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My Highest-Earning NewsBreak Story in May was About Financial Fraud
Consumer news gets some love
Sure, there are individual fraudsters out there who attempt to acquire your cash through nefarious means.
Then, though, there are legitimate corporations organized for profit offering needed or desired services.
Some of them are also fraudsters. They employ tricks and gimmicks to get your money — and even break the law sometimes in order to get or keep money that’s not rightfully theirs.
That’s the case with a bit of consumer news I shared over at NewsBreak.
This piece was my highest-earning NewsBreak piece in May.
Chime is a big nonbank company that essentially provides banking services to millions of customers. You can get paid in your Chime account and use the app or a Chime card to make payments.
Based on the comments in response to this story, lots of people find Chime’s services beneficial (and preferable to traditional banking).
However, this particular fine — $4.5 million — was due to Chime’s practices when people chose to close accounts.
Yes, some people explored Chime’s services and decided to end their relationship.
Seems easy enough. You don’t want to use Chime, you close your account, you get any money in your Chime account back.
Chime even told customers up front it could take up to 14 days to complete the process, but if they wanted to leave, they’d get their money.
Until they didn’t.
In some cases, it took as long as 90 days for customers to get their money back.
As the complaint against Chime noted, this delay in receiving funds had significant negative impacts on customers. They missed payments on other bills or didn’t have cash available for emergencies, even though the funds in the Chime account would have covered those expenses.
Chime paid the settlement to resolve the complaint, but it’s not clear what it was doing with the money or why a company that sells itself on providing better, more convenient service than a bank was so bad at service when a customer relationship ended.
The lesson of Chime in this case is to be wary of “disruptors” promising to act differently than other, typical actors in the consumer finance space. Both banks and nonbank banks earn money by holding on to your money.
