that someone can lose their money
| through an intricate set of rules, that's exactly the type
| of scummy behavior that we are talking about. It's not a
| matter of "whose" fault it is, but rather that a faceless
| group benefit from this type of behavior, and it is so
| complex that it is nearly impossible to avoid.
|
| And there are no consequences.
|
| Sometimes, it's a computer responsible for the decision.
|
| These would not be so lightly regarded if someone had true
| consequences for this behavior. It turns into a complete
| lack of societal trust, something that people in turn are
| taken advantage by.
| quesera wrote:
| Yes, some groups leverage that complexity for their own
| benefit. Absolutely true. See also: every complex system
| that exists.
|
| But some systems are complex because they're complicated.
| And the net of, say, regulated banking, is socially
| beneficial.
|
| So punish the scummy behavior with laws, of course.
| wyager wrote:
| I'm obviously not proposing it as a solution - just
| pointing out that this used to be part of the social
| regulatory calculus and now it's gone.
| quesera wrote:
| It's gone because it worked so poorly for society.
|
| Most obvious consequence: the physically-strong can get
| more justice than the weak. Which leads inevitably to:
| the physically-strong make the rules.
| ericlewis wrote:
| to be fair, this was never the intention of "automated
| customer handling" the system I built while working there
| though got ruined -- the actual low level employees at Chime
| do not in anyway agree with this automated bullshit.
| ipython wrote:
| Back in the banking crisis days, I applied for a mortgage
| modification. I'm on top of paperwork and fax like a boss, so
| I made sure all of our documentation was in order and
| submitted ahead of schedule. Regardless, the bank tried to
| use every trick in the book to delay. I ended up war dialing
| all the extensions around my contact to find someone who
| worked there with access to my files to push it along. Ended
| up succeeding and receiving my modification.
|
| Imagine trying that with google or Facebook or chime.
|
| I don't agree with the need for physical violence.
| Historically, we have had decent regulatory protections for
| customers. I feel like those protections are rapidly being
| eroded. The threat of reporting to the bank/insurance/etc
| regulator was real and triggered a response even in the most
| dense bureaucracies in my experience.
|
| Best story ever along these lines is when an angry homeowner
| who was wrongfully foreclosed upon ended up suing the bank,
| winning, then foreclosing on her local branch when they
| neglected to pay: https://abcnews.go.com/Business/bank-
| america-florida-foreclo...
| wyager wrote:
| I think this is illustrative of my point; only the most
| well-equipped people (lawyers, people who know how to
| wardial, etc.) have any chance of grappling with the
| kafkaesque bullshit of modern corporate bureaucracy. If
| amazon wrongs you, you're fucked. If a shopkeeper wrongs
| you, you can go yell at the shopkeeper. I don't know if
| there's any legal framework that can fix this. I even have
| to admit that it might not be socially optimal to fix this.
| perl4ever wrote:
| >If a shopkeeper wrongs you, you can go yell at the
| shopkeeper
|
| So, go buy your appliances from a local store, not Amazon
| or Lowe's or Home Depot. Do you, or do you not do that?
| Because you can totally do that.
| sbierwagen wrote:
| >I don't agree with the need for physical violence.
| Historically, we have had decent regulatory protections for
| customers.
|
| "When you vote, you are exercising political authority,
| you're using force. And force, my friends, is violence. The
| supreme authority from which all other authorities are
| derived."
|
| Regulatory protections certainly didn't arise from the
| void. If you trace them back the New Deal agencies, then
| you have to consider the widespread violence that forced
| their creation.
| Someone1234 wrote:
| When your relatively small banking app generates more consumer
| complaints than Wells Fargo, you're really doing something very
| wrong.
|
| I would caution that before people try to blame the victims here
| ("don't use small banks!" "don't use banking apps!" etc), these
| things happen with large/established banks too. With accounts
| just being randomly locked for a "fraud investigation" that can
| take weeks (particularly for cash movements over 10K).
|
| What my spouse and me are doing is we have two checking accounts
| at different banks with a different one of us as the primary.
