How to tell whether a fintech app such as Chime is a scam

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PUBLIC DEFENDER By Brian Livingston We’ve recently seen an explosion of activity in the field of fintech — financial technology — which is causing rip
[See the full post at: How to tell whether a fintech app such as Chime is a scam]

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You don’t have to go online to find “Second Chance Banks” with lousy customer service, “Personal Bankers” who are nothing but sales people, and who try to fast-talk customers into investing in banking products or opening account types which are totally inappropriate for their financial situation and future financial goals. The entire 2008 mortgage loan market implosion was fueled in part by such “Second Chance Banks”.

I once made the mistake of depositing my social security disability funds in one of these offline “Second Chance Banks” and was directed into an account type which repeatedly cost me fees and penalties. When I tried to close the account, the bank placed “interest” payments of one cent into the account for months to try to keep it open and collect more fees, even though I had notified them in writing that I wanted to close all my accounts with them. For legal reasons I won’t name this bank, but it is still out there, and has not changed its practices last I heard from friends who still are stuck in that bank.

The article cites Wells Fargo statistics about complaints from the past year. This is not a valid comparison with Chime, as Wells Fargo’s infamous bad behavior happened several years ago. In the years when WF was at its worst, it generated many times the number of complaints it now generates. The change at WF is largely due to successful prosecutions and resignations and reorganizations within the bank.

The bottom line is this: Whenever I see or hear the term “Second Chance Bank” I run the opposite way, screaming at the top of my lungs. Metaphorically at least. I would suggest that no one is ever in such financial dire straits that they need or should want the “services” or “convenience” of “non-bank bank” apps or services.

I shake my head whenever I read about how financially unwary and illiterate some Americans are these days! I applaud Brian Livingston for trying to make headway with us about financial awareness and education.

-- rc primak

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Brick and mortar banks with actual branches are no guarantee of competence and/or good behavior.  Some years ago a substantial deposit into an account at a nationally known financial institution went missing.  I had the paperwork to prove the deposit was made but the local branch management was giving me the runaround.  Only diligent pursuit of the matter and my escalation to a regional executive who was advised that I was in contact with the FBI and the US Attorney to pursue criminal charges got the matter resolved.

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Darnit, people.  I keep saying, FIND A CREDIT UNION.  Use that.  The members own it.  They work for you, not for Wall Street investors.

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(Full disclosure: My own fintech website, Muscular Portfolios, provides computerized investing advice free of charge, personally responds to emailed support requests during business hours, and provides a 24/7 telephone voicemail service, which generates a live-person callback the same business day. The website never seeks or accepts anyone’s funds for investment.)

In the spirit of this article, I followed the link above in the hopes of learning more but was disappointed to see zero details, only a request to “Enter your email address to see the latest no-cost investing developments that I’m excited about.”

You’ll have to work harder than this to get me to sign-up for a newsletter!

2 users thanked author for this post.

Alice, wavy

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