A Banking App Has Been Suddenly Closing Accounts, Sometimes Not Returning Customers' Money (propublica.org) 66
Chime, a "neobank" serving millions, is racking up complaints from users who can't access their cash. The company says it's cracking down on an "extraordinary surge" in fraudulent deposits. That's little consolation to customers caught in the fray. ProPublica: Chime, which provides app-based banking services to an estimated 12 million customers, has according to experts been generating a high rate of complaints, with 920 filed at the Consumer Financial Protection Bureau since April 15, 2020. "For a company that most people have never heard of, I think that's a lot of complaints," said Lauren Saunders of the National Consumer Law Center. Many customers have told the CFPB that they can't access their money or accounts, and that, among other things, Chime is slow to resolve problems. Of the 920 complaints filed about Chime, 197 were tagged as involving a "closed account." The CFPB's complaints are labeled inconsistently, and many of the other 723 also detail problems involving accounts that were closed against customers' will.
By comparison, Wells Fargo, a bank with six times as many customers and a lengthy recent history of misbehavior in its consumer bank, has 317 CFPB complaints tagged for closed accounts over the same time period. Marcus, the new online bank created by Goldman Sachs, with 4 million customers, has generated seven such complaints. Customers have also filed 4,439 complaints against Chime at the Better Business Bureau, compared to 3,281 for Wells Fargo. Meanwhile, several Facebook groups have sprung up with names like "Chime Bank has FAILED" and "Chime Thieves." They've attracted some 700 members combined. One group has more than 100 posts and comments, almost all of them saying some version of the same thing. "Chime stole my entire unemployment backpay," reads one typical post. Another says, "I'm a single mom of 4 kids and they stolen $1400 from me and refuse to give it back and now we are about to be evicted." Chime doesn't look much better on Google, where, according to the site's "People Also Ask" feature, two of the questions most often posed about Chime are "Is Chime bank a real bank?" and, at various points in recent weeks, "Is Chime a ripoff?" or "Does Chime steal your money?"
By comparison, Wells Fargo, a bank with six times as many customers and a lengthy recent history of misbehavior in its consumer bank, has 317 CFPB complaints tagged for closed accounts over the same time period. Marcus, the new online bank created by Goldman Sachs, with 4 million customers, has generated seven such complaints. Customers have also filed 4,439 complaints against Chime at the Better Business Bureau, compared to 3,281 for Wells Fargo. Meanwhile, several Facebook groups have sprung up with names like "Chime Bank has FAILED" and "Chime Thieves." They've attracted some 700 members combined. One group has more than 100 posts and comments, almost all of them saying some version of the same thing. "Chime stole my entire unemployment backpay," reads one typical post. Another says, "I'm a single mom of 4 kids and they stolen $1400 from me and refuse to give it back and now we are about to be evicted." Chime doesn't look much better on Google, where, according to the site's "People Also Ask" feature, two of the questions most often posed about Chime are "Is Chime bank a real bank?" and, at various points in recent weeks, "Is Chime a ripoff?" or "Does Chime steal your money?"
Aaaand it's gone (Score:5, Interesting)
I'm kinda flabbergasted reading stuff like that. I mean, how easy is it in the US to open up a bank, is there really no oversight whatsoever?
Why people in the US still put any faith in their banks is absolutely beyond me.
Re: Aaaand it's gone (Score:4, Funny)
Re: Aaaand it's gone (Score:4, Insightful)
Unfortunately, the "break things" mentality has moved from "production" to things like "the economy", "democracy", and "society".
Maybe Chime's customers can get reimbursed in Dogecoin after the class action.
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The "break things" mentality has been a foundational principle from America's earliest days to things like "the economy", "democracy", and "society".
FTFY
Here's a quote from Federalist #85 [gutenberg.org] in which Alexander Hamilton is responding to critics. To put summarize it in modern terms, he's arguing that we "don't let perfect be the enemy of good" and that we "move fast and break things", and he's doing so with regards to the US Constitution, which has obviously been rather pivotal in shaping our economy, democracy, and society (emphasis mine):
Concessions on the part of the friends of the plan, that it has not a claim to absolute perfection, have afforded matter of no small triumph to its enemies. "Why," say they, "should we adopt an imperfect thing? Why not amend it and make it perfect before it is irrevocably established?" This may be plausible enough, but it is only plausible. In the first place I remark, that the extent of these concessions has been greatly exaggerated. They have been stated as amounting to an admission that the plan is radically defective, and that without material alterations the rights and the interests of the community cannot be safely confided to it. This, as far as I have understood the meaning of those who make the concessions, is an entire perversion of their sense. No advocate of the measure can be found, who will not declare as his sentiment, that the system, though it may not be perfect in every part, is, upon the whole, a good one; is the best that the present views and circumstances of the country will permit; and is such an one as promises every species of security which a reasonable people can desire.