| Pay-checks are received at one, and a scheduled transfer moves
| some money to the second, and bills paid from both. That way even
| if one of our accounts did get suspended while a hassle, we could
| weather is with relative ease.
| bserge wrote:
| This happens on the regular with established "normal" banks in
| the UK and other EU countries.
|
| I believe US banks also have the right to suspend accounts for
| "fraudulent activity", correct me if I'm wrong.
|
| Therefore, you can't expect banking startups to be any better.
| Fix it on a higher level.
| swiley wrote:
| >If you don't like it go somewhere else
|
| >Also crypto should be illegal
| chipotle_coyote wrote:
| The article starts out by comparing Chime to "normal banks"
| that haven't attracted nearly the same level of complaints; the
| situation may not be unique to Chime, but those banking with,
| well, _banks_ apparently haven 't been running nearly the same
| risk of "we took your money too bad so sad".
| withinboredom wrote:
| Banks have a well established situation for this. When my
| debit card purchased a whole boatload (literally) of shoes in
| China, my card and account was frozen.
|
| But guess what, I was still a customer of the bank. I had all
| the resources I'd normally have: customer support.
|
| From there, they shipped me a new card. I was still unable to
| buy groceries for a day or two, but I never lost access to my
| money.
| shkkmo wrote:
| One issue is that, as stated in the article, Chime seems to be
| much worse and have an order of magnitude more complaints per
| customer than actual banks.
|
| The other issue is that Chime is not legally a bank so is not
| regulated in the same way that banks are.
| the_snooze wrote:
| >The other issue is that Chime is not legally a bank so is
| not regulated in the same way that banks are.
|
| "The rules don't apply to us" is one hell of an unfair
| advantage to tout on a VC pitch deck.
| hocuspocus wrote:
| What we've seen in many cases is startup banks coming to the
| market with a streamlined onboarding (open your bank account in
| 5 minutes over videochat), and then realizing that many
| accounts are used for money laundering. They eventually get a
| warning from the financial authorities and subsequently
| implement fraud detection algorithms that might be a little too
| trigger happy, to be on the safe side.
|
| It wouldn't be an issue if you could appeal and talk to a
| human, but challenger banks are, by design, understaffed, and
| they have no legal obligation to explain why they're
| terminating your account.
|
| However I haven't heard of any bank (proper bank, with a
| license, challenger or otherwise) keeping your money in such
| case.
| boromi wrote:
| Is something like this possible with M1 Finance?
| linsomniac wrote:
| This sounds exactly like what has been reported as happening to
| One Finance over maybe the last month. Accounts being unexpected
| closed for "fraud" reasons, unable to say why they are closed,
| etc... One is also a "virtual bank" technology company that uses
| a banking partner. Reports are over in the subreddit for One:
| https://www.reddit.com/r/OneFinance/
| jonplackett wrote:
| I don't understand why people choose a bank based on anything
| except excellent customer service. Its the one thing you need
| from them urgently when something inevitably fucks up.
| ericlewis wrote:
| I lobbied for this heavily and was involved in the firing of CS
| lead who fucking sucked as his job (sorry for the language), it
| was always an uphill battle and one I was willing to die on.
| They still to this day do a shit job here.
| ericlewis wrote:
| Ex-employee of chime here, joined early on (think first 10
| employees) and spent half a decade working there.
|
| I can guess as to what is going on here.
|
| I am not sure if my NDA still covers me talking about stuff
| there, but most likely is what has happened was folks either: not
| using their accounts (this will trigger eventual closer) or
| legitimately engaging in practices that would be... improper in
| any banking system. It's important to note that Chime is _not_ a
| bank either. These closing actually most likely happened BECAUSE
| of Bancorp, and not because Bancorp wasn 't policing Chime
| properly. There is a lot of CSR practices that occur there that
| aren't great and that is mostly due to the fact they refuse(d?)
| to spend the money to scale up the actual human teams as well as
| finding folks who also didn't want to rip chime off themselves
| from the CSR department (I know of one such case that I can't get
| into).
|
| They are having serious growing pains which imo still is of
| course no excuse for not caring for the customers, but I have
| seen a lot of these cases and I have seen a lot of what people
| have been doing then run to the media to complain about, Chime
| doesn't just willy nilly close accounts without a serious reason.
