“I had my paycheck direct deposited into Robinhoods new cash management account. Just like a regular bank get paid use debit card, well I got paid last Friday June 12, 2020 and have not been able to use my debit card withdrawal funds or transfer any money to my other banks. I have missed my car payment, dentist appointment, I owed $252.00 and got declined. Totally embarrassing to say the least, plus my other bills are due,” the person wrote in a complaint obtained by Gizmodo.
The inability to withdraw money from Robinhood accounts for extended periods of time was a common complaint from consumers. There were also people who said they were hacked and then became frustrated that Robinhood was unresponsive when they tried to resolve the issue. Some users who say they were hacked even claimed they lost thousands of dollars when they couldn’t reach Robinhood about the issue.
Robinhood, an online stock trading company worth $9.7 billion as of press time, boasts over 17 million people who trade stocks and cryptocurrency on its app. It’s an incredibly popular retail trading platform in the U.S., and many of its users are novice traders. Some users struggled with what they said problems with Robinhood’s product in the early months of the coronavirus pandemic, already a financially tenuous period. We obtained complaints filed with the Federal Trade Commission about Robinhood during that time.
Gizmodo submitted a Freedom of Information Act (FOIA) request with the Federal Trade Commission for consumer complaints filed about Robinhood that cover the period from mid-2020 until mid-2021, just before the company went public in July of that year. The FTC found 3,081 complaints, but only released 200 of those to Gizmodo under its obligations to comply with FOIA law. Private information, including the identities of the people making complaints, was redacted by the FTC, which means Gizmodo was unable to contact the consumers. But we’re publishing a small sample of the complaints in an effort to highlight patterns that point to larger problems, just as we have with other companies like Binance, Tinder, Venmo, Rent-A-Center, AirBNB, and Honest Company, to name a few.
One of the most common complaints about Robinhood was an inability to reach someone with the company’s customer service team. Robinhood only introduced phone support in October of 2021, so it was common for people with complaints to be unable to reach anyone, according to the FTC documents we obtained. Robinhood is aware of the issue, the company told Gizmodo, and has worked to ameliorate it with a 24/7 hotline.
The company’s statement reads, “We are committed to being there for customers when they need us, which is why last year we introduced 24/7 phone support through the Robinhood app. Since 2020, when some of these complaints were filed, we’ve invested heavily in phone support, systems stability, and security processes. We’re committed to supporting our customers and offering a safe experience, and we’re confident that the steps we’ve taken over the past two years put us in a strong position to serve our growing customer base.”
Another recurring complaint involves people being unable to sell a given stock while its value tanked on the market. This issue, as you can imagine, is troubling because it prevents people from minimizing their losses.
In one complaint, the last on this list, someone who said they’re serving in the U.S. military at Guantanamo Bay, Cuba had their account locked over “suspicious” transactions from Cuba. The service member complained that it was “obviously” them, but you can understand how Robinhood would find stock trades coming from Cuba to be suspicious. Venmo had a similar problem with transactions that mentioned Cuba.
Again, we couldn’t independently verify the claims made by consumers to the FTC, but when taken in the aggregate, we believe they help provide a snapshot of common issues with Robinhood before it went public. Some of the complaints below have been lightly edited for spelling and readability.
“I understand the market can be volatile, but this was Robinhood refusing to honor trades of people who purchased the stock legitimately.”
On May 26th I purchased a stock (invvy) when I noticed it climbing the charts. Within 30 minutes of purchase, during trading hours, invvy peaked at $40 a share and at that time Robinhood decided they no longer wanted to support that stock. By making that decision, they blocked traders who purchased in good faith from selling their shares of the stock. During this blackout period, invvy stock started dropping dramatically while users were left holding stock they couldn’t sell. When Robinhood finally allowed the sale of the stock, it had fallen from $40 a share down to $16.00, and I was forced to sell at a loss. Even during the blackout period I tried to do a stop loss sale for $36.00 a share, and Robinhood rejected my sale. As an investor the difference between my rejected sale and when i was finally allowed to sell was $900 (+600 to -300). I contacted customer service twice and have received nothing in 2 weeks, not even a “we are looking into this”. I understand the market can be volatile, but this was Robinhood refusing to honor trades of people who purchased the stock legitimately. I don’t think a company in the middle of day trading can just decide they don’t want to honor stock trades that they were honoring an hour ago, to prevent investors from making money. Since Robinhood has given no response to customer service emails, or tweets, or anything regarding this issue, I have to assume that Robinhood could do this in the future to any other stock they don’t want to pay out.
“They are robbing me”
They took my deposit and restricted my accunt in every way. I cant buy, I sell, I can’t transfer the money out either. they basically told me that i owe them the money which is complete non sense. I never borrowed anything. They are robbing me.