I answer in the next place, that I should esteem it the extreme of imprudence to prolong the precarious state of our national affairs, and to expose the Union to the jeopardy of successive experiments, in the chimerical pursuit of a perfect plan. I never expect to see a perfect work from imperfect man. The result of the deliberations of all collective bodies must necessarily be a compound, as well of the errors and prejudices, as of the good sense and wisdom, of the individuals of whom they are composed. The compacts which are to embrace thirteen distinct States in a common bond of amity and union, must as necessarily be a compromise of as many dissimilar interests and inclinations. How can perfection spring from such materials?
Mind you, I'm explicitly not suggesting Chime is a good bank or that they are fulfilling their promises in the sort of
Is Chime bank a real bank? (Score:3)
...two of the questions most often posed about Chime are "Is Chime bank a real bank?"...
A good question to ask before opening an account.
Afterwards, well, wanna buy a bridge?
Re:Aaaand it's gone (Score:5, Insightful)
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"Chime is a financial technology company, not a bank." So they skirted bank law by being a technology company instead.
If they are not a bank, then how is it that they are receiving and holding deposits, unless they actually are a bank or have opened an account in your name at another bank? You need an ABA Routing number for that,
and Only banks can get those....
Re:Aaaand it's gone (Score:5, Insightful)
"Chime is a financial technology company, not a bank." So they skirted bank law by being a technology company instead.
If they are not a bank, then how is it that they are receiving and holding deposits, unless they actually are a bank or have opened an account in your name at another bank? You need an ABA Routing number for that,
and Only banks can get those....
Paypal is not a bank and they hold people's cash and refuse to give it back at times.
Re: Aaaand it's gone (Score:2)
Re:Aaaand it's gone (Score:5, Informative)
"Chime is a financial technology company, not a bank." So they skirted bank law by being a technology company instead.
If they are not a bank, then how is it that they are receiving and holding deposits, unless they actually are a bank or have opened an account in your name at another bank? You need an ABA Routing number for that,
and Only banks can get those....
They partner with a small bank.
For instance, Apple Cash let's you send, receive, and store money in the Wallet app. But Apple is not a bank.
Apple skirts the bank charter requirement by partnering with Green Dot Bank.
https://support.apple.com/en-us/HT210701
Person to person payments and the Apple Cash account are services provided by Apple’s partner bank, Green Dot Bank.
More info if you care to read up about it: Small banks you’ve never heard of are quietly enabling the tech takeover of the financial industry [cnbc.com]
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THIS is the kind of shit that has made me dump banks for my financial life and use credit unions for the last 30+ years. Banks SUCK!
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Sure, and the only thing that sucks more than banks, are credit unions.
https://en.wikipedia.org/wiki/... [wikipedia.org]
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Re: Aaaand it's gone (Score:2)
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"Chime is a financial technology company, not a bank." So they skirted bank law by being a technology company instead.
If they are not a bank, then how is it that they are receiving and holding deposits, unless they actually are a bank or have opened an account in your name at another bank? You need an ABA Routing number for that, and Only banks can get those....
According to Investopedia [investopedia.com]:
To qualify for an ABA transit number, a financial institution must be eligible to hold an account at a Federal Reserve bank.
Which technically could be an entity that doesn't offer traditional consumer banking services. In the case of Chime, however, they partner with a bank to provide banking services.
Chime says: “Chime is a financial technology company, not a bank. Banking services provided by, and debit card issued by, The Bancorp Bank or Stride Bank, N.A.; Members FDIC.”
Other financial companies, like Fidelity and Vanguard, do this too to provide banking services like checks and credit cards, etc...
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Other financial companies, like Fidelity and Vanguard, do this too
Wait: Which protection rule are you saying they avoid? Because ultimately the funds kept as dollars only end up in accounts that should be still subject to banking regulations.
If anything, Fidelity and Vanguard would be subject to even greater restrictions, since they're brokerages who take custody of customer assets -- E.G. the SEC customer protection rules requiring segregation of assets from their firm's working capital.. Ban
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Other financial companies, like Fidelity and Vanguard, do this too ...
Wait: Which protection rule are you saying they avoid?
