Robinhood will owe users a phone call in latest customer service change

Robinhood will owe users a phone call in latest customer service change

The inventory buying and selling app Robinhood introduced Tuesday it will enable users to request a call again from a registered monetary consultant at any time. The assist change comes in the wake of a CBS Information investigation in February detailing customer service practices that left users to navigate high-risk trades by themselves. 

That concern was highlighted by the dying of 20-year-old Alex Kearns final 12 months. The school pupil took his personal life after mistakenly believing he owed practically $750,000 buying and selling a refined monetary instrument known as choices on Robinhood. 

In a lawsuit reported first by CBS Information, his household accused Robinhood of wrongful dying, negligent infliction of emotional misery and unfair enterprise practices. In an unique interview, his household stated they consider Kearns would nonetheless be alive if Robinhood had stay 24-hour customer service. 

Robinhood went public on the Nasdaq in July, with an estimated 22.5 million funded accounts, based on paperwork filed with the Securities and Change Fee. 

Users will be matched with “trained agents” who “provide specialized support based on your issue – even if you aren’t sure exactly what’s wrong or what questions to ask to solve your problem,” the corporate stated in a press launch saying the brand new function.  Robinhood had beforehand launched a call again choice, but it surely was restricted to sure hours and particular forms of points, a firm spokesperson stated.  

The Federal Commerce Fee acquired greater than 650 complaints from clients about Robinhood Monetary LLC and its subsidiaries in 2020, greater than twice as many as its opponents Etrade, Schwab, Constancy and TD Ameritrade, based on paperwork obtained by CBS Information. A standard theme among the many complaints filed towards Robinhood: getting “no response” from the corporate.

Within the hours earlier than his dying, the lawsuit stated, Kearns’ Robinhood account displayed a detrimental steadiness of greater than $700,000. Kearns emailed Robinhood’s customer service tackle thrice to ask for assist understanding what had occurred, and whether or not he might nonetheless offset the losses with one other commerce. In response, he acquired an automatic reply.

His household says he turned more and more panicked about his perceived debt, and took his personal life hours later. Greater than a full day after he despatched three emails to the corporate, Robinhood despatched one other automated message suggesting he did not owe any cash in any respect.

In Might, the corporate reached a settlement with the household for an undisclosed quantity.

The Kearns household declined to remark in regards to the expanded customer assist. 

On Tuesday, the corporate stated it had doubled its customer assist workers this 12 months and can also be engaged on a phone assist resolution for patrons who’re shut out of their accounts. 

“At a high level, this is terrific, but it’s years too late.” stated Consultant Sean Casten, an Illinois Democrat who sits on the Home Monetary Companies Committee and highlighted the corporate’s lack of stay customer assist at a February listening to with Robinhood CEO Vlad Tenev

“Alex Kearns is not here today because you didn’t even bother to put in the kind of basic protections that you would assume at any online brokerage,” Casten stated Monday. “To do this not only years later, but after your IPO? Where the hell are your priorities?”

In July, FINRA fined the corporate $70 million for deceptive its clients, inflicting them to lose hundreds of thousands of {dollars}. The SEC has said its probing whether the game-like options in on-line buying and selling apps like Robinhood encourage riskier trades. SEC Chairman Gary Gensler has additionally taken purpose at Robinhood’s enterprise mannequin, telling Barron’s magazine that a ban on a controversial observe that accounts for nearly 80 p.c of Robinhood’s income is “on the table.” 

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