13 ms·

What Happens When Your Bank Isn't a Bank and Your Money Disappears?

55 points by gnicholas 2y ago

james1120000 2y ago
I lost over 150k in an investment trading company ; i was down because the company refused to let me make withdrawals and kept asking for more money…. I was introduced to a recovery agent called Gavin ray and he’s being really helpful, he made a successful recovery of 95% of my investment, and I am really grateful to him. If you are a victim of binary scam and needs to get your money back, and If you have been scammed and unable to make withdrawal of your funds I hesitate you contact Gavin ray he can restore your hope of getting your money back, contact email gavinray78 @ gmail . com
Brianfm 2y ago
[dead]
Gullitthompson 2y ago
[dead]
dorisbobby4 2y ago
[dead]
Night_Thastus 2y ago
And it's gone!
- southernplaces7 2y ago
  Wonderful bit of cultural context.. https://www.youtube.com/watch?v=-DT7bX-B1Mg https://www.youtube.com/watch?v=-DT7bX-B1Mg
gumby 2y ago
I'm considering using Mercury,* which is allegedly quite popular with startups. They do have all the usual KYC etc of a bank. Like the ones discussed in the article, Mercury also keeps customer funds in Evolve, among other banks (I guess they claim to spread your money around so you don't have more thank 250K in any one basket). So if I understand correctly, the problem is that I have no visibility to the back end, so if Mercury keels over I'll have trouble getting my money? * I used SVB for 25 years, but over the past few years their service declined and First Republic poached a lot of their good guys, so I switched to FRB. With a track record like that, perhaps Mercury should reject me?
- alephnerd 2y ago
  Have you considered JPMC? FRB's tech portfolio and team is now part of them, and a number of SVB accounts ik of move there as well.
  - gnicholas 2y ago
    Do they offer the sort of cash management that is Mercury's hallmark? Separately, I have heard a lot of bad things about Chase, and experienced some as well over the years. I'd be hesitant to open up an account there from a customer service perspective, although I assume the deposits would be safe at such a large mega-bank.
    - alephnerd 2y ago
      I can't speak for Chase. Most businesses ik are using JP Morgan Private Bank and Commercial Banking, and they should be able to use JPM Access
  - gumby 2y ago
    JPMC bough First Republic and already I’m ready to leave. Fees are high and many, and there’s no direct relationship like there was with SVB or FRB. Just a call center.
    - alephnerd 2y ago
      Were you using FRB for private banking or commercial banking? Private/Relationship banking might be lackluster with JPM depending on your account size. Idk if I'd trust a non-FDIC insured bank and any bank that isn't Basel 1/2 compliant so most Neobanks seem too risky. They anyhow prefer to use state chartered banks which tend to be significantly more brittle than nationally chartered banks.
      - gumby 2y ago
        I had both. I switched my personal to the Sanford credit union (I don’t keep a lot of cash in my account anyway). I’m not sure what to do about my startup’s account though. Chase doesn’t seem to understand startups anyway — you’re a small business or a big business. For the company’s money I want someone who gives a shit.
jjwtieke 2y ago
http://archive.today/LWmgP http://archive.today/LWmgP
jellicle 2y ago
In a properly regulated world, all of these clowns would be shut down today and some of them would go to jail. Instead we do no regulation, these "not-banks lying and claiming your money is safe" get to harm a lot of people, and the public further loses trust in everyone involved. To anyone reading this who has money in any business that claims not to be a bank but instead your money is super-safely stored in a real bank somewhere and so there's no risk to you: run away, run away fast. Get your money out and close your account. You're in a Ponzi scheme and you don't realize it.
- imtringued 2y ago
  In a properly regulated world, everyone would have some sort of personal insurance for counterparty risk. You pay $x per year and the government never steps in. FDIC is a moral hazard in my opinion. The only thing the government should do is let people with low incomes claim their money back in advance so that they can pay their bills.
bodhibyte 2y ago
Both Wealthfront or Betterment are not banks but offer high-interest cash accounts that are FDIC insured. I've been curious what would happen if your money disappears from one of these high-interest cash accounts since they are technically not banks.
- bormaj 2y ago
  Reading through Betterment's disclosure acknowledges the scenarios for potential loss. While the deposits are stored through their program banks, you're guaranteed up to $2mm in FDIC insurance. So if those banks go under, your money is as safe as it would be anywhere else. What I did not know is that FDIC insurance doesn't apply while money is being _transferred_ between accounts (SIPC insurance apparently applies here).
- goldfishgold 2y ago
