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> The sudden account closures have put financially vulnerable customers under stress. Of course they have. It's no accident that accounts like these are heavi

> 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.
- gruez 5y ago
  >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 5y ago
    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 5y ago
      [deleted]
    - gruez 5y ago
      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 5y ago
        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 5y ago
        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.
syshum 5y ago
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
- pm90 5y ago
  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 5y ago
  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.
  - 5y ago
im3w1l 5y ago
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 5y ago
  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 5y ago
  >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.
  - im3w1l 5y ago
    There is a big difference between "we will freeze your assets when we have a reasonable belief that we are legally required to" and (to paraphrase) "we will do whatever the fuck we want for any or no reason, we may not even give notice".
41209 5y ago
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 5y ago
  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 5y ago
    >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 5y ago
      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 5y ago
        > 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.
thathndude 5y ago
This is absolutely asinine. Find lawyers who will take these cases. Let’s make them feel the pain!
- avs733 5y ago
  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.
inetsee 5y ago
"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/arbitration-agreements/ https://www.consumerfinance.gov/rules-policy/final-rules/arb...
- anonAndOn 5y ago
  >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-ordered-into-individual-arbitration-with-5-000-workers https://news.bloomberglaw.com/daily-labor-report/doordash-or...
dimmke 5y ago
I used to like these kind of bank startups because they usually have a much more polished user interface/well designed app, but they definitely do stuff like this. Simple was the first big one. Then they got acquired. Then shut down. I switched to a bank called N26 that after 2 months flagged my account for "suspicious activity" and asked me to reupload identification documents. They rejected every single attempt I tried then shut down my account. I then do some reading and turns out they do this to a ton of people. Having a fancy looking debit card and a nice app isn't worth the drama. I'd love to see one of these fintech startups actually last and not get acquired or turn into a way to market to consumers but it's looking pretty grim.

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.

gruez 5y ago
>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 5y ago
  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 5y ago
    [deleted]
  - gruez 5y ago
    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 5y ago
      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 5y ago
        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.

syshum 5y ago

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

pm90 5y ago
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 5y ago
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.
- 5y ago

im3w1l 5y ago

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 5y ago
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 5y ago
>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.
- im3w1l 5y ago
  There is a big difference between "we will freeze your assets when we have a reasonable belief that we are legally required to" and (to paraphrase) "we will do whatever the fuck we want for any or no reason, we may not even give notice".

41209 5y ago

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 5y ago
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 5y ago
  >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 5y ago
    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 5y ago
      > 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.

thathndude 5y ago

This is absolutely asinine. Find lawyers who will take these cases. Let’s make them feel the pain!

avs733 5y ago
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.

inetsee 5y ago

"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/arbitration-agreements/ https://www.consumerfinance.gov/rules-policy/final-rules/arb...

anonAndOn 5y ago
>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-ordered-into-individual-arbitration-with-5-000-workers https://news.bloomberglaw.com/daily-labor-report/doordash-or...

dimmke 5y ago

I used to like these kind of bank startups because they usually have a much more polished user interface/well designed app, but they definitely do stuff like this. Simple was the first big one. Then they got acquired. Then shut down. I switched to a bank called N26 that after 2 months flagged my account for "suspicious activity" and asked me to reupload identification documents. They rejected every single attempt I tried then shut down my account. I then do some reading and turns out they do this to a ton of people. Having a fancy looking debit card and a nice app isn't worth the drama. I'd love to see one of these fintech startups actually last and not get acquired or turn into a way to market to consumers but it's looking pretty grim.