28 ms·

Chime has been suddenly closing accounts, not returning customers’ money

156 points by danso 5y ago

sp332 5y ago
Could you change the title to include "Chime" as the name of the company?
bserge 5y ago
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.
- chipotle_coyote 5y ago
  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 5y ago
    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 5y ago
  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 5y ago
    >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.
- swiley 5y ago
  >If you don't like it go somewhere else >Also crypto should be illegal
- hocuspocus 5y ago
  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.
ewmiller 5y ago
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.
- cowmoo728 5y ago
  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 5y ago
    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.
- gricardo99 5y ago
  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.
axaxs 5y ago
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.
- ericlewis 5y ago
  people weirdly enough really enjoy those, but marketing has gotten out of hand lately.
  - TillE 5y ago
    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 5y ago
      when they were smaller it was more endearing, I agree now that it is too much. edit: and disingenuous at best
    - willcipriano 5y ago
      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 https://en.wikipedia.org/wiki/Jeeves_and_Wooster
      - bazzargh 5y ago
        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.
tpae 5y ago
This is why crypto is the future
- withinboredom 5y ago
  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 5y ago
  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 5y ago
> 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 5y ago
  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 5y ago
    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 5y ago
      the user accounts are def segregated from corp - ex-chimer
  - ericlewis 5y ago
    it is almost certainly Bancorp that requested this -- not Chime itself.
- 5y ago
otterley 5y ago
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.
- gruez 5y ago
  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.
- astrange 5y ago
  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 https://www.consumerfinance.gov
  - otterley 5y ago
    > Just file a CFPB complaint: https://www.consumerfinance.gov 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.
techsupporter 5y ago
> 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.
- wyager 5y ago
  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.
Someone1234 5y ago
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.
boromi 5y ago
Is something like this possible with M1 Finance?
jonplackett 5y ago
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 5y ago
  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.
- tgsovlerkhgsel 5y ago
  I choose my bank based on low cost, because that's the only really visible variable. "Excellent customer service" for me means never having to talk to the bank because everything just works, and it's incredibly difficult to judge how good banks are at that.
  - jonplackett 5y ago
    Nothing ever works perfectly all the time though. I find it's best to judge companies (and people) by how well/badly they recover from cock-ups. Same approach to trusting reviews - ignore good ones, read the worst ones and see if you can live with whatever criticism you find.
ericlewis 5y ago
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.
Animats 5y ago
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/#termination https://www.chime.com/policies/chime/chime-user-agreement/#t... [2] https://www.bankofamerica.com/salesservices/deposits/resources/deposit-agreements/ https://www.bankofamerica.com/salesservices/deposits/resourc...
- gruez 5y ago
  >[1] https://www.chime.com/policies/chime/chime-user-agreement/#t 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.
  - tgsovlerkhgsel 5y ago
    This is amazing. "Just delete the app" was commonly proposed as a joke solution on /r/wallstreetbets for people who managed to get their account deep into the red with one of the "infinite leverage" exploits.
- kevin_b_er 5y ago
  This is because Bank of America is a bank and Chime is not. Regulation CC requires much of what you just listed. First $200 available fast, and within a few days, the first $5000. > But remember, the Expedited Funds Availability Act requires the first $200 of a deposit that is not already subject to next-day availability to be made available by the first business day following the day of deposit. > Deposits into accounts of new customers (open for less than 30 days)--Next-day availability applies only to cash, electronic payments, and the first $5,000 of any other next-day items; the remaining amount from next-day items must be available by the ninth business day. You may choose any availability schedule for deposits of other checks into the accounts of these new customers. https://www.federalreserve.gov/pubs/regcc/regcc.htm https://www.federalreserve.gov/pubs/regcc/regcc.htm https://en.wikipedia.org/wiki/Expedited_Funds_Availability_Act https://en.wikipedia.org/wiki/Expedited_Funds_Availability_A...
thoughtpalette 5y ago
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.
- FDSGSG 5y ago
  What could they have done better here? I'd be more concerned had they just closed the account without verifying your identity, that would be bad.
  - thoughtpalette 5y ago
    They could've sent me a confirmation link since the email was linked but the login credentials were the fraudsters (couldn't reset via email). Though that obviously has issues as well. I'm not entirely sure, but there was no way I was going to give out sensitive information (imo) to a website that I'm not familiar with. Even at the time I was trying to get support, It felt like the company wasn't even legit. No great answer here. Maybe escalate to a manager and have a more involved conversation.
waltwalther 5y ago
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.
linsomniac 5y ago
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/ https://www.reddit.com/r/OneFinance/
71a54xd 5y ago
This is why I refuse to fuck around with "smart" banks / credit cards of any kind. It's just not worth this kind of hassle, where the best case scenario is waiting around 3-4yrs for the government to print your money back to you...
hnarn 5y ago
In the EU at least there's directive 94/19/EC[1] which I believe stipulates that deposit-guarantee schemes have to be in place in all EU countries that protect customers from losing their money in the event that a bank goes bankrupt or withholds their money. Is there something similar in the US? [1]: https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:31994L0019&from=sv https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CEL...
- nomoreplease 5y ago
  There is fdic insurance up to $250k
  - hnarn 5y ago
    According to Chime's website, "Chime accounts are insured up to the standard maximum deposit insurance amount of $250,000 through our partner banks, Stride Bank, N.A. or The Bancorp Bank, Members FDIC",[1] so while that doesn't help anyone who needs their money immediately it's at least a comfort I guess. [1]: https://help.chime.com/hc/en-us/articles/224459628-Are-Chime-Accounts-FDIC-insured- https://help.chime.com/hc/en-us/articles/224459628-Are-Chime...