  Neither Wealthfront nor Betterment appear on the FDIC’s own list of insured institutions, so my guess is that if something wrong your money could disappear between the cracks, as in the example in the article. https://banks.data.fdic.gov/bankfind-suite/bankfind https://banks.data.fdic.gov/bankfind-suite/bankfind
  - snotrockets 2y ago
    There are very strong guarantees of that not to happen. Wealthfront and Betterment are tiny compared to others, but share the same field with the big players who have interest to not make people scared shitless. It is the fast and loose, innocent because proving guilt is an effort, fintech I am sacred of: crypto, binary options etc.
    - jrochkind1 2y ago
      What makes those different from the examples in the article?
    - bloppe 2y ago
      The whole point of Bitcoin was to not need banks. You can be responsible for your own money. You can use a secure hardware wallet (with backup seed in a secure vault) and not have to worry about FDIC insurance. But most people seem to prefer risking all their money with an unaccountable third party over these relatively easy security measures. So now we have uninsured crypto banks. I get how this happened but it's kinda sad.
m463 2y ago
People conflate legal tender/money/currency/stock/accounting unit/medium of exchange/digital token/etc...
heatherlaseur 2y ago
[flagged]
ljsprague 2y ago
I keep my money in a bank bank and ~30% of it has disappeared in the last few years!
- imtringued 2y ago
  Not it hasn't. It is still there and you decided to keep it there.
- genewitch 2y ago
  more than 50% since 2010 or 2012, iirc, but this only tells the official story. when a "99 cents!" bag of chips is now "$2.99 only!" and the price of fuel doesn't correlate to anything except oil company P&E charts... Just remember, The "$6 burger" was both making fun of the fact that restaurants charged $6 for a hamburger, as well as less than $6 for the entire meal (usually ~$4 al a carte). That food place ceased offering the $6 burger when the meal went over $8, and that was over a decade ago. I got quoted out $1000 for 200 feet of garden hose from a hose supplier last week. meanwhile the state government has only given ~6% pay increase in the last decade to civil employees. in the last 12 years i've reduced my electricity usage by 60% by both moving high power stuff to a cheaper facility and buying more energy efficient appliances and such. My electric bill is the exact same (plus or minus 10%) as it was 12 years ago. I could go on comparing what things used to cost to what they cost now (if you can even get them at all), and my spreadsheet says the "inflation" numbers we're given either are flat out lies or otherwise so misunderstand what people spend money on monthly that it may as well be a lie. Compare a 198X Ford Mustang 6 cylinder base model to any year model you please. Then convince me that moving from metal to plastic and computerizing everything so the wires can be much smaller somehow justifies the price hike, there. p.s. don't do this with rent or mortgages unless you want to cry.
  - HeyLaughingBoy 2y ago
    > $1000 for 200 feet of garden hose I know it's not really your point, but what kind of hose? I bought 100' of 3/4" "contractor" hose from Tractor Supply this last winter for $79. Even the in-ground stuff doesn't cost that much.
FateOfNations 2y ago
I was reading through the Synapse bankruptcy court filings, and oh jeez, is this a mess: > Synapse often used multiple Partner Banks to service different functions for the same Fintech Partner. In certain instances, end user deposits through a Fintech Partner were deposited in an account at one Partner Bank, while end user withdrawals through that same Fintech Partner were processed from a different account at a different Partner Bank. This business model makes it both essential and difficult to reconcile transactions and ensure end users receive access to the correct amount of funds due to each end user. https://www.courtlistener.com/docket/68458190/synapse-financial-technologies-inc https://www.courtlistener.com/docket/68458190/synapse-financ... This fintech product model, with multiple intermediaries and service providers between end users and the depository banks, is a house of cards. Is running your bank-like financial services product as an actual bank that hard? These technology companies seem to want all the upsides of being a bank, with none of the responsibilities. From my perspective, the big gap is that these depository banks aren't maintaining the customer and transaction data for the beneficial owners of the money they have on deposit. They seem like they should be the ones ultimately responsible for safeguarding the customer's funds. In the middle of this, the Federal Reserve dropped this gem about KYC non-compliance for one of the banks involved, swearing that it has nothing to do with the Synapse bankruptcy. https://www.federalreserve.gov/newsevents/pressreleases/enforcement20240614a.htm https://www.federalreserve.gov/newsevents/pressreleases/enfo...
Billywq 2y ago
[dead]