Sorry for any confusion. I was just saying that they offer banking-like services, while not being banks themselves. They partner with actual banks, like Chime does, for those services.
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Just like Uber and Lyft are cab companies but claim they're technology companies. Or how AirBnB is a hotel service.
At this point businesses can claim to be whatever they want so it's buyer beware. As this case illustrates.
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I bank at a bank, with a physical location that I visit in person and the tellers know me by sight. I highly recommend it.
I don't visit my/any branch often enough for them to recognize me on sight, but at least I can physically hand someone my ID and we can then get down to business... Some brick and mortar companies still have value.
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Re: Aaaand it's gone (Score:4, Insightful)
Re: Aaaand it's gone (Score:2)
Re: Aaaand it's gone (Score:1)
That and to avoid money laundering.
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Re:Aaaand it's gone (Score:5, Insightful)
I'm kinda flabbergasted reading stuff like that. I mean, how easy is it in the US to open up a bank, is there really no oversight whatsoever?
Chime is not a bank. To some degree it's more akin to a guy on a street corner who offers to take your money to (and retrieve your money from) the bank for you. From TFA:
"For all of Chime’s Silicon Valley tech patina, one thing it’s not is an actual bank. Like others in its category, Chime is a digital interface that hands over the actual banking to, in this instance, two regional institutions, The Bancorp Bank and Stride Bank. Chime customers interact with the Chime app, but Bancorp and Stride, both of which are FDIC-insured, hold their money."
The FDIC insures money that people put in US banks - if the bank goes under, the FDIC basically guarantees you'll still get your money (up to $250,000 per person per account). So, assuming Chime actually put the funds in the bank, the money here isn't actually lost... but because Chime has inserted itself as a middle-man, it might still take a while to get at it.
I realize it goes against the Slashdot zeitgeist, but in this case it might be useful to read the article before opining.
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Banks are pretty highly regulated in the US. This company seems to have flown under the radar by claiming to not be a bank. I'm sure at this points lawsuits will be filed, they'll likely be declared to indeed be a bank afterall, and corrective measures will be taken.
Remember that laws and regulations doesn't mean that everyone always obeys them - just that there is some form of punishment defined if you don't.
Re: Aaaand it's gone (Score:4, Interesting)
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It's possible since financial service deregulation in the US that it's possible to open something that looks to a consumer an awful lot like a bank. They walk like a duck, quack like a duck, but aren't regulated like a duck. We can see from the summary that traditional banks -- even really *bad* traditional banks -- seem a lot more reliable.
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I'm kinda flabbergasted reading stuff like that. I mean, how easy is it in the US to open up a bank, is there really no oversight whatsoever?
Why people in the US still put any faith in their banks is absolutely beyond me.
Where did you read that Chime is a bank, or that they have no oversight??
Banking regulations are most likely the reason they're closing accounts.
Good grief my eyes are hurting from all the eye rolling I'm doing on this page. Nobody knows anything about the banking industry but everyone has an opinion about banks, of course. An unscrupulous bank would just take, and that's the wrong word for when they already have your money, they just have your money already... and they would do unscrupulous things with i
No shit eh? (Score:2)
Banksters are crooks - who knew? Admittedly, this story details behaviour a bit more brazen than those parasites are usually caught perpetrating. Then again, PayPal is arguably a bank also, and they have a hugely bad rep for arbitrarily stealing their customers' money.
Banks - can't live without'em, can't drive a stake through their cold black hearts. Oh, wait - hearts? WTF was I thinking?
Re:No shit eh? (Score:5, Insightful)
Nice little rant, but, per their own page, Chime is not a bank. "Chime is a financial technology company, not a bank. Banking services and spending account provided by The Bancorp Bank or Stride Bank N.A.; Members FDIC. Credit Builder card issued by Stride Bank N.A.".
Chime is a 'bank' in the same way Uber is not a taxi company. It is a tech company pretending to be something else so it can skirt laws. But it has an APP, so it must be good.
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Nice little rant, but, per their own page, Chime is not a bank. "Chime is a financial technology company, not a bank. Banking services and spending account provided by The Bancorp Bank or Stride Bank N.A.; Members FDIC. Credit Builder card issued by Stride Bank N.A.".
Chime is a 'bank' in the same way Uber is not a taxi company. It is a tech company pretending to be something else so it can skirt laws. But it has an APP, so it must be good.
That's not a great analogy, Uber doesn't have any relationship at all with the taxi industry, and tried to entirely skirt local taxi regulations.
