Popular stock trading platform Robinhood faces dozens of customer lawsuits and Live Draw SGP complaints over lengthy delays resolving account issues, leaving some users unable to access their money for months, according to a new report.
Desperate Robinhood customers have taken to social media to share their anger at the company, which recently filed plans to go public and is reportedly seeking a $30 billion valuation.
Alex Mesa, the company’s head of customer experience, admitted that the company has struggled to keep pace with its surging user base, but said that Robinhood is investing significantly in customer service.
‘If you, overnight, have an increase of 350 percent of volume, there’s just not enough humans to throw at the issue to be able to deliver effective support,’ he told the .
The company’s CEO has also claimed the platform is expanding customer service ‘as fast as we can.’
Robinhood manages an estimated $20 billion of customer assets, and individual accounts are insured up to $2 million cash and $10 million in stock, meaning that customers are not at risk of losing their deposits if the company struggles or fails.
Robinhood CEO Vlad Tenev said the company is expanding phone support ‘as fast as we can’ but most users still cannot get account help over the phone, leading to frustration
Online, many disgruntled Robinhood customer have shared their horror stories, accusing the company of ‘ghosting’ them on complaints and describing a lengthy ordeal to access their funds.
Brenton Place, a resident of Michigan, said it took five weeks and more than a dozen emails to get his Robinhood account unlocked after confusion over bank transfers that went awry.
Place told the Journal that he watched helplessly as the value of his portfolio plunged.
Though he could have sold his shares, the funds would have remained stuck in his account.
The mental health therapist began tweeting criticism of the company under 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 blog post, which read in part: ‘We’re investing heavily in customer support and remain committed to improving to serve you.’
Robinhood was one of the free online trading apps that fueled the meteoric rise of GameStop shares in January, during the ‘meme stock’ rally.
The company drew furious backlash after it temporarily halted the ability to buy GameStop and other shares at the height of the frenzy, saying it was unable to meet deposit requirements at the main clearinghouse.
Despite the backlash, Robinhood has continued to enjoy popularity, gaining an additional 4.5 million downloads through Sunday, according to Apptopia.
The company has faced tough questions over its customer service practices since the suicide last year of 20-year-old Alex Kearns, a college student who believed he had suffered ruinous losses on options trades.
Robinhood long offered customer service only via email, and Live Draw SGP Kearns’ family said in a suit that he had sent three desperate emails to the company but received only an automated reply.
In February, members of Congress excoriated Robinhood over its lack of phone support for customers, and CEO Vlad Tenev said the company is seeking to expand phone support ‘as fast as we can.’
Robinhood drew furious backlash after it temporarily halted the ability to buy GameStop and other shares at the height of the ‘meme stock’ frenzy (stock image)
Some options trading customers can now seek customer support by phone, and last month Robinhood said it is spending $11.7 million and hiring nearly 400 people for a new customer-support center in North Carolina.
Robinhood customer Amy Vickers also shared her frustration with the company, Live Draw SGP telling the Journal that she attempted to transfer her stocks to Fidelity Investments when Robinhood halted purchases of GameStop shares in February.
When she realized that the transfer would lock up her positions for a time, she attempted to reverse the transfer, but was unable to cancel it after contacting Robinhood via email and the company website.
Furthering her frustration, Robinhood told her that it would take a week to complete the transfer, but her last stock arrived at Fidelity 18 days later, by which time her GameStop shares has plunged in value.
‘I had a lot of days laying in bed feeling depressed,’ Vickers told the Journal.
‘Robinhood is the most unprofessional company I’ve ever dealt with managing my money.’
‘Over the past year, we’ve accelerated our investments in customer support,’ Robinhood said in the February blog post.
‘We believe great customer service incorporates a combination of real people and the best technology, and we continue to invest in both.’
Founded in 2013, Robinhood has been credited with helping usher commission-free trading throughout the retail brokerage industry.
Many young customers quickly took to its app, which now counts more than 13 million users.
The company is preparing for an initial public offering later this year, and reportedly plans to sell off a chunk of its shares directly to its users, making the customer service issues a pressing concern.