55 points by gnicholas 2y ago

james1120000 2y ago

I lost over 150k in an investment trading company ; i was down because the company refused to let me make withdrawals and kept asking for more money…. I was introduced to a recovery agent called Gavin ray and he’s being really helpful, he made a successful recovery of 95% of my investment, and I am really grateful to him. If you are a victim of binary scam and needs to get your money back, and If you have been scammed and unable to make withdrawal of your funds I hesitate you contact Gavin ray he can restore your hope of getting your money back, contact email gavinray78 @ gmail . com

Brianfm 2y ago

[dead]

Gullitthompson 2y ago

[dead]

dorisbobby4 2y ago

[dead]

Night_Thastus 2y ago

And it's gone!

southernplaces7 2y ago
Wonderful bit of cultural context.. https://www.youtube.com/watch?v=-DT7bX-B1Mg https://www.youtube.com/watch?v=-DT7bX-B1Mg

gumby 2y ago

I'm considering using Mercury,* which is allegedly quite popular with startups. They do have all the usual KYC etc of a bank. Like the ones discussed in the article, Mercury also keeps customer funds in Evolve, among other banks (I guess they claim to spread your money around so you don't have more thank 250K in any one basket). So if I understand correctly, the problem is that I have no visibility to the back end, so if Mercury keels over I'll have trouble getting my money? * I used SVB for 25 years, but over the past few years their service declined and First Republic poached a lot of their good guys, so I switched to FRB. With a track record like that, perhaps Mercury should reject me?

alephnerd 2y ago
Have you considered JPMC? FRB's tech portfolio and team is now part of them, and a number of SVB accounts ik of move there as well.
- gnicholas 2y ago
  Do they offer the sort of cash management that is Mercury's hallmark? Separately, I have heard a lot of bad things about Chase, and experienced some as well over the years. I'd be hesitant to open up an account there from a customer service perspective, although I assume the deposits would be safe at such a large mega-bank.
  - alephnerd 2y ago
    I can't speak for Chase. Most businesses ik are using JP Morgan Private Bank and Commercial Banking, and they should be able to use JPM Access
- gumby 2y ago
  JPMC bough First Republic and already I’m ready to leave. Fees are high and many, and there’s no direct relationship like there was with SVB or FRB. Just a call center.
  - alephnerd 2y ago
    Were you using FRB for private banking or commercial banking? Private/Relationship banking might be lackluster with JPM depending on your account size. Idk if I'd trust a non-FDIC insured bank and any bank that isn't Basel 1/2 compliant so most Neobanks seem too risky. They anyhow prefer to use state chartered banks which tend to be significantly more brittle than nationally chartered banks.
    - gumby 2y ago
      I had both. I switched my personal to the Sanford credit union (I don’t keep a lot of cash in my account anyway). I’m not sure what to do about my startup’s account though. Chase doesn’t seem to understand startups anyway — you’re a small business or a big business. For the company’s money I want someone who gives a shit.

jjwtieke 2y ago

http://archive.today/LWmgP http://archive.today/LWmgP

jellicle 2y ago

In a properly regulated world, all of these clowns would be shut down today and some of them would go to jail. Instead we do no regulation, these "not-banks lying and claiming your money is safe" get to harm a lot of people, and the public further loses trust in everyone involved. To anyone reading this who has money in any business that claims not to be a bank but instead your money is super-safely stored in a real bank somewhere and so there's no risk to you: run away, run away fast. Get your money out and close your account. You're in a Ponzi scheme and you don't realize it.

imtringued 2y ago
In a properly regulated world, everyone would have some sort of personal insurance for counterparty risk. You pay $x per year and the government never steps in. FDIC is a moral hazard in my opinion. The only thing the government should do is let people with low incomes claim their money back in advance so that they can pay their bills.

bodhibyte 2y ago

Both Wealthfront or Betterment are not banks but offer high-interest cash accounts that are FDIC insured. I've been curious what would happen if your money disappears from one of these high-interest cash accounts since they are technically not banks.