Fintech companies that are not banks themselves have formal partnerships with banks or they wouldn't be able to do much of anything. They also have to be licensed money transmitters in every*(plus or minus a few, google it?) state they operate. They sure can't ignore KYC and AML laws, for example. ... and that's probably why Chime is closing accounts. If I had t
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Banks - can't live without'em, can't drive a stake through their cold black hearts
You damn sure CAN live withOUT banks.. I've been doing it for 30+ years. It's called a credit union. My current credit union
has as its motto "The bank that YOU own".. Which means once a year each member gets a dividend, the amount based on how much deposits/loans the member has. I generally get ~$100/yr with this dividend. Plus if you have a problem, your problem is treated FAR better than any bank does. A few years ago my wife got her debit skimmed. We discovered the several large debits that we didn't ma
Re: No shit eh? (Score:2)
Regulations are good (Score:2)
I'm not trying to be flippant or anything because this has real impacts on real people at a time when things are already bad enough out there, but this is a prime example of why regulations exist and why they are a good thing. This is why I refuse to use PayPal or Venmo because if you read the ToS, they can basically close your account, steal your money, and they don't even owe you so much as an apology.
Wells Fargo or US Bank pulls shit like this you have a number of legal options at your disposal, but with
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I think this is less a case of a thieves and more a case of a startup trying to simplify banking and getting burned by all those things the complicated stuff was made to prevent.
Sometime Legacy is better. (Score:4, Insightful)
Or... less suck than the newer option?
I don't like Citi, I don't like Wells, and Chase is also in that pile of ashes... but.. really? What's my alternatives? Ammo cans in the backyard, stuffed with cash? Some fly-by-night like these Chime crooks?
I'll go with the Legacy when it comes to banks and airlines, thank you very much. Pay a bit more, get better service.
Truth be told credit unions is where it's at. I'm heavily pondering going back to that, now that I don't move state every x years like when I was in the usaf. Don't need a central monolith bank anymore.
But... I don't need whatever Chime's doing, either.
Re:Sometime Legacy is better. (Score:4, Insightful)
I don't like Citi, I don't like Wells, and Chase is also in that pile of ashes... but.. really? What's my alternatives?
Small local banks. You can still find them, and they're usually a much better deal even if they lack the bells and whistles of the big names.
Mine is a small bank that exists in two counties near Fort Worth, TX. I can use almost any ATM, or get cash for free at the grocery store. The one or two times a year I need to go to the lobby, it sucks - a 35-min. drive each way - but I have fee-free checking and savings, and an additional free checking account that I use for my eBay/PayPal activity so I can record it separately for taxes (and keep my full-time paycheck safe).
The one time that things got twisted and a deposit didn't hit in time, I got a phone call (!) from the branch manager asking me if I'd like to move money from savings to avoid an overdraft fee.
Small banks for the win.
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They're free, and give you a free MasterCard debit card, and free ATMs all over (use their app to locate compatible ones, like at all CVS for example). The only fees are if I over
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Small local banks are great if you don't go anywhere. Lose your debit card a thousand miles away and you are pretty much screwed if you depend on it for money. Been there and done that. That is why bank with a national bank. I can get off a plane any where in the US and there is a branch with in walking distance.
Re: Sometime Legacy is better. (Score:2)
Also good to open an account with an international bank before travelling. Especially in the developing world where it can be difficult to get money out of an American bank.
I wish I opened a Barclay's account before I went to Africa. Would have simplified a lot.
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Small local banks are great if you don't go anywhere. Lose your debit card a thousand miles away and you are pretty much screwed if you depend on it for money.
Or, you can travel with a credit card and avoid that scenario altogether ... or, be extra smart and don't use a debit card, ever.
I stopped using a debit card for transactions after my first near-financial-ruin experience with, I'm assuming, a card skimmer at some gas station. Someone tried to use my card information in North Carolina at a Walmart, I assume with a cloned card. I was lucky and got my money back.
Using a debit card attached to the account where the money you need to survive gets deposited is
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I've tried 2 credit unions since leaving HSBC (I had to come in during bankers' hours in order for them to honor their promise to cover fees if they failed to send a Bill Pay check on time). Both of them pushed "Overdraft Protection" (a product so bad the government made it opt-in) h
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I really don't know why people think credit unions and banks, who will try to nickel and dime you with fees and policies, are any good. I don't pay Fidelity a cent and the features they have are like the features banks used to have when Free Checking was a thing.
In this case, it's because my bank *is* good. :-) ... I've never paid a dime for my banking with a small, local bank in Texas and it provides everything you mentioned. And, I get to keep more money within the local economy.
