SALT LAKE CITY — After finding nearly $10,000 gone from her savings account. One Utah woman found the culprit: a new Financial Technology firm that claimed more convenient early paydays than traditional banks.
Thousands of dollars were gone in just a matter of minutes, and a savings account was depleted. It’s a nightmare for anyone, but a reality for a mom who hoped to take her kids on vacation.
The commercials promise fee-free overdrafts, early paydays and easy credit building through Chime, one of many companies referred to as fin-tech or financial technology.
A quick glance at their website will tell you they are not a bank.
For Maxine Pizarro, a local mom of four, the convenience prompted her to open an account.
Until it wasn’t so convenient.
“I got a notification saying that a charge, I think it was like $1,500, was charged to Moon Pay, so that’s what first caught my eye. What is that? And then I looked and I saw other notifications,” says Pizarro. “I went to log into my Chime account and I couldn’t log in, so I was like okay, maybe it’s a password, I swear I forget passwords all the time. I tried to reset my password and it didn’t recognize my email.”
She called Chime, they helped her reset her password and email address.
“Once I got in, I was able to clearly see all the fraudulent charges. They moved everything in my savings to my checking account and then proceeded to make the charges,” says Pizarro. “The charges added up to $9,900. The reason why they didn’t take more is because I found out at a later time that my daily limit was $10,000 and that’s why. I’m sure if it was higher, they would’ve wiped me clean for sure.”
“That was our Disney trip money,” said Pizarro.
Frustrated, Pizarro called Chime’s customer service line twice to file charging disputes.
Both times, those disputes were denied.
They held her responsible for the nearly $10,000 dollars taken from her account.
“It was the same thing, they would say, ‘Don’t worry, we understand. This is a lot of money. We’ve escalated your dispute.’ They could never tell me what that meant, escalated. They just kept saying it over and over again,” says Pizarro.
While Chime and other fin-tech services like it are not banks, their banking services and debit card are provided by established banks: The Bancorp Bank and Stride Bank.
We reached out to Bancorp and Stride to see how Pizarro could recover her money.
We did not hear back from either, but a few days after we met Pizarro who then updated her dispute with a police report, the nearly $10,000 was back in her account.
“Our fin-tech products are still largely unregulated at the state and the federal level and so there’s not a ton of oversight,” says Rachel Gittleman with the Consumer Federation of America.
Gittleman says even if it feels like you’re using a bank when you sign on with any fin-tech service, be wary.
The Consumer Financial Protection Bureau has tracked more than 3,000 complaints in the last three years from customers experiencing much of the same issues with Chime – accounts being closed leaving customers without access to their funds or accounts hacked by unrecognizable merchants with no guarantee of returned money.
Gittleman notes some conveniences that come with companies like Chime are amenities you get with a regular bank or credit union, so weigh banking options carefully.
“A lot of banks have mobile apps and you can access it from anywhere, so I think what used to be different about fin-tech is starting to become more commonplace across our financial services.”
Fox 13 also reached out to Chime for comment on Pizarro’s situation.
They sent us a statement, it says in part:
“Unfortunately, fraud occurrences like this are widespread in the industry. To ensure the safety of our members and our platform we employ rigorous fraud detection protocols, taking action when necessary to prevent fraudulent activity. We encourage customers to report suspicious activity immediately and practice safe online banking habits including monitoring accounts closely and never giving out personal information. Members can reach out to live support 24/7, 365 with any questions.”
As for Pizarro, she’s happy to have her money back, but she says it’s a lesson learned.
“Don’t use any bank that they don’t have an actual place you can go use it. I’ve learned that," said Pizarro. "I feel like everyone I’ve talked to on Chime is overseas, there’s no location to go to. After being hacked too, you don’t know who to trust.”
The Consumer Federation of America says if this happens to you, there are some next steps you can take.
After you talk to your company, contact the local Consumer Protection Agency.
In Utah, this is a division under the Department of Commerce, it’s located in Salt Lake City.
Also, file a complaint with the Consumer Financial Protection Bureau.
It’s easy to do on their website and this helps them create the best practices for consumers.
And contact the police or a lawyer.
Pizarro did just that and having a police report might have helped her dispute.