Robinhood Users Filed Thousands of Complaints with US Consumer Agency (gizmodo.com) 45
17 million people trade stocks and cryptocurrency on the Robinhood app. Now Gizmodo has obtained copies of hundreds of complaints filed about the app between mid-2020 until and-2021 with America's consumer protection agency, the FTC:
The inability to withdraw money from Robinhood accounts for extended periods of time was a common complaint from consumers. There were also people who said they were hacked and then became frustrated that Robinhood was unresponsive when they tried to resolve the issue. Some users who say they were hacked even claimed they lost thousands of dollars when they couldn't reach Robinhood about the issue...
The FTC found 3,081 complaints, but only released 200 of those to Gizmodo under its obligations to comply with the Freedom of Information Act law... But we're publishing a small sample of the complaints in an effort to highlight patterns that point to larger problems, just as we have with other companies like Binance, Tinder, Venmo, Rent-A-Center, AirBNB, and Honest Company, to name a few.
One of the most common complaints about Robinhood was an inability to reach someone with the company's customer service team. Robinhood only introduced phone support in October of 2021, so it was common for people with complaints to be unable to reach anyone, according to the FTC documents we obtained. Robinhood is aware of the issue, the company told Gizmodo, and has worked to ameliorate it with a 24/7 hotline.... "Since 2020, when some of these complaints were filed, we've invested heavily in phone support, systems stability, and security processes. We're committed to supporting our customers and offering a safe experience, and we're confident that the steps we've taken over the past two years put us in a strong position to serve our growing customer base."
Another recurring complaint involves people being unable to sell a given stock while its value tanked on the market. This issue, as you can imagine, is troubling because it prevents people from minimizing their losses.
The FTC found 3,081 complaints, but only released 200 of those to Gizmodo under its obligations to comply with the Freedom of Information Act law... But we're publishing a small sample of the complaints in an effort to highlight patterns that point to larger problems, just as we have with other companies like Binance, Tinder, Venmo, Rent-A-Center, AirBNB, and Honest Company, to name a few.
One of the most common complaints about Robinhood was an inability to reach someone with the company's customer service team. Robinhood only introduced phone support in October of 2021, so it was common for people with complaints to be unable to reach anyone, according to the FTC documents we obtained. Robinhood is aware of the issue, the company told Gizmodo, and has worked to ameliorate it with a 24/7 hotline.... "Since 2020, when some of these complaints were filed, we've invested heavily in phone support, systems stability, and security processes. We're committed to supporting our customers and offering a safe experience, and we're confident that the steps we've taken over the past two years put us in a strong position to serve our growing customer base."
Another recurring complaint involves people being unable to sell a given stock while its value tanked on the market. This issue, as you can imagine, is troubling because it prevents people from minimizing their losses.
Steal from the rich and give to the poor (Score:3, Funny)
Re:Steal from the rich and give to the poor (Score:4, Insightful)
Re:Steal from the rich and give to the poor (Score:5, Insightful)
Except now, in true Orwellian fashion, the American Dream is anti-American.
"Woe unto them that call evil good, and good evil; that put darkness for light, and light for darkness; that put bitter for sweet, and sweet for bitter!" --Isaiah 5:20
Re: (Score:1)
yeap, all these means RED DANGER! #ColdWarFeelingsAllOverAgain
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Why are those the only two options?
we make more money when we slow down sales (Score:2)
we make more money when we slow down sales of stock.
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Do they?
As a broker, don't you make more commissions the faster (and thus the more often) a trade happens?
It's not the broker buying the stocks back. And of course it's harder (even for a good and honest broker) to find a buyer for something that's value is just going down.
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IIRC they sell their customer's transaction data to HFT companies or something.
Anyway. Obviously the 0 fee model is their big appeal, but frankly I wouldn't want to trust a ton of my money to some "move fast and break things" type of broker. I just make regular purchases of index ETFs so I'd rather pay a bit of fees on that and not worry about the broker fucking me over. On the other hand if you're trading meme stocks, it might be an ok option.
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Yes. But that's why I thought more transactions is more money for them. Wouldn't make sense to delay anything.
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More transactions is more money. But Robinhood is not a market maker themselves. They have to rely (and in fact, make a lot of their money) by routing their orders to orders to other market makers who are then supposed to fill the order in a "timely" manner. It works fine when the markets are moving slowly but breaks down especially when the markets are tanking. That's not Robinhood's fault but their inherent process makes it a bit worse.
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> It's not the broker buying the stocks back.
In many cases it is. And by SEC rules it's supposed to be during these during those "unable to sell a given stock while its value tanked on the market" times. Market makers are notorious for stepping away during sharp declines and crashes. That's why it's so tough to get those orders filled.
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Their parent company is a hedge fund manager. They don't want the stock prices to tank further before they get their own shares sold. They are probably leaving a chance to get themselves out and slow down the crash until their exit is finished.