bormaj 2y ago
Reading through Betterment's disclosure acknowledges the scenarios for potential loss. While the deposits are stored through their program banks, you're guaranteed up to $2mm in FDIC insurance. So if those banks go under, your money is as safe as it would be anywhere else. What I did not know is that FDIC insurance doesn't apply while money is being _transferred_ between accounts (SIPC insurance apparently applies here).
goldfishgold 2y ago
Neither Wealthfront nor Betterment appear on the FDIC’s own list of insured institutions, so my guess is that if something wrong your money could disappear between the cracks, as in the example in the article. https://banks.data.fdic.gov/bankfind-suite/bankfind https://banks.data.fdic.gov/bankfind-suite/bankfind
- snotrockets 2y ago
  There are very strong guarantees of that not to happen. Wealthfront and Betterment are tiny compared to others, but share the same field with the big players who have interest to not make people scared shitless. It is the fast and loose, innocent because proving guilt is an effort, fintech I am sacred of: crypto, binary options etc.
  - jrochkind1 2y ago
    What makes those different from the examples in the article?
  - bloppe 2y ago
    The whole point of Bitcoin was to not need banks. You can be responsible for your own money. You can use a secure hardware wallet (with backup seed in a secure vault) and not have to worry about FDIC insurance. But most people seem to prefer risking all their money with an unaccountable third party over these relatively easy security measures. So now we have uninsured crypto banks. I get how this happened but it's kinda sad.

m463 2y ago

People conflate legal tender/money/currency/stock/accounting unit/medium of exchange/digital token/etc...

heatherlaseur 2y ago

[flagged]

ljsprague 2y ago

I keep my money in a bank bank and ~30% of it has disappeared in the last few years!

imtringued 2y ago
Not it hasn't. It is still there and you decided to keep it there.
genewitch 2y ago
more than 50% since 2010 or 2012, iirc, but this only tells the official story. when a "99 cents!" bag of chips is now "$2.99 only!" and the price of fuel doesn't correlate to anything except oil company P&E charts... Just remember, The "$6 burger" was both making fun of the fact that restaurants charged $6 for a hamburger, as well as less than $6 for the entire meal (usually ~$4 al a carte). That food place ceased offering the $6 burger when the meal went over $8, and that was over a decade ago. I got quoted out $1000 for 200 feet of garden hose from a hose supplier last week. meanwhile the state government has only given ~6% pay increase in the last decade to civil employees. in the last 12 years i've reduced my electricity usage by 60% by both moving high power stuff to a cheaper facility and buying more energy efficient appliances and such. My electric bill is the exact same (plus or minus 10%) as it was 12 years ago. I could go on comparing what things used to cost to what they cost now (if you can even get them at all), and my spreadsheet says the "inflation" numbers we're given either are flat out lies or otherwise so misunderstand what people spend money on monthly that it may as well be a lie. Compare a 198X Ford Mustang 6 cylinder base model to any year model you please. Then convince me that moving from metal to plastic and computerizing everything so the wires can be much smaller somehow justifies the price hike, there. p.s. don't do this with rent or mortgages unless you want to cry.
- HeyLaughingBoy 2y ago
  > $1000 for 200 feet of garden hose I know it's not really your point, but what kind of hose? I bought 100' of 3/4" "contractor" hose from Tractor Supply this last winter for $79. Even the in-ground stuff doesn't cost that much.

FateOfNations 2y ago

I was reading through the Synapse bankruptcy court filings, and oh jeez, is this a mess: > Synapse often used multiple Partner Banks to service different functions for the same Fintech Partner. In certain instances, end user deposits through a Fintech Partner were deposited in an account at one Partner Bank, while end user withdrawals through that same Fintech Partner were processed from a different account at a different Partner Bank. This business model makes it both essential and difficult to reconcile transactions and ensure end users receive access to the correct amount of funds due to each end user. https://www.courtlistener.com/docket/68458190/synapse-financial-technologies-inc https://www.courtlistener.com/docket/68458190/synapse-financ... This fintech product model, with multiple intermediaries and service providers between end users and the depository banks, is a house of cards. Is running your bank-like financial services product as an actual bank that hard? These technology companies seem to want all the upsides of being a bank, with none of the responsibilities. From my perspective, the big gap is that these depository banks aren't maintaining the customer and transaction data for the beneficial owners of the money they have on deposit. They seem like they should be the ones ultimately responsible for safeguarding the customer's funds. In the middle of this, the Federal Reserve dropped this gem about KYC non-compliance for one of the banks involved, swearing that it has nothing to do with the Synapse bankruptcy. https://www.federalreserve.gov/newsevents/pressreleases/enforcement20240614a.htm https://www.federalreserve.gov/newsevents/pressreleases/enfo...

Billywq 2y ago

[dead]