Chime blocked customer’s money for months during pandemic

Illustration from article titled Chime's Banking App Locked Customer Money For Months During Pandemic

Graphic: Carillon

Chime is a highly praised banking app for forgive overdraft policies and easy payment options. But behind the scenes, it was also racking up hundreds of complaints from customers that the company had kicked them out of their bank accounts, sometimes for months.

The problem was first reported by ProPublica in a survey that explored the 920 complaints Chime customers have deposited with the Consumer Financial Protection Bureau (or CFPB, for short) since mid-April 2020. For the most part, these complaints relate to what banks call “forced account closings” – the term given when banks suddenly close the account of a person and block it. their money in the process. Just for comparison, ProPublica points out that Wells Fargo, a bank forged with its own poor reputation, received only 317 complaints during that same period, according to records kept in the CFPB Complaints Database.

The report points out that most of these CFPB reports were closed “with explanation”, a designation that the Bureau put aside in cases where Chime resolves the dispute privately with the customer in question. According to the company, the majority of the complaints it has received are due to its attempts to crack down on bad actors who try to defraud their entry into the business. federal stimulus funds or ill-gotten unemployment insurance.

Chime did not immediately respond to Gizmodo’s request for comment but Chime spokesperson Gabe Madway in a public declaration: “The past year has seen an extraordinary increase in the activity of those seeking to illegally obtain government funds related to the pandemic and defraud American taxpayers. By some credible estimates, $ 400 billion in unemployment fraud alone could have transpired.(The $ 400 billion estimate Madway was referring to was linked to a incorrectly sourced Axios article who had been demystified previously).

“We are proud of Chime’s robust anti-fraud efforts, which have raised hundreds of millions of dollars to state and federal agencies during the pandemic,” Madway continued. “While it is important for us to fight fraud, our primary focus will always be taking care of our members. And despite our best efforts, we make mistakes.

The “mistakes were made” line probably won’t be much of a comfort for the countless customers that ended up with their accounts locked and their cash sitting in Chime’s systems. A handful of these customers—most of whom had thousands of dollars sitting in their accounts when they were suddenly closed—spoke with ProPublica for the piece. All noted that the company sent them the same cryptic email: “Following a recent review of your Spending Account, we regret to inform you that we have made the decision to end our relationship with you at this time.” These same customers were reportedly told that a check for their remaining balance would be mailed “within 30 days,” and they should be on the lookout for it. But one of these customers described spending “more than two months” emailing back and forth with the company just to get access to the money in her account.

In some cases, Chime holds onto that money permanently. ProPublica’s report points out that Facebook groups have sprung up under names like “Chime Thieves,” or “Chime Bank has FAILED,” all featuring posts describing how the company holds onto people’s accounts and refuses to release their funds. Meanwhile, complaints on Chime Better Business Bureau page disposition similar stories.

“I have a bank account, it was suspended due to deposits on February 17, 2021. I sent all the documents that I was asked to do but 4 months later I still have no answer or in a clear way to work and talk with them, “reads a message. Another describes how a customer froze his account for $ 6,000, but when Chime sent the check he had promised, it was only $ 130.

“Chime stole my tax refund and I won’t let it go until it’s returned,” they wrote. “Nothing in your agreement tells me what I’m missing and sending an email to chime gets me an automatic response saying your account is closed.” It’s a joke. ”

The worst part is that these customers will probably never understand Why their accounts were closed, to begin with. In its emails to customers, the company said it could not disclose this information for “security reasons” and then asked users to the agreement that Chime customers sign when they open an account with the company.

“Chime and / or the Bank may suspend, freeze or close your account for any reason with or without notice,” it read. “If our expense account monitoring detects [nefarious] activity, the funds in the Account will be subject to suspension pending review of the activity by the Bank and / or Chime. And sometimes this “review” process takes months of trying to get your money back from the institution that’s supposed to pay.

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