Re: we make more money when we slow down sales (Score:2)
How does RH increase profits by executing more zero-fee transactions? Each transaction incurs a cost/expense, small though it may be, and by not charging customers a fee greater than that cost, they don't profit off transactions... Now they could (and likely do) profit off the spread on the trades, but that's a different thing in my opinion.
Naming it so doesn't make it so. (Score:2)
Honest Company
I don't know anything about Jessica Albas' company, but the name isn't good. "Honest Company" and "Totally Not Dishonest Company" mean the same thing. Would you really do business with the latter?
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See also "Better"
So much whining (Score:2)
If someone has locked down your account then you sue, dont waste your time filing complaints with the BBB or posting negative reviews. Both are completely worthless
When did RH customer found out they are the produc (Score:5, Interesting)
Re:When did RH customer found out they are the pro (Score:4, Interesting)
"RH customers later would find out that RH was trading against their customers by selling order flow and taking counterparty trades of the newbie's option position and slowing the execution of customer trades when it suited RH."
Selling order flow ("PFOF" -- Payment For Order Flow") is typical. I think the only people who pay for custom order flow are individuals and organizations with enormous quantities of money on the line -- not anybody trading in less than a million dollars per trade.
Now I would like you to back up your claim that Robinhood is taking counter-party trades on the newbie's option positions, and slowing the execution of customer trades, when it suits Robin Hood. First, that's quite an accusation. Second, it's absurd: The sizes of the trades that newbie's are taking is quite small, and further, on a relatively long time span: nobody is relying on algorithmic trading on Robinhood. What exactly is Robinhood going to do, so that they are going to take advantage of the trade?
For example, let's say someone writes 10 CALL contracts on SPY. What's Robinhood going to do to take advantage of this trade? What does "Robinhood opening a counterparty trade" look like here? Let's say that Robinhood can take advantage of -- and we'll be generous -- 500 milliseconds on that limit order. How does the nefariousness work? How does Robinhood take advantage of that?
Robinhood trades execute pretty quickly -- I've never seen orders filled in less than a second if the limit matches the bid or the ask, and nobody is performing algorithmic trading on Robinhood.
Re: When did RH customer found out they are the pr (Score:2)
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This is the first real correct use of that phrase as well. We often see it applied to Facebook in a braindead way which refuses to recognise that a consumer can be both a product and a customer at the same time, however that isn't at all the case with RH. The whole premise of RH is that it allows customers to trade, but then before placing the trades they tell their buddies on Wallstreets about it allowing them to get ahead of the trades and skim off the top, that's if they make the trade at all (see the co
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Nonsense, no evidence of either RobinHood or Gamestock execs doing any such thing has been found and it's a year later. Of course it fell from 300 plus peak of Jan 2021 right away, expected as overvalued, but has been north of $100 since. Pretty good for stock that was a few bucks before August 2020.
Some hedge funds are being investigated about that and other meme stocks.
But bottom line is you sound like a butthurt loser of gamestock volatile hype spike. Be more nimble next time.
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I didn't even buy any, I'm just calling it as I see it, and the inappropriate downmod of my parent comment is all the proof I really needed that I'm right. I see patterns these people aren't smart enough to hide.
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Hard proof from the investigations would be proof, but there have been none after more than a year. Downvotes aren't proof of anything, maybe you were downvoted for writing nonsense.
Redditors stomped the shorting hedge fund managers who were doing a bad thing, that's the obvious thing to believe. The price spiked on hype, then stabilized at north of $100, good for gamestock.
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You don't know shit about squat bud. Stop acting like you understand what's going on. The fat lady hasn't sung yet, this shit isn't even close to over.
And no, I don't own any of either stock. I am just more informed than you.
See, you still think the system is basically fair. That the SEC is anything more than a bunch of industry insiders, taking their cut in "fines" that are less than 1% of profits.
You are wrong. Our stock market is absolutely and totally corrupt. The government does nothing because the pol
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If system is corrupt then why are there ongoing investigations into the hedge funds? That's what informed people know. You don't make sense, reality isn't following your made up narrative, you have nothing but made up bullshit and no proof or reason for your beliefs.
The two parties you mentioned were not found to have any problems. Informed people know this too.
Re: Blatant market manipulation. (Score:2)
illegally colluded to tank GameStop stock
Got any evidence, or are you just baselessly accusing people of crimes?
Why does Robinhood exist? (Score:5, Insightful)
Still don't really get the appeal of Robinhood in a world where places like Fidelity (and Vanguard) exist. They both offer $0 account minimums and $0 fees (on most things), but that's where things diverge and Robinhood falls short on most things.
From Investopedia, Fidelity Investments vs. Robinhood [investopedia.com]: (pretty thorough comparison, the "Security" section is interesting)
Our Verdict [at end]
The competition between Robinhood and Fidelity is not close. Fidelity is one of the more well-rounded brokerage firms out there, and it can be a good fit for retail investors and traders of all experience levels. Buy-and-hold investors will likely find all the tools they need within the web platform while more active investors and traders can use Active Trader Pro, which offers more bells and whistles—and more customization options.
