Chime is a banking app that’s racked up glowing praise for its forgiving overdraft policies and easy payment options. But behind the scenes, it was also racking up hundreds of complaints from customers claiming that the company locked them out of their banking accounts, sometimes for months on end.
The issue was first reported by ProPublica in an investigation that delved into the 920 complaints that Chime’s customers filed with the Consumer Financial Protection Bureau (or CFPB, for short) since mid-April, 2020. For the most part, these complaints concern what banks call “forced account closures”—the term given when banks suddenly close a person’s account and lock up their money in the process. Just for comparison’s sake, ProPublica points out that Wells Fargo, a bank wrought with its own bad reputation, has earned only 317 complaints during this same period, per records kept in the CFPB’s complaint database.
The report points out that most of these CFPB reports have been closed “with explanation,” a designation the Bureau sets aside in cases where Chime resolves the dispute privately with the customer in question. According to the company, the majority of complaints it’s garnered are due to its attempts to crack down on bad actors trying to fraud their way into 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 statement: “The past year has seen an extraordinary surge in activity by those seeking to illicitly obtain pandemic-related government funds and defraud US taxpayers. By some credible estimates, $400 billion worth of unemployment fraud alone may have transpired.” (The $400 billion estimate Madway referred to linked out to a poorly sourced Axios article that had been debunked previously).
“We are proud of Chime’s robust anti-fraud efforts, which have returned hundreds of millions of dollars to state and federal agencies during the pandemic,” Madway continued. “While it’s important for us to fight fraud, our top focus will always be to take care of our members. And despite our best efforts, we do 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’s Better Business Bureau page layout similar stories.
“I have a bank account it was suspended due to deposits on February 17, 2021. I sent in all documentation I was asked for but 4 months later I still do not have a response or a clear way of working and speaking with them,” reads one post. Another describes how a customer had $6,000 frozen their account, but when Chime sent over the check that they’d promised, it was only for $130.
“Chime stole my tax refund and I will not let this go until it is returned,” they wrote. “Nothing in your agreement tells me what I’m missing and emailing chime gets me an automated response that says your account is closed. This is a joke.”
What’s worse is that these customers will probably never figure out why their accounts were closed, to begin with. In their emails to customers, the company said that it can’t disclose that information due to “security reasons,” and then directed users to the agreement that Chime’s customers sign when they open an account with the company.
“Chime and/or Bank may suspend, freeze, or close your Account for any reason with or without notice,” it reads. “If our monitoring of the Spending Account detects any [nefarious] activity, the Account funds will be subject to a hold pending review of the activity by the Bank and/or Chime.” And sometimes, that “review” process takes months of trying to claw back your money from the institution that’s supposed to pay up.