They had thousands of dollars just one click away. But 40 or 50 clicks later, they had nothing. A few NBC Bay Area viewers recently complained about Robinhood, the app that’s made stock investing easy.
Jacob Burns has been investing with Robinhood a while. “I used Robinhood as far back as, I want to say, 2016 or 2017,” he said. But recently, when Robinhood made news for restricting some users’ trades during the saga involving GameStop shares, Burns decided to withdraw.
“Ever since the GameStop thing happened, I’ve been feeling a little uneasy about Robinhood,” he said. “I wanted to liquidate my assets and pull out of Robinhood and transfer to a different bank.”
But when he clicked the withdraw button, his money went nowhere -- for weeks.
“I’ve tried probably 40 or 50 times. And it just says 'rejected, rejected,’” he explained.
So, Burns contacted NBC Bay Area Responds. It turns out, he’s not alone.
“I couldn’t get my money out of Robinhood and into my bank account,” said Sandeep Vuppu in San Jose. “My total portfolio, including shares and cash, was about $30 thousand dollars. And that was essentially stuck in Robinhood.” Vuppu's transaction history showed weeks of failed transfers, too.
Others Complaining, Too
We searched the Consumer Financial Protection Bureau’s complaint database and found at least 11 other people complaining about a similar problem -- most of them very recent. Complaints are also easily found on various social media platforms.
So, we contacted Robinhood, which is headquartered in Menlo Park. A rep responded almost immediately. Within just a few hours, Burns said his account was fixed and he was able to withdraw his $3,000.
“That’s awesome,” he said. “Thanks for looking into and helping out, man. I really appreciate it.”
We had the same success with Vuppu’s account. He had more than $33,000 unlocked within an hour of our inquiry.
“This was really my last resort,” Vuppu said. “I didn’t know what to do. I’m so glad it got resolved with your help.”
Robinhood Responds; Takes Action
We asked Robinhood what, exactly, happened. A rep only said, “we generally do not share details of customers' accounts.”
Now that Burns and Vuppu are in the market for a new broker, we turned to NerdWallet’s Chris Davis to walk us through shopping for a stock broker -- especially for first time investors.
How to Pick a Broker
“First and foremost, one of the most important things is going to be to make sure you know what your investment goals are,” Davis said. Is your account for retirement? Long term? Or, are you looking for short term gains? “Once you know that, then you can start looking at all the brokerage options out there,” Davis said.
New investing apps like Robinhood make stocks simple. Davis said the big, longstanding brokers are getting into that game, too.
“They’re offering different kinds of products that are tailored to beginners now, that could be a great place to start,” he said.
You have many choices. Some companies offer something known as ‘robo advisors,’ where you essentially let a computer algorithm invest your money. On the opposite end of the spectrum, you can go ‘old school’ with a local, in-person financial advisor.
“That’s out there. you’re typically going to pay more for that,” Davis explained. He said apps and ‘robo advisers’ are likely your cheapest way to start investing; a traditional meet-in-an-office advisor is likely the most expensive. Whatever -- or whoever -- you choose, Davis recommends asking what they’re going to charge you.
“Namely commissions and account fees,” he said.
How to Complain
If you ever want to complain about a financial outfit, we can recommend three possible routes.
At the national level, you can complain to FINRA, the Financial Industry Regulatory Authority, and the CFPB, the Consumer Financial Protection Bureau. Here in California, the DFPI, the Department of Financial Protection and Innovation, also takes investor complaints.