Widespread inventory buying and selling platform Robinhood faces dozens of buyer lawsuits and complaints over prolonged delays resolving account points, leaving some customers unable to entry their cash for months, based on a brand new report.
Determined Robinhood prospects have taken to social media to share their anger on the firm, which not too long ago filed plans to go public and is reportedly in search of a $30 billion valuation.
Alex Mesa, the corporate’s head of buyer expertise, admitted that the corporate has struggled to maintain tempo with its surging consumer base, however mentioned that Robinhood is investing considerably in customer support.
‘In the event you, in a single day, have a rise of 350 p.c of quantity, there’s simply not sufficient people to throw on the situation to have the ability to ship efficient help,’ he instructed the Wall Street Journal.
The corporate’s CEO has additionally claimed the platform is increasing customer support ‘as quick as we are able to.’
Robinhood manages an estimated $20 billion of buyer property, and particular person accounts are insured as much as $2 million money and $10 million in inventory, which means that prospects usually are not prone to dropping their deposits if the corporate struggles or fails.
Robinhood CEO Vlad Tenev mentioned the corporate is increasing telephone help ‘as quick as we are able to’ however most customers nonetheless can not get account assist over the telephone, resulting in frustration
On-line, many disgruntled Robinhood buyer have shared their horror tales, accusing the corporate of ‘ghosting’ them on complaints and describing a prolonged ordeal to entry their funds.
Brenton Place, a resident of Michigan, mentioned it took 5 weeks and greater than a dozen emails to get his Robinhood account unlocked after confusion over financial institution transfers that went awry.
Place instructed the Journal that he watched helplessly as the worth of his portfolio plunged. Although he may have bought his shares, the funds would have remained caught in his account.
The psychological well being therapist started tweeting criticism of the corporate beneath the hashtag #RobinhoodHostage on March 5, and his account was unfrozen on March 12.
A Robinhood spokeswoman referred a DailyMail.com inquiry to a February weblog submit, which learn partially: ‘We’re investing closely in buyer help and stay dedicated to bettering to serve you.’
Robinhood was one of many free on-line buying and selling apps that fueled the meteoric rise of GameStop shares in January, in the course of the ‘meme inventory’ rally.
The corporate drew livid backlash after it briefly halted the flexibility to purchase GameStop and different shares on the peak of the frenzy, saying it was unable to satisfy deposit necessities on the foremost clearinghouse.
Regardless of the backlash, Robinhood has continued to take pleasure in reputation, gaining a further 4.5 million downloads by way of Sunday, based on Apptopia.
The corporate has confronted robust questions over its customer support practices for the reason that suicide final yr of 20-year-old Alex Kearns, a university pupil who believed he had suffered ruinous losses on choices trades.
Robinhood lengthy supplied customer support solely through e mail, and Kearns’ household mentioned in a go well with that he had despatched three determined emails to the corporate however acquired solely an automatic reply.
In February, members of Congress excoriated Robinhood over its lack of telephone help for purchasers, and CEO Vlad Tenev mentioned the corporate is in search of to develop telephone help ‘as quick as we are able to.’
Robinhood drew livid backlash after it briefly halted the flexibility to purchase GameStop and different shares on the peak of the ‘meme inventory’ frenzy (inventory picture)
Some choices buying and selling prospects can now search buyer help by telephone, and final month Robinhood mentioned it’s spending $11.7 million and hiring practically 400 individuals for a brand new customer-support middle in North Carolina.
Robinhood buyer Amy Vickers additionally shared her frustration with the corporate, telling the Journal that she tried to switch her shares to Constancy Investments when Robinhood halted purchases of GameStop shares in February.
When she realized that the switch would lock up her positions for a time, she tried to reverse the switch, however was unable to cancel it after contacting Robinhood through e mail and the corporate web site.
Furthering her frustration, Robinhood instructed her that it will take per week to finish the switch, however her final inventory arrived at Constancy 18 days later, by which era her GameStop shares has plunged in worth.
‘I had numerous days laying in mattress feeling depressed,’ Vickers instructed the Journal. ‘Robinhood is probably the most unprofessional firm I’ve ever handled managing my cash.’
‘Over the previous yr, we have accelerated our investments in buyer help,’ Robinhood mentioned within the February weblog submit. ‘We consider nice customer support incorporates a mix of actual individuals and one of the best know-how, and we proceed to spend money on each.’
Based in 2013, Robinhood has been credited with serving to usher commission-free buying and selling all through the retail brokerage business.
Many younger prospects shortly took to its app, which now counts greater than 13 million customers.
The corporate is getting ready for an preliminary public providing later this yr, and reportedly plans to unload a bit of its shares on to its customers, making the customer support points a urgent concern.
Robinhood: The buying and selling app for amateurs began by two millennial greatest pals
Baiju Bhatt and Vladimir Tenev based Robinhood in 2013, saying they have been impressed by the Occupy Wall Road protests.
Robinhood is a free inventory buying and selling app that permits customers to simply load money and purchase and promote shares and choices.
The favored app boasts 13 million customers, and reportedly about half of them personal shares of GameStop.
On January 28, Robinhood restricted the acquisition of shares in GameStop and a number of other different shares in style on the Reddit discussion board WallStreetBets.
Baiju Bhatt (left) and Vladimir Tenev (proper) based Robinhood in 2013, saying they have been impressed by the Occupy Wall Road protests
Merchants who personal the shares have been nonetheless in a position to maintain or promote them on Robinhood, however no customers have been allowed to buy new shares.
The transfer drew livid condemnation throughout the political spectrum, and accusations that Robinhood is coming to the help of hedge funds on the expense of small buyers.
Authorized consultants say brokerages have broad powers to dam or prohibit transactions.
Bhatt and Tenev met whereas they have been college students at Stanford College, and had beforehand collaborated to start out a high-frequency buying and selling agency and an organization promoting software program to skilled merchants.
Each have an estimated web value of about $1 billion, due to their stakes in Robinhood, which is valued at $11.7 billion.
Final month, the SEC dominated that Robinhood had misled its prospects about the way it was paid by Wall Road corporations for passing alongside buyer trades and that the start-up had made cash on the expense of its prospects.
Robinhood agreed to pay a $65 million fantastic to settle the costs, with out admitting or denying guilt.
Bhatt, 36, is the son of Indian immigrants, and earned a bachelor’s diploma in physics and grasp’s in arithmetic from Stanford.
Tenev, 34, was born in Bulgaria and moved to the US along with his household when he was 5. He earned a bachelor’s in arithmetic from Stanford and dropped out of a PhD program to crew up with Bhatt.