While Robinhood could be the place to get you accustomed to investing, there are other zero-fee brokers with more resources that are worth serious consideration. If you’re an active investor or trader, there are much better options on the market as Robinhood does not support robust charts, screeners, tools and so on. Investors should also consider the lack of transparency around payment for order flow and other issues when making a decision to use Robinhood as an online trading platform. In this match up, Fidelity has a far better overall offering than Robinhood.
And Nerdwallet, Fidelity vs. Robinhood: 2022 Comparison [nerdwallet.com]: (bullet point comparison)
Although Robinhood is typically thought of as a beginner-friendly investing app, Fidelity actually earned the title of Best Broker for Beginning Investors and the Best App for Investing in NerdWallet's 2022 Best-Of Awards. Robinhood may have an easier, quicker sign-up process, and its user experience is definitely built for a mobile-first generation, but Fidelity has several offerings you won't find at Robinhood: expense-ratio-free index funds, strong customer service, a large selection of research providers and — importantly — IRA accounts to help you save for retirement in a tax-advantaged way.
Re:Why does Robinhood exist? (Score:5, Insightful)
Which doesn't mean it's a good product.
Re:Why does Robinhood exist? (Score:4, Insightful)
In addition to the much more legit brokerages with minimal fees, there's also RH's shenanigans with GME. I've no idea if throwing individual investors under the bus to prop up the profits of short-selling hedge funds was technically legal or not. But it was sure as shit unethical as hell, and screwed over a lot of people. When RH denied one of my own GME purchases... not an option, but a cash purchase... that was it for me. E-Trade never did me dirty like that and, indeed, let me go on buying all the GME I wanted. I got all the way out of RH as soon as the Gamestop fun was over, never looked back, and will never trust them again. They're definitely a company that deserves to die in my book.
And frankly. I'm not sure I can conjure up sympathy for people who saw Robinhood pull that stunt and thought it'd be a fine company to go on trusting with their money.
Re: Why does Robinhood exist? (Score:2)
I have most of my money in vanguard (long term savings/retirement), but also have Robinhood.
Their zero fees came years after Robinhood.
And now Robinhood has fractional shares (which I think vanguard only does for dividend reinvestment).
I use Robinhood for a savings account effectively because it is significantly quicker and easier to put money into/out of and make purchases and sales on.
It's a quick and easy way to easily buy and sell shares.
Yes, I know that it's not as secure as a savings account, but I ha
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Yeah I just meant that a 10% drop of any money I put in would be considered expected, and a 20% drop not too surprising.
At this point though, I have a pretty big buffer vs a savings account so I'm pretty covered (it's been a few years so the older money in there has really grown).
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RH is what all the Reddit stonkers use. That's the secret of their success - meme stocks. Some people made a packet out of Gamestop and AMC, and people who can't be bothered to do any research and just want to be told what to do to get rich quick use the same service.
Re: Why does Robinhood exist? (Score:2)
Robinhood's low minimum/low fee structure is more popular because they more aggressively market their offering while companies like Fidelity/Vanguard understand that such offerings are money losers in many/most cases, but offer it to capture business that might otherwise go to their competitors.
scam (Score:1)
Anyone else wanna bet that this app is nothing more than a scam to take the money and run off with it?
Somehow I don't think the devs behind it had any intention of doing anything but luring deposits in and then absconding.
Honestly this reminds me of that other time when a black market company providing services for criminal acts skived off with millions of bitcoins
Re: scam (Score:2)
What a non-sensical comment. They failed to provide sufficient hand-holding for new first-time investors/customers, so this is obviously a scam.
Grow up, that they failed to ramp up an adequate support organization isn't how you can spot a scam...
I Found RobinHood Phone Support to be Competent (Score:2)
I panicked a few weeks ago, when a SPY option contract that I had sold was called in. Suddenly, the software says I'm on the hook for ~$27,000, which -- that's a lot of money for me. I had the other leg of the option contract in there, but when I tried to exercise it myself, it suddenly said that I was on the hook for ~$54,000. I tried to fix that myself, and managed to get it to being on the hook for $~81,000.
I called the support line, and it took about 30 minutes of waiting to get to a human being. Bu
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Yeah, I've never had a problem with them (though admittedly I am not of the Gamestonk meme buyers). TFA says they have 17,000,000 odd customers, and had 3,081 complaints. That should say only 3,081 complaints, IMO.
I'm not saying the complaints aren't important, especially at the individual level, but TFA is trying to make it sound like this is a substantial problem when the numbers just don't show that, at least from these complaints.
BBB rating is also F (Score:2)
https://www.bbb.org/search?fin... [bbb.org]
So what? (Score:2)
Thousands of first-time investors, choosing to invest thru a new start-up internet investment company, complained about not being able to reach a human in customer support when they had questions or their inability to trade "instantly" as their investment was dropping in value.
In reverse order, it's a customer's responsibility to place a stop-loss order, and it is a bad idea to try and day-trade with an organization that isn't set up for instant trades.
The reason internet brokers and agents offer lower pric