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Robinhood is required by regulation to KYC their new account holders. Which typically is accomplished via doc auth. This is applicable to all financial service

Robinhood is required by regulation to KYC their new account holders. Which typically is accomplished via doc auth. This is applicable to all financial service companies, in the US at least.

acaloiar 4y ago
I'm familiar with KYC. KYC is actually the very reason why Robinhood customers should not be required to re-verify their identity because it stipulates that institutions both acquire and retain the identity information of their customers. With that said, my qualms are not with the fact that I had to re-verify; simply the manner in which it happened. The fact that they re-requested my identity tells you that this verification process was not in support of their KYC obligation, but likely a fraud-prevention mechanism. Which puts the manner in which it happened entirely within their control from a product perspective.
malux85 4y ago
So KYC them when you onboard them, NOT when they try to withdraw. “Oh no, that might hurt our signup and trading figures?! “ Well, DUH, but anything to fudge the numbers right?! Maybe if they make withdrawals even more difficult a percentage of users will abandon and then our assets under management numbers look better. This is exactly what’s happening, stop forgiving the dark pattern behaviour under the guise of compliance.
- EVa5I7bHFq9mnYK 4y ago
  That's why you should always start with small amounts, deposit $10, withdraw $10. If it works, repeat with $100 etc. Never keep large amounts there, withdraw as soon as trade is complete.
  - DakotaR 4y ago
    Alternatively, use a brokerage that's been around for decades and doesn't employ these dark patterns.
    - abawany 4y ago
      I agree, though these can deteriorate too. I've been with Vanguard for a while but was astounded as to how much the site and the customer support had degraded. Kind of worried about them but not enough to take a capital gains hit likely necessary to transfer the funds.
      - heavyset_go 4y ago
        You don't need to liquidate and realize capital gains.
      - aarbor989 4y ago
        You can do an in-kind transfer to move the assets over to a new firm without having to sell first. Definitely works for cash, stocks, mutual funds, and bonds. Not sure what else you can do it for
      - smaccona 4y ago
        You can probably do an in-kind transfer (see [0] and the 4th FAQ at [1]) to another brokerage with no capital gains hit because you’re not actually selling the asset. [0] https://finance.yahoo.com/news/kind-transfer-134617847.html https://finance.yahoo.com/news/kind-transfer-134617847.html [1] https://investor.vanguard.com/account-transfer/other-transfer-questions https://investor.vanguard.com/account-transfer/other-transfe...
heavyset_go 4y ago
Weird how they let you fund your account and make trades, then, but only have an issue upon withdrawal.
- bigiain 4y ago
  If you want to read that in the most favourable light, perhaps that's more AML/CTF regs. You can't be laundering money or funding terrorism until you try and get cash _out_ of your account. But like others are saying, there's ample evidence that Robinhood are despicable, so they sure as hell don't deserve and favourable interpretations of their trashier policies...
  - heavyset_go 4y ago
    Obfuscating how the money enters the system and is transferred is a crucial part of laundering, so I'd disagree that laundering only happens upon withdrawal.
- fragmede 4y ago
  ”Weird”. It’s an intentional UX design/friction thing. Hopefully their lawyers signed off on the interpretation of anti-money laundering laws is that they don’t count until the user tries to withdraw money.
  - heavyset_go 4y ago
    Yes, that was the subtext of my choice of words.
karaterobot 4y ago
Defining this acronym: > Know Your Customer (KYC) are a set of standards used within the investment and financial services industry to verify customers, their risk profiles, and financial profile. https://www.investopedia.com/terms/k/knowyourclient.asp https://www.investopedia.com/terms/k/knowyourclient.asp
- chrismcb 4y ago
  Calling KYC a set of standards is a bit if a misnomer. KYC checks are a legal requirement in the banking industry.

Robinhood is required by regulation to KYC their new account holders. Which typically is accomplished via doc auth. This is applicable to all financial service companies, in the US at least.

acaloiar 4y ago

I'm familiar with KYC. KYC is actually the very reason why Robinhood customers should not be required to re-verify their identity because it stipulates that institutions both acquire and retain the identity information of their customers. With that said, my qualms are not with the fact that I had to re-verify; simply the manner in which it happened. The fact that they re-requested my identity tells you that this verification process was not in support of their KYC obligation, but likely a fraud-prevention mechanism. Which puts the manner in which it happened entirely within their control from a product perspective.

malux85 4y ago

So KYC them when you onboard them, NOT when they try to withdraw. “Oh no, that might hurt our signup and trading figures?! “ Well, DUH, but anything to fudge the numbers right?! Maybe if they make withdrawals even more difficult a percentage of users will abandon and then our assets under management numbers look better. This is exactly what’s happening, stop forgiving the dark pattern behaviour under the guise of compliance.

EVa5I7bHFq9mnYK 4y ago
That's why you should always start with small amounts, deposit $10, withdraw $10. If it works, repeat with $100 etc. Never keep large amounts there, withdraw as soon as trade is complete.
- DakotaR 4y ago
  Alternatively, use a brokerage that's been around for decades and doesn't employ these dark patterns.
  - abawany 4y ago
    I agree, though these can deteriorate too. I've been with Vanguard for a while but was astounded as to how much the site and the customer support had degraded. Kind of worried about them but not enough to take a capital gains hit likely necessary to transfer the funds.
    - heavyset_go 4y ago
      You don't need to liquidate and realize capital gains.
    - aarbor989 4y ago
      You can do an in-kind transfer to move the assets over to a new firm without having to sell first. Definitely works for cash, stocks, mutual funds, and bonds. Not sure what else you can do it for
    - smaccona 4y ago
      You can probably do an in-kind transfer (see [0] and the 4th FAQ at [1]) to another brokerage with no capital gains hit because you’re not actually selling the asset. [0] https://finance.yahoo.com/news/kind-transfer-134617847.html https://finance.yahoo.com/news/kind-transfer-134617847.html [1] https://investor.vanguard.com/account-transfer/other-transfer-questions https://investor.vanguard.com/account-transfer/other-transfe...

heavyset_go 4y ago

Weird how they let you fund your account and make trades, then, but only have an issue upon withdrawal.

bigiain 4y ago
If you want to read that in the most favourable light, perhaps that's more AML/CTF regs. You can't be laundering money or funding terrorism until you try and get cash _out_ of your account. But like others are saying, there's ample evidence that Robinhood are despicable, so they sure as hell don't deserve and favourable interpretations of their trashier policies...
- heavyset_go 4y ago
  Obfuscating how the money enters the system and is transferred is a crucial part of laundering, so I'd disagree that laundering only happens upon withdrawal.
fragmede 4y ago
”Weird”. It’s an intentional UX design/friction thing. Hopefully their lawyers signed off on the interpretation of anti-money laundering laws is that they don’t count until the user tries to withdraw money.
- heavyset_go 4y ago
  Yes, that was the subtext of my choice of words.

karaterobot 4y ago

Defining this acronym: > Know Your Customer (KYC) are a set of standards used within the investment and financial services industry to verify customers, their risk profiles, and financial profile. https://www.investopedia.com/terms/k/knowyourclient.asp https://www.investopedia.com/terms/k/knowyourclient.asp

chrismcb 4y ago
Calling KYC a set of standards is a bit if a misnomer. KYC checks are a legal requirement in the banking industry.