| A lot of the times the customers are mad they couldn't pull a
| fast one on the risk team... Anyway, I am not really here to
| defend them. If you have any other questions I could probably
| answer them.
|
| That said, I chalk this up to their massive size (well over
| 12,000,000 customers) and a large portion of refusing to scale up
| Human Resources and instead trying to use to tech to deal with a
| lot of this. A few complaints like this aren't all that weird,
| bigger banks have way more complaints and do way worse things.
|
| Edit: I really can't talk about what I know would cause these
| things to happen, as, it would tip of fraudsters or people who
| legit have the feds after them. But the tools we used to figure
| this stuff out were pretty advanced.
|
| Edit 2: In my tenure, I saw lots of systematic fraud and also saw
| lots of those exact people take to social media to complain about
| it. That is anecdotal of course. But I saw a lot of shit that
| would blow your minds. I also saw many individuals engaging in
| fraud that they may not have even realized was fraud. One such
| example was the everyday Jane/John trying to deposit the same
| check multiple times when they knew full and well it was
| deposited first. Not to mention the number of dick picks people
| sent in via check deposit. Thanks to patents from other banks I
| was not allowed to deploy the ML platform I built for the mobile
| app to capture ONLY the check and its information, as opposed to
| human parts that shouldn't be in the picture.
|
| Edit 3: Again, I am not defending them, but if you are not in
| Finance then honestly you're out of your depth understanding what
| is going on here. No offense.
|
| Edit 4: This also reminds me of the time Bancorp went down for
| like 3 days and everyone took to twitter to say that China hacked
| Chime which was both funny, sad, and scary. Of course that isn't
| what happened, Bancorp is just fucking shitty.
| plttn wrote:
| As someone sitting kinda on the outside of fintech/finance, it
| just feels like there's a lot less value add and market
| oversaturation these days from "hipster app with Bancorp
| account".
|
| I previously had Simple (rest in peace), and was totally okay
| with it, but it clearly wasn't worth it to BBVA/PNC. I went to
| SoFi just because they're making moves to get their own
| charter, rather than sitting with Bancorp.
|
| Now you've got Robinhood, Credit Karma, Chime, etc etc all
| running Bancorp backing accounts so really there's no
| fundamental difference between any of them.
| ericlewis wrote:
| I can't really talk about it, but that charter things is...
| in their minds
| the_snooze wrote:
| >A few complaints like this aren't all that weird, bigger banks
| have way more complaints and do way worse things.
|
| The article directly contradicts what you're saying. Do you
| think the piece paints an unfair or inaccurate characterization
| of the complaints? (from the article)
|
| >Of the 920 complaints filed about Chime, 197 were tagged as
| involving a "closed account." The CFPB's complaints are labeled
| inconsistently, and many of the other 723 also detail problems
| involving accounts that were closed against customers' will. By
| comparison, Wells Fargo, a bank with six times as many
| customers and a lengthy recent history of misbehavior in its
| consumer bank, has 317 CFPB complaints tagged for closed
| accounts over the same time period. Marcus, the new online bank
| created by Goldman Sachs, with 4 million customers, has
| generated seven such complaints.
| ericlewis wrote:
| I think that people are more quick to react against Chime
| than they are the folks who also hold their insurance,
| mortgages, and possibly other things. Lest they have even
| _more_ issues with the bank. I don 't doubt Chime handles
| things wrong, but I do know that every person on that team
| when I was there did there best to try and resolve the issue.
| teachrdan wrote:
| This comment makes no sense. If my bank closed my account
| without warning and revoked access to all my funds, it
| wouldn't matter if they had my mortgage or not: I'm going
| to make a complaint.
|
| >I do know that every person on that team when I was there
| did there best to try and resolve the issue
|
| "My colleagues had good intentions back when I worked
| there" is nothing against the facts. If you had read the
| article, you'd see that Wells Fargo, the bank that everyone
| loves to hate--with 6x the customers of Chime!--has only
| slightly more complaints for "closed account."