I'm glad Fidelity works for you, but it's not the only answer.
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I've been very happy with my small, local credit union since 2008. I joined them because I saw what the banking industry was doing with the housing market. (among other things)
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Credit unions are the best. Followed by local/regional banks.
I use a credit union. They don't have branches. But my interest rates are near zero. Both the good and bad interest rates, which I'm fine with. I do get a dividend for keeping my money there. They have pretty decent services and I've n
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Many (most?) credit unions are part of the Credit Union Service Center National Network. If yours is part of that, you have access to over 5000 'branches' nationwide. You can use any of those branches for deposits, withdrawals, loan payments, transfers, get official checks, etc. Very convenient.
Re: Sometime Legacy is better. (Score:2)
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DCU. Digital Credit Union. :)
Originally the Credit Union for the employees of Digital Equipment Corporation - now you also can have your bank account hosted on their VAX-es
They have a VERY NICE Savings rate on the 1st $1000.
Also you can opt-it to get a dividend on the money on your checking account.
And if you plan to buy/refinance an EV, their loan rate will be 0.25% less than the current advertised one.
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I don't like Citi, I don't like Wells, and Chase is also in that pile of ashes... but.. really? What's my alternatives? Ammo cans in the backyard, stuffed with cash? Some fly-by-night like these Chime crooks?
Simple answer to your problem: Credit Unions... FAR FAR better than ANY bank
I blame the customers (Score:3)
Hear me out. Chimes number of complains does not seem -that- far out of line when compared with Wells Fargo. Its clearly a larger fraction of their clients, but consider who their clients are!
This is company who's main ad pitch is their app will tell you if you have money to spend on a coffee or not and if your 'balance is getting low'.
I am sorry but fuck if you're over 16 and your current account balance is a factor in your decision about a beverage purchase, let me just say you are deeply stupid! No I am not saying you're stupid because you may not have a lot of money. You're stupid because how much money you presently have (unless you're retired) should not be a driver in the decision process regarding minor discretionary expenses. You should be thinking about "cash-flow" and opportunity cost!
Chime is literally catering to the most financially illiterate, irresponsible, generally uninformed bozos out there. I have little doubt that group is often taken in by all sorts of other frauds, and picks passwords like Summer2021 for their online banking. I am sure Chime has to freeze and close all sorts of accounts a result.
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So by your logic (which I think is flawed, but still), it's ok to take advantage of the population as long as they are not well informed or intelligent? You do realize that's pretty much the opposite of what regulations are designed for right?
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So by your logic (which I think is flawed, but still), it's ok to take advantage of the population as long as they are not well informed or intelligent?
It does appear The System has been set up for this for many centuries, and in many countries.. if not all. The People, the Hoi Polloi, the rabble, whatever word you use for The Great Masses, exist solely to give money to merchants and in return obtain.. something. A thing, a service. Invent the need, advertise the need, fill the need, profit!
This also applies to education and politics. Tell a lie often enough and it becomes truth. Do it for 20 years, and you get 1930's Japan and Germany. And 2020's
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You're reading things into it I did not say!
Its not okay to take advantage of people. However just because they have a lot of complaints does not mean those complaints are legitmate.
Joe Bob gets his account frozen so he files a complaint. Well it turns out Joe Bob has been sending money to some 419ers hopeful they'll make him rich, who also happen to be an watch list. - Joe Bob's account gets frozen and rightly so - know your customer laws required it. Chime's backing bank has to investigate Joe Bob and ma
i would NEVER use a bank (Score:5, Insightful)
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Indeed. Pure online banks have not only been a problem in the US.
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Re: i would NEVER use a bank (Score:2)
I won't use a bank with a physical presence. It weeds out banks that have shitty online experiences. For example, banks that don't offer two factor auth seem to all have a big physical presence. No thanks.
Looks like they try to emulate Cryptocurrencies (Score:2)
There it seems standard procedure that your (fake) money is suddenly gone if you store it with an "exchange" (i.e. a fake bank).
PPP fraud crackdown (Score:2)
Hmm...this reads like "we've been p0wned" (Score:2)
One possibly not explored is that someone realized that Chime handles money and decided to target them. They may have been hacked and those closed accounts are actual money that has disappeared into another account and removed. Chime might be trying to save face over a much larger loss that could cost them all of their accounts.
Just a theory but it kind of adds up. Either that or these are a bunch of scumbags who steal money and ruin the livelihoods of average people. If so, toss their butts in prison u
Do they offer FDIC insurance? (Score:2)