156 points by danso 5y ago

Could you change the title to include "Chime" as the name of the company?

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.

chipotle_coyote 5y ago
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 5y ago
  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 5y ago
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 5y ago
  >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.
swiley 5y ago
>If you don't like it go somewhere else >Also crypto should be illegal
hocuspocus 5y ago
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.

ewmiller 5y ago

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.

cowmoo728 5y ago
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 5y ago
  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.
gricardo99 5y ago
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.

axaxs 5y ago

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.

ericlewis 5y ago
people weirdly enough really enjoy those, but marketing has gotten out of hand lately.
- TillE 5y ago
  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 5y ago
    when they were smaller it was more endearing, I agree now that it is too much. edit: and disingenuous at best
  - willcipriano 5y ago
    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 https://en.wikipedia.org/wiki/Jeeves_and_Wooster
    - bazzargh 5y ago
      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.

tpae 5y ago

This is why crypto is the future

withinboredom 5y ago
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 5y ago
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 5y ago

> 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 5y ago
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 5y ago
  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 5y ago
    the user accounts are def segregated from corp - ex-chimer
- ericlewis 5y ago
  it is almost certainly Bancorp that requested this -- not Chime itself.
5y ago

otterley 5y ago

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.

gruez 5y ago
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.
astrange 5y ago
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 https://www.consumerfinance.gov
- otterley 5y ago
  > Just file a CFPB complaint: https://www.consumerfinance.gov 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.

techsupporter 5y ago

> 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.

wyager 5y ago
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.

Someone1234 5y ago

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.

boromi 5y ago

Is something like this possible with M1 Finance?

jonplackett 5y ago

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 5y ago
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.
tgsovlerkhgsel 5y ago
I choose my bank based on low cost, because that's the only really visible variable. "Excellent customer service" for me means never having to talk to the bank because everything just works, and it's incredibly difficult to judge how good banks are at that.
- jonplackett 5y ago
  Nothing ever works perfectly all the time though. I find it's best to judge companies (and people) by how well/badly they recover from cock-ups. Same approach to trusting reviews - ignore good ones, read the worst ones and see if you can live with whatever criticism you find.

ericlewis 5y ago

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.

Animats 5y ago

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/#termination https://www.chime.com/policies/chime/chime-user-agreement/#t... [2] https://www.bankofamerica.com/salesservices/deposits/resources/deposit-agreements/ https://www.bankofamerica.com/salesservices/deposits/resourc...

gruez 5y ago
>[1] https://www.chime.com/policies/chime/chime-user-agreement/#t 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.
- tgsovlerkhgsel 5y ago
  This is amazing. "Just delete the app" was commonly proposed as a joke solution on /r/wallstreetbets for people who managed to get their account deep into the red with one of the "infinite leverage" exploits.
kevin_b_er 5y ago
This is because Bank of America is a bank and Chime is not. Regulation CC requires much of what you just listed. First $200 available fast, and within a few days, the first $5000. > But remember, the Expedited Funds Availability Act requires the first $200 of a deposit that is not already subject to next-day availability to be made available by the first business day following the day of deposit. > Deposits into accounts of new customers (open for less than 30 days)--Next-day availability applies only to cash, electronic payments, and the first $5,000 of any other next-day items; the remaining amount from next-day items must be available by the ninth business day. You may choose any availability schedule for deposits of other checks into the accounts of these new customers. https://www.federalreserve.gov/pubs/regcc/regcc.htm https://www.federalreserve.gov/pubs/regcc/regcc.htm https://en.wikipedia.org/wiki/Expedited_Funds_Availability_Act https://en.wikipedia.org/wiki/Expedited_Funds_Availability_A...

thoughtpalette 5y ago

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.

FDSGSG 5y ago
What could they have done better here? I'd be more concerned had they just closed the account without verifying your identity, that would be bad.
- thoughtpalette 5y ago
  They could've sent me a confirmation link since the email was linked but the login credentials were the fraudsters (couldn't reset via email). Though that obviously has issues as well. I'm not entirely sure, but there was no way I was going to give out sensitive information (imo) to a website that I'm not familiar with. Even at the time I was trying to get support, It felt like the company wasn't even legit. No great answer here. Maybe escalate to a manager and have a more involved conversation.

waltwalther 5y ago

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.

linsomniac 5y ago

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/ https://www.reddit.com/r/OneFinance/

71a54xd 5y ago

This is why I refuse to fuck around with "smart" banks / credit cards of any kind. It's just not worth this kind of hassle, where the best case scenario is waiting around 3-4yrs for the government to print your money back to you...

hnarn 5y ago

In the EU at least there's directive 94/19/EC[1] which I believe stipulates that deposit-guarantee schemes have to be in place in all EU countries that protect customers from losing their money in the event that a bank goes bankrupt or withholds their money. Is there something similar in the US? [1]: https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:31994L0019&from=sv https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CEL...

nomoreplease 5y ago
There is fdic insurance up to $250k
- hnarn 5y ago
  According to Chime's website, "Chime accounts are insured up to the standard maximum deposit insurance amount of $250,000 through our partner banks, Stride Bank, N.A. or The Bancorp Bank, Members FDIC",[1] so while that doesn't help anyone who needs their money immediately it's at least a comfort I guess. [1]: https://help.chime.com/hc/en-us/articles/224459628-Are-Chime-Accounts-FDIC-insured- https://help.chime.com/hc/en-us/articles/224459628-Are-Chime...