|
| It's nice for you, as a former employee, to imagine that
| people are unfairly complaining more about Chime taking
| away all their money. But you could just as easily make the
| reverse argument: Chime users are less wealthy than users
| of other platforms and are therefore less likely to have
| the time and wherewithal to complain to the CFPB.
|
| You probably don't like that argument, but you have to
| admit that I am presenting exactly as much evidence as you
| are.
| ericlewis wrote:
| It's true, but the comment does make sense. It happens
| all the time, some people complain, some don't. Wells
| Fargo was more than happy to let fraudsters and all sorts
| of legal impropriety happen under their books. Might be
| one reason they had less complaints. Chime, doesn't have
| that benefit of being Wells Fargo's size tbh.
| bsg75 wrote:
| > I chalk this up to their massive size (well over 12,000,000
| customers) and a large portion of refusing to scale up Human
| Resources and instead trying to use to tech to deal with a lot
| of this.
|
| This is the unfortunate side of disruptive tech. It can't - and
| shouldn't - replace people. But it seems the allure of cost
| controls is too strong even if it hurts customers, and
| eventually the business.
| ericlewis wrote:
| I argued this constantly, I was in charge of mobile and it
| made me furious when bad CSR resulted in our actually pretty
| great mobile apps getting bad reviews. I am also guilty of
| creating the chat bot that is used by Chime, though I created
| it for a very different purpose from how it is used today and
| management basically mutilated something that actually worked
| pretty great.
| amacneil wrote:
| Sounds accurate from my experience working in fintech (crypto,
| not banking, but subject to many the same regulations). We
| would literally have customers with dozens of transactions
| referring to drug deals, close their account (as required by
| both federal law and our banking partners), and then have them
| go around filing complaints and starting reddit threads about
| how bad we are for closing their account. You can't take
| complaints like this at face value without knowing the full
| story (even if people complain to the media).
|
| The reality in the US is that financial institutions are liable
| for detecting any and all illegal activity on their platforms,
| reporting it to FinCEN, and closing accounts. If you fail to do
| this you lose your money transmission licenses and/or banking
| partnership. Depending on the exact nature of the issue,
| holding customer money hostage can even be a legal requirement.
|
| Scaling up support at fintech companies is definitely hard, and
| certainly the companies can and should do a better job of this.
| But dealing with the regulatory burden is also crazy difficult,
| and many folks doing shady stuff (fraud, drugs, money
| laundering, CP, etc etc) are more likely to use the newer
| platforms.
|
| Real banks often just don't have to deal with this as much,
| because they make you sign up in person, with ID, and ask you
| all sorts of questions about your source of income etc up
| front. However, real banks can and do also close customer
| accounts (used to be very common for folks who bought crypto
| with their checking account, for example).
| ericlewis wrote:
| This was common in our experience as well, without being a
| HUGE BANK you really do have to actually police this stuff.
| kotaKat wrote:
| They are. The last several(!) cases I've seen of people
| complaining Chime killed their accounts got (possibly
| fraudulent) PPP loans funneled into their accounts.
| ericlewis wrote:
| Then it sounds like alarms went off over at Bancorp and Chime
| is doing it's job
| Animats wrote:
| Their terms are awful.[1] They can do whatever they want.
|
| Compare the terms from Bank of America, especially the
| "Withdrawal" section.[2] There are restrictions on how soon you
| can withdraw how much, and they tell you those up front. You can
| get at least $225 the day after a deposit. For new customers
| within 30 days of opening the account, withdrawals over $5,525
| may be required to wait up to 5 days. For large cash withdrawals,
| you may need to go to a "cash vault" center and provide you own
| armored car. Stuff like that.
|
| [1] https://www.chime.com/policies/chime/chime-user-
| agreement/#t... [2]
| https://www.bankofamerica.com/salesservices/deposits/resourc...
| gruez wrote:
| >[1] https://www.chime.com/policies/chime/chime-user-
| agreement/#t...
|
| >You may terminate acceptance of this Agreement at any time by
| permanently deleting the Application in its entirety from the
| Authorized Device
|
| Who wrote this agreement? Clearly they have no idea how apps or
| online